Friday, March 27, 2015

Better than Tom Cruz

According to Cruz, all politicians should have a report card to see what his/her campaign ideas/promises have been fulfilled.

Simple concept, but big impact.

Free loaders

We have to limit free loaders. The mentally retarded and the REAL disabled are not free loaders so are not those who lose jobs.

The addicts are, the lazy folks are, the three-generations of teenage mothers are, the young folks tuning the motor bikes all day long are, the 'falsely disabled' are...

When the illegals become legal, how many of them will quit their jobs and become free loaders? Even worse, they will bring millions of their families in to COLLECT welfare. I see the legacy of Obama would go down the drain and we'll become a one party political system (good or bad?). You hear it here first.

To give or not to give

Every one wants to receive but not to give. When we have more free loaders, the votes will go to the policy makers who agree to give (instead of taxing).

The first fix: No more "representation without taxation". You can only vote if you pay Federal taxes.

The second fix. Change the constitution requiring balancing the budget.

It is from one who has never taken any business course (except those required for my engineering degree). Common sense is not that common when the agenda is to 'satisfy' the voters even they're dead wrong.

Thursday, March 12, 2015

Guns

* I bought SWHC for the fundamentals and betting it has hit the bottom. It is my religion not to buy companies that produce weapons. Did not check it out. Will sell it. How many of their guns have been used to kill in last year? I do not want to count money with my hands dripping in blood.

* We should not be dragged into another war or conflict in the Middle East. We just care about our economy to provide a good stock market and jobs. We do not want the body bags sent back and pay for the expenses of the war that we cannot afford. If we send the children of our leaders to the front line, we will have NO war.

Apple iWatch

My $90 watch does not have to change or charge battery (solar power). It is a BIG issue if it is used as a watch. However if it is used to climb up the social ladder or to boost your dumb ego, ensure  wear it on your head to show that you're a dumb iIdiot.

When the good news are bad news

The good news on the economy and the employment are bad news for the market. These good news would prompt the Fed to jack up interest rate that would be bad for the market as we have record-high margin rate and it would cost more for the corporations to borrow.

I do not think the rate will be raised in a pre election year. Next year, watch out.

Unemployment report

Unemployment rate has its faults. Many giving up seeking are not counted (i.e. the participation rate). The new measurement is the improvement of median income that has not recovered from 2007. Many recent college graduates are not working on the jobs of their choices and their college loans will not be paid back soon.

Globalization throws oil to the fire as corporations can hire the best employees at the least costs any where in this planet

Hillary wants to rule the world

In Chinese philosophy, you have to be a good man before a good family, then ruling a kingdom (many kingdoms within a country for many periods) and then everything under the sky (it was one country for the entire world in ancient China).

She cannot rule her husband. The other female Sarah is even worse than a pig wearing mistake (at least the pig does not hurt others). Babes, you have come a long way but not ready for the top job. 

Here is a joke on how Clinton saved the airline. PG14.

http://bit.ly/KWmI1N

India vs China

A good article.

I added my comment:

If you think China is corrupt, India is many times more corrupt.

For the last 25 years, China has leaped forward while India stays about the same for many reasons:

1. Population too high (China is high but it is better controlled). The limited resources have been literally eaten up.

2. India suffers from the lack of infra structure (need electricity and road to start), protectionism (so they do not improve quality)... Except for a very few with their dumb nationalism, very few educated Indians from the US want to return to India; I do not blame them for waiting roads, houses... to be built. It may never be built enough in our generation.

3. Even for a democratic country, India has been with the loser Russia too long. Hopefully for India,  the US will play the India card to control China as they used to play the China card against the Russia.

India cannot even copy China's model by limiting a small coastal area for economic development. As a result, India lacks China in many ways. In term of airport, subway, high rises..., India's Tier I city cannot even compete with China's Tier III city.

However, Indians are happier than Chinese with less pressure in daily lives if you have a happy meter to measure it. When they start to rise, it would be China's situation 25 years ago. I like to see India to succeed to minimize the miseries over there.

Most folks think India is better than China as they have never been to these two countries.

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The literacy rate is a joke for comparison.

Chinese means about 8 years (forget the exact no.) and Indian means you can write your name in any Indian language. Come on!!!

How can you be fat when most do not have anything to eat. Some live on less than $1 a day.

Of course, there is less pollution if you do not have industry. However, India's water supply has more problems than China's which is not good.

A country too dedicated to religion is good mentally but not good financially.

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Comparing too countries with similar populations seem to be relevant, but actually not. It is better to compare China with China 30, 20, 10 or 5 years ago. Same for India.

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Road to wealth: "Build more roads and have fewer babies."

My SA article on China.

Quantitive Easing

Quantity Easing is supposed to stimulate the economy, creating jobs and increasing inflation. As of 2015, it has not for most countries including the US. The money has not been passed to the small businesses that generate most jobs. We should have let SBA to set priority to small businesses and new businesses.

The large businesses use most of the cheap money to generate products / services (but not on development) to increase supply and hence deflation is the norm. 

The big banks lend money to investors and that explains why the stock market is booming and we have record-high margin debt. It widens the wealth gap.

Stock buybacks do not generate value. Corporations use low interest to buy back stocks and usually increase the stock values and hence their stock options.

Earning per share = Earning / Outstanding Shares.

When Earning is fixed but Outstanding Shares are reduced, the ratio looks deceptively good. That's why my Pow P/E is better as it considers Cash /Share and Debt/Share.

Pow P/E = Earning / (Price - Cash + Debt)   all expressed per share.


From my book The Art of Investing.

Software bug

Although you cannot possibly reduce to zero bug except for simple programs, good practice would make it better. The problem is any change could lead to another unexpected bugs.

The following was the concept on zero bug scheme from my article Super Programmer in the defunct PowerBuilder magazine.

Basically you go through the program with all possibly outcomes and check the codes on paper. If you find more than one bug, fix it and repeat the same procedure again until you do not find any bug. Followed by actual tests trying all the possible outcomes, alpha test and beta test. Quite simple concept, right?

However, most corporations do not do so. They are short-sighted to put an untested products in the market to gain market share, money at the expense of the company's reputation and long-term profit (it costs far more to fix a bug in the field).

Microsoft's Windows is a good example. They must be required to meet a specific deadline. If you cannot, you would get fired and hence the software has not been thoroughly tested. If there is a design fault (such as the same version of Windows for laptops and tablets), they have to 'swallow' it other many folks would be fired or get someone high up in big trouble. No one wants their stock option and/or bonus reduced.

If they give me half a day, I can tell them most problems of the current Window. How hard and how expensive to do so? Where have all the programmers and QAers in last decade gone?

Monday, March 2, 2015

Random rants again

* Every country cuts the interest rate to boost export. It is not good for the economy and the living standard of the country in the long run.

* Blackberry will be acquired by Samsung or a Chinese phone maker. It has valuable patents and customer base (so far). With Radio Shack and even Sears [Update: this blog was copied from my blog at Seeking Alpha and at that time Radio Shack has not been announced bankrupted]., they're bad cat bounces - buy them at the bottoms and sell them when they bounce. A technique I would have made a lot of money in the last 10 years but I'm a scary cat myself.

What is Blackberry and AMD have in common? Both are bankrupting and are trying to be rescued by Asia American CEO and probably by a company from Asia. The Chinese American CEO changed job from AMD to Blackberry.

* The fall of casinos stocks and the rise of FXI teaches up one thing: Fundamentals work. FXI from my SA article on China was 9 and now it is around 10 (still low).

* Recycle an old job. The new company' name when the two dollar stores merge is "Two Dollars Now

Stupid logic

Boston protesters learned from takeovers and this time on a highway. They must be one or all of the following: 1. welfare recipients (have nothing better to do), 2. students (either with loans or supported by their rich parents) or 3. mentally damaged (too many legalized drugs or drinks).

The arguments are quite stupid. They say the white (no Asians, no Hispanics and no blacks) are using the highway to go to work (if they do not go to work, how can they support you the parasites if you're not mentally damaged). Stupid folks do stupid things with stupid arguments

Random rants

* NYC and the surrounding towns are fine with about 5" of snow. New England is the Epic Center now. The snow is not wet and heavy, so we do not have the number of blackouts as predicted.

* Some expect the oil goes below $30. I'm an optimist and expect it will go back to 60 by year end. No matter what happens, we cannot predict the bottom but I believe it will be up due to the improving economy and the increasing population. What's comes down must go up (Newton's reverse gravity :)). I bet on several oil stocks including PBR.

* Warned many times on Microsoft. I sold my shares. You cannot milk the Windows and Office cow forever. A high-tech company without successful, innovative products is a company without soul. You cannot dreaming on how to spend your stock options and bonuses all day now. It is a prime example of my Coconut Theory (if you have too many coconuts, you do not work and sleep under a coconut tree for ever and become STUPID).

* The cruise industry should be saturated with so many big new ships. Asia is a good frontier. The prime route is Shanghai, Hong Kong and South East Asia. The secondary route extends to Indonesia and Australia. If we do not have another disaster, it should be a profitable venture. I like the Chinese cruisers and the food but cannot stand the bad public behavior of the rich Chinese. You do not gain others' respect for showing how rich you're but how you behave in public.

Making fun of Jack

Joke of the day.

This is my response to an article on science can change our genes.

I like to have Einstein's mind, Ms. Blonde's body (no name please and only if I'm female) and Jack Ma's luck.

How about I end up with Jack Ma's body (no offense), Ms. Blonde's mind and Einstein's luck in investing. Let nature take care for us!

Tandy Computer

* Globalization connects economies of many countries. Greece is not an important partner except for its olives, tourism and shipping. Hence, it is not making a big dent. However, most countries are not doing good and most if not all depreciate their currencies to save their economy.

* From the stock market, China is doing very good in the past year. FXI almost doubles our SPY. The P/E is artificially low but it is fine compared to its historical P/E. However, Newton's Law of Gravity never fails. Some do not laugh at this joke and they should check in the closest clinic for lacking a sense of humor.

* The bankruptcy law works for Radio Shack. I bet they're unloading and/or closing stores. I worked for myself writing software for Tandy computer. I was surprised my co-worker from one of my jobs remembered my one-man company Micro Architect. R.I.P.

One-man company

Wang was a good computer and revolutionized secretaries' jobs. It replaced at least one secretary with a Wang, not too good looking but function wise it worked. EMail and other office software (meeting, etc.) replaced more.

There were many today's applications migrated from Wang to PCs forming many companies. When you talked to Wang or Ken Olsen of DEC to use PCs, you got fired!

Writing software for a 4K PC using BASIC is fun. I wrote a spreadsheet and a text formatter. All the magazines took my press releases happily (free advertising). DOS was licensed from an unknown company in Seattle. CP/M officials were busy in keeping their tee times when IBM tried to license it. The rest is history.

I licensed and ported a complete accounting software from CP/M to DOS using my customized RS232, very high tech at the time. I sold it for $900 per package (compared to other's $500 per module). I wrote an interactive data (file more appropriate) manager (IDM). Both were my best sellers. Dream big but you have to face reality. 20 packages written by one cannot compete with 20 programmers working on one package.

Running a company is fun. I was the CEO and also the janitor.

50 shades of green

For folks spending $80K for a car, it is driven by the prestige and their dumb desire to climb the social ladder, not how green and how good the car is.

Rolls-Royces have the prestige and recognizable. I like to buy one myself for my dumb ego. However, my Bentley (ordered for the 2040 model with a bathtub) would be too long to make the turn in the drive-thru even they treat me like a King (Berger)

BABA

BABA has not been sorted out in any of my screens. Take a look from finviz.com. It is not fundamentally sound, esp. compared to the low P/E of FXI.

However, I do not bet against it. When you buy it, you're betting on the future such as Tesla, Amazon...It has about 10% cash but 50% debt. I prefer Buy Low and Sell High. It is quite high already even after its recent descend (after the honeymoon). There will be more selling from the insiders after the restriction on new IPOs.

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Repost a joke and hope it will not offend anyone.

Jack Ma of Alibaba is a smart man who can control and change his destiny despite all the setbacks and how little he inherited (I'm not talking about his look). The richest man in China cannot improve his look and health. In addition, money cannot buy everything including job satisfaction, respect, happiness, freedom, and clean air to name a few.

A good piece on him was seen on 60 Minutes. The following is a follow-up.
http://cbsn.ws/YBjL4h

Are Alibaba and the 40 thieves (IPO writers, bankers, buy-side analysts, hedge funds…) stealing in the global markets?

Some memorable quotes from Jack.
http://read.bi/1yzEhyc

Random rants again

* Germany is leading the recovery of EU. The French is living a fine life with the wealth from past years. Do you believe folks working for 30 hours a week achieve the same as folks working 50 hours a week in the long run? I hate to buy French stocks as there are special charges for foreigners.

* We do not need all the non-productive (and many cases corrupt) workers in the Wall Street. Many stock analysis can be done off shore.

Same as the lawyers. In many cases, they're the Robin Hoods in reverse.

* The new battery technology is still being developed at MIT. When it is a commercial product, it would change the world. In the mean time, buying an expensive electric car raises your dumb ego and harm the environment due to spending the excessive sum for a car.

* The government should have intervened in the west coast strike long time ago. It affects too many folks and businesses

Random rants

* HSBC is one of the top 3 banks. Its position depends on how you rank banks. I'll do some evaluation as it could be a buy. It is not too bad compared to all the banks in the world in fines. Remember the Lehman Brothers issuing the mini bonds (risky derivatives) in HK. The investors got them paid back from the issuing banks.

The folks from Shanghai formed (or moved from my vague memory) in HK and then moved its headquarter to London before the takeover. In the early days, it had a lot of cash from Chinese in S.E. Asia where the governments were not stable and many discriminated against the Chinese. It is a case that you cannot control the country's economy without influencing the politics.

* I do not know how Apple can fix the battery problem of iWears. If I have to charge it every day (or twice a day), it would not function as a basic watch. Only stupid folks would buy a $3,000 watch that does not function as a $10 watch. Be careful on the Apple stock price in 2016 or after this major problem surfaces.

The second problem Apple faces is the urge of upgrade. If my phone works fine with all the functions I need, do I line up in the cold for hours to upgrade another phone to 'boost' productivity/enjoyment (actually the dumb ego).

Investing in Apple is different from loving Apple products. Do not get confused.

Market timing

In general, market timing is just a prediction. When the guess is educated, it has more chance to materialize. If it is 100% certain, there will be no poor folks by spending $10 in my book the Art of Investing.

I expect a mild year in 2015 as it is a pre-election year. Statistics will confirm it. However, we have a record-high margin debt. It worries me and by statistics the year after usually do not do well (actually last year was also the record-high year).

I have a simple technique to exit before the market plunges. It worked well for the last two major plunges. It will work but it may not give us the ample time to prepare as the last two. It will not spot the peak but would reduce further losses

How to cure poverty

Contrary to the popular belief, the best cure for the poor is cut down our generous welfare and train the poor. If you have to cut down all the goodies to take a job, you will not take a job. Laziness is a human nature.

Giving them fish all their life is bad.

Teaching them how to fish is good.

Ms. Thatcher said or sth similar from my memory: Socialism will die when we run out things to give.

Random rants

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  • * Record high. It is the pre-election year and behaves like one. Next year will be a different story. Watch out for the interest rate next year.

    * China ETF FXI has been up a lot for the past year even today's P/E is still low. All the bad economic news on China do not correlate with the market. Even with a flat GDP growth, China can increase the living standard by establishing / enforcing regulations, controlling air and water quality, suppressing corruption...

    * I posted many times that Greece could recover faster due to its tourism, olives, shipping... Including myself, no one wants to catch a falling knife unless you have a time machine (mine is being repaired).

    * The pipeline will get a lot of jobs. Please do pay attention to the environment and possibility of terrorist attacks.

Why thin client and cloudy Cloud?

All the components of a PC are so cheap; why do you need 'thin clients'? I do not want to depend on the internet and the Cloud for applications that I need security. However, I bought a chrome PC just for my stock and bank accounts. When I use mail, my quick fingers may click on some links that would bring viruses and Trojan horses.

Lower interest rate forever?

Have we learned anything from Japan with virtually zero interest rate for a long while? 

  All politicians have their agenda and most are short-term, short-sighted and motivated by greed and stupidity.

The new format of CNNfn


Products should not be innovated just because of the word 'innovation'. Consumers should be considered first even they usually select the wrong choice. Making the market appeal for the last buck is very short-sighted.

  • The above is from my book The Art of Investing. It is re-posted here as I looked at the stupid new format of CNNfn.

    I and most users need to have the following info:
    Market indexes and percents of the 3 major exchanges, the price of gold and oil right away. The new format displays it one by one in different places to show you how skillful is the programmer with NO regard to the end users.

    Stupid employees would destroy this company if the management does not 'let them go' and lock them up in a remote island.

Racism

Racism is a two-way street. It is racist if we cannot disagree with a president just because he is black.

The black comedians use racist jokes against his own race; it is racist too and it could be passed to children of any color unknowingly

iWatch could bring the empire down

I feel the fundamentals and prospect have changed for the worse. I cannot find a solution for iWatch for its poor battery life. If you have to charge the battery one or two times EVERY day, do you buy it? My $10 watch provides better function than a $300 or $3,000 watch.

Small and lean government

We need a small and efficient government. If you work for the government, you know how small are their assignments. If we cut down 50% (some said even 75%) of the work force, it would not affect the services. Their benefits (retirement...) should be same as the industry.

There are few exceptions of hard-working employees.

P.S. I used to work for the Federal Reserve Bank two or three years after college. I was given a special key to the executive rest room (no joke) and the executive dining room. If I stayed longer, we may not have today's economical mess :)

Oil

My view as of 1/2015. No one (except God and the Middle East terrorists) can really predict the short-term direction of oil. However, the long-term direction is clear. It will be up. When? One year, two years or three years. I can tell you exactly when when I fix my time machine as illustrated in my book The Art of Investing.

It is based on a simple supply and demand rule in Business 101. The demand is increasing due to the recovering economy and the rising population. The diminishing supply is due to a limited resource especially with today's decreasing investing. Shale gas/oil most likely cannot be profitable at the current price.

I put money where my mouth is. I recommended buying OIL when it was $30 (about the same as today's oil price adjusted to inflation). It went down to $15 or so and the rest is history. When we do not learn from history, we will repeat history

Making fun of the CEOs.

It is called building the empire. They hire carelessly while no one works. I am better than you as I have more under me.

Joke of the day. My company's mission is to be the world-class corporation. While I travel, it means I should travel first class for a world-class company.

The second joke. When I change the company, the CEO has the IDENTICAL mission statement. They must read the same book or attend the same seminar. They do a little better by demonstrating how to sexually harass your co-workers CORRECTLY and LEGALLY without getting into trouble for yourself and the company.

Random Rant

* Greece. Laziness and free loading are human (or national) natures. I really believe they should leave Euro to start a new life and set up an example to the rest of Euro countries. We find the problem of a unified currency.

* Japan favors investors at the expense of its citizens' living standard. Good for the rich and bad for the common.

* If you think China's corruption is bad, India is many times worse. They cannot copy the model from China. Start with some coastal region, supply it with infrastructure... At the current state, 8% is not a spectacular rate (China used to have 10% for a long while). If it can continue for many years, it would be great.

India, a democratic country, did stick with the loser Russia too long. It is also a bad example of protectionism (so you do not improve your product quality).

Now the US plays the India card against China (we used to play the China card against Russia). Who said "investing is not politic"?

* The dynasty of Radio Shack is replaced by Game Stop. If you do not improve, you die from Business 101.

* I have my strategy of playing oil stocks. Buy them except the drillers and explorers now. Forget the oil prices and thank me in 3 years (or earlier hopefully).

Do not let the roller coaster oil price affect your emotions that would damage your health and your spousal relationship

Mr. Short

There is a SA article by Whitney Tilson, Mr. Short. My recent comment:

Did you watch 60 minutes on the author?

That's how you do short. Find out why the company (Lumber Liquidators in this case ) boosts its profit and stock price in such a short period. If it is fishy and has been proven that way, dump all your money including your house, your family... to bet on it.

For me it is not worth it (I love my family, too risky and too time-consuming). It is too risky and I prefer to pay no long term capital gain Federal taxes if I can keep my income to 15%. Never say 'never'.

To short PPC and SAFM

I consistently make money betting against the shorts (termed as short squeeze). When they short too much, they are running out of stocks to short. When the stock has been shorted more than 25% of the outstanding shares, opportunities exist. For my limited actual trading, the average return for this scenario is 24% (vs 13% for all stocks I traded in this period). There are about 44 cases in about 2 years.

The current stocks are the two chicken companies: PPC and SAFM. They have good fundamentals and the shorts are over 40%.

Only hedge funds short constantly (another term for hedge for most folks). The hedge funds in general are not doing great as a group (they cannot even perform better than SPY in the last 5 years).

MU

There is a rumor that Apple and LG will buy most of the DRAM from Samsung and that's why MU's stock was down in last several days. I bet it is not true. Would Apple take the risk of no supply from the supplier who is also the rival? Even if it were true, MU still will make good profit by the better margins from other sources as there is a shortage right now. I placed some orders yesterday

Making fun of Buffett

 I got a call from Buffett asking me to lead their stock research.

I asked him why for a nobody; you may be asking the same question. No kidding.

He told me that he should have read my book Scoring Stocks (from Amazon) to buy Apple instead of IBM in May, 2013. It would save his company millions of dollars minus $10 for my book. Not to mention the market timing technique that had worked in the last two major market plunges.

I told him, "OK, I'll beat your mediocre returns of the last 5 years."

He said, "You can do better than that and at least beat SPY. If you do so, no one will be that stupid to leave my fund and pay the hefty capital gain taxes."

I told him, "I cannot beat the market as you are the market especially after your expensive fees. In addition, I do not know how to avoid day traders from riding my wagon in trading. Also most of my big profits were made in small stocks that your fund cannot trade beside owning the company."

I woke up trembling. I'm glad it is only a nightmare

-- 
Joke, reality or just nightmare? You decide.