Monday, November 30, 2015

Responses to today's news

* 10 years ago, I predicted Euro would be the reserve currency. Well, the weather man can predict the weather this week better than a month away. Chinese Yuan deserves the reserve status as China could be the #1 in trading with foreign countries if not already.

* Buy Chinese IPOs on the first day and sell at the end of the week (same day for US IPOs). If you made a million, send my share to my secret (to IRS) retirement account.

* On airline strike. Terrorists and unions are not good friends to airlines.

* On Amazon's drone delivery. Would you deliver my package to the 5th floor in my NYC apartment with the window permanently closed?

Friday, November 27, 2015

Cutting the cable

Bought two TVs in a month in addition to the one I bought during the tax holiday.

One is for my son 2 weeks ago. Today I bought one for the bedroom. Today's purchase actually saves us money by cutting the cost of the cable box for the old TV plus all the saved electricity. Good for me and good for the world (also good for Samsung and Best Buy). It saves us about $16 a month for two rentals plus the saving in electricity.

Target and Best Buy advertised the same TV. Target would save me extra 5% with the credit card. However, it was sold out. We went to Best Buy and it was $320, about $50 cheaper than the on-line discounted price. In addition they gave me a $20 gift card.  The Smart (Wi-Fi ready), 40" HD costs less than $300! I bought it on Friday afternoon, long after the block buster time. I do not know how they can make money. Of course, being frugal we drove to New Hampshire, 20 minutes away from my house to save sales tax. Sorry Mass.

I bought the best in-door antennas from Best Buy for $80 ($20 less than the list price). If you want to save money, try the $15 one and upgrade to more expensive one if it does not work. I do not have time to go this route. They're not for my family room where I still have cable. Relax Verizon.

Wednesday, November 25, 2015

Daily rant at Seeking Alpha

* There is a lot of news, but actually there is nothing that cannot be predicted. Do you call this macro economics - I have never taken a class in economics?

First the economies all over the world are connected. When the USA (now China) sneezes, everyone get the cold.

* The organic stuffs have higher chance of being contaminated. I do wash my vegetables even they're ready to serve as I do not know how clean are the workers. I have to depend whether they wash their hands in the rest rooms. There is a virtue of cooking vegetables even it would kill some nutrients. These similar restaurants are sitting on a time bomb. Buy when they're down and sell when they're up.

* I predicted a small gain by the end of the year even continued same during our August fierce correction. Why? There is no loss in a year before the election from my memory. I also predicted a side way market - buy at dips and sell at surges. Quite opposite to the trend chasers.

By the end of the year, I may write an article on how the two predictions will materialize. Too many examples jamming my brain that has old and limited memory but with the fastest CPU you can find.

* I'm going to buy a game console that would help me to exercise. Nintendo, your box has been 3 years old. It should be a museum piece. Can I play PS3 games on the PS4? If not, should I donate my old games to Salvation Army? I do not buy your stock until you get rid of your losing divisions. MSFT, your XBox almost did not make it to the world by your management who do not want to take any risk. Dreaming how to use the bonuses and options is more important than actual work.

* A friend of the enemy is not automatically a friend. Example: Russia, Turkey, USA...

* Do what a Brazilian do when you're in Brazil including money under the table.

Tuesday, November 24, 2015

My controversial view?

* This is a response to the responses to my previous post at Seeking Alpha.

First, being an immigrant myself, I do not object immigration to the US at all. However, we have to do it selectively. Which one do you admit to this country: One investing half a million in or one  collecting welfare on day one of arrival? Until recently we accepted the latter on the ground of refugees and/or disguised political refugees.

We do not really need Middle East if we conserve energy. We have been the biggest consumer of energy per capita wise. If we let one terrorist in among a thousand of peaceful refugees, it is one too much. Agree?

We have been seeing the body bags returned from the Middle East. These young people do not know much about Middle East and many have been sacrificed for the foreign countries. Some of these countries do NOT want to fight for their own freedom. Why should we? Suckers? They should go to college and enjoy the best time of their lives instead of fighting and dying.

How many terrorists are from the Middle East including our allies in Arabia? When we bomb them without mercy, we should expect the reaction as Newton said. They cannot fight against our advanced weapons, but they can in many other ways. Every time I wait in the long security line, I know we've already lost.

We cannot be the world's policeman even we're rich during the 50s and 60s and solve the world's problems. Our Congress must be controlled by Israel who drags us to this conflict - any 'under table money?'.

Folks have different views and we cannot enforce our views on others such the Vietnam. We're not threatened by the communist Vietnam or the communist China today, are we? Or, what do we feel if the Middle East folks want to change our political or welfare system?

Just I'm tired of involving in continuous wars since WW2. Fix the economy so everyone has a job. Being number one is in the mind of our leaders, not the average Joe.

Rants in Seeking Alpha's Wall Street Breakfast

There are a lot of news.

* Why we need revisions in GDP and other data from the government? If you cannot do it right now, wait for the right time. GDP should at least beat inflation (again who is measuring inflation?) and our debt/GDP is important. If I borrow a million to improve my income by $1,000, it is no good unless I try to fool you.

* China is doing it right in the broker requirements. They should have a similar SEC to set up and enforce regulations. Really need to enforce and crush scams using false (or termed shell) corporations to cheat.

Taking out margin and shorting are good to me to reduce speculation.

* Had Sharp 2 times and both times lost money. The TV technology today is LED, not LCD. My experience in buying a TV I just posted yesterday.

* Apple will not make money initially with e-payment. However, it is important before competitors get in. In Hong Kong, their Octopus card has been for at least 10 years and they're upgrading to the latest technology. You do not want to carry changes in your pocket after so many heavy stuffs such as your phone. Eventually the beggar will ask you for money via e-payment.

* BA has been doing good and it is one of my few buy-and-hold stocks. The order is just serving a place in the queue and there is no punishment for not buying.

* Terrorists... were described in my blog I posted yesterday. I added comments why I do not want to be the president as a joke.

The next post is my response to the comments of this post.

Monday, November 23, 2015

My new TV

Bought this 55" 4K Samsung TV during the tax holiday. Use it for over 3 months. Here is a brief evaluation. It is a great buy.

* Best Buy includes haul away. My old 57" TV is huge and heavy. It could cost me a fortune to get rid of it. The bargain is no cost to haul away, free delivery and no sales tax.

* My old TV came out not too long when they introduced HD. Comcast even gave me $200 credit to promote HD. The old tube technology makes it so heavy - it has wheels. I enjoyed about 2 years earlier than most waiting for a 40" TV for a similar price.

The old TV does do everything well as the new one.  It is hard to watch when I cut down some trees to let the sunshine in. Thanks to the LED technology. I do not notice a huge jump in the picture/sound quality.

* My new TV was advertised $100 less the following week I bought it and I got the credit. Similar to the $20 credit for my son's antenna.Thanks to the decelerating price. With this speed, I should get it free in 10 years!

* Curve TV and 3D TV are fads that will not last for long. Watch out for some latest models. They're like new model of cars that may have bugs to fix. Do not depend solely on reviews as most reviews are done within the first month of ownership. When it does not break in a year, most likely it will not break before its time to retire.

* I'm returning my cable box in my bed room as my son's cheaper 55" Vizio TV is connected to an indoor antenna (costing $99 from Best Buy) without any problem in getting most channels. He needs Vizio's sound bar ($99 on sales) that has Blue Tooth capability.

May have spent too much time in evaluating TVs but it is fun. We should have spent more time in evaluating stocks. Check out my book The Art of Investing. Its Kindle version is only $10 with 700 pages (about the size of 3 books). It should be a best seller (but not) considering how much money you will save in investing. It covers most topics in investing.

Sunday, November 22, 2015

How nice a person are you?

From my Facebook, "A person who is nice to you but not nice to the waiter is not a good person."

I modified it:

* A person who is nice to you but not to the waiter (even s/he gives good service) is a nice miser.

* If the restaurant is the one you frequently visit, you're a risk taker and a fool..

Friday, November 20, 2015

Easy fixes according to me

Our politicians are 100 times smarter than I, 100,000 times richer than I, handsomer than I (debatable for most esp. Trump)..., why they always made the wrong decisions? Simple answer. Their agenda is buying votes and mine is for the good of our country. Here are the easy fixes.

* Corporate HQ exodus. Lower their taxes first.

* Health care problem. Lower the medical expenses first.

* Building border walls like the Great Wall of China. Punish the employers who hire the illegals first.

* Social welfare. Do not punish folks for working and give more welfare to workers than those able welfare recipients. Same to  dissolve multi generation of teen age mothers.

* Fight terrorism. Understand why they want to be one (or patriot for them). Think like one on how to give us max. pains with the least resources.

* Improve the economy so everyone has a job. Our 'offense' budget is more than the next four countries combined. Unless for our own benefits, do not send soldiers overseas. Today's weapons are missiles and cyber security and how many soldiers we need? 

* If we learn the prediction from the Bible or the endless religious wars, we would not be involved in the Middle East conflict.

* Learn from history. Are we threatened by the communist Vietnam today? We should have learned it from the French.

Just write down this list at the first sip of coffee. That will be an endless list.

Tuesday, November 17, 2015

Daily rant 11/17/15

* Terrorist attacks have little impact on the financial markets. I learned it from the 911 when most of my stops were executed and then the market came back in 3 days without buying my stocks back. Now I use 'mental stop' (my stupid term). Investors should wear two hats: one for humanity and one for investing.

* Pandora is no more. There are many similar IPOs in the last few years that I feel very doubtful. My recommendation is to buy it on the day of IPO (if your broker can do so) and sell it at the end of the day (or the week). This is the typical IPO for many new companies. If you believe you're buying the next Apple at the IPO, there are at least 10 companies that do not make it in 5 years or less.

* I do not trust the government reports as I used to.

* Share buyback and dividend boost the stock price and hence the stock options owned by the management. They should plow back the money for long-term growth. If I need the dividend, I just buy less shares.

* Every country including the USA should balance the budget. We cannot and should not let our next generations to pay for our debts. Bite the bullet and do not trust the politicians who spend recklessly in order to buy votes.

* We used to be #1 in missile technology. We depended the entire space program on shuttle. We take away the dreams of students working in science and space. Instead of running to the top, we run to the bottom. Let no one left behind but the smart ones.

Actually China has better missiles at lower cost if there are no political or 'security' concerns. China in the 50s could not build a reliable bicycle. The father of China's missile went back after the communism witch hunt. I firmly believe Dr. Chin was a dedicated scientist, not a communist. History has spoken and our stupidity has repeated history.

Monday, November 16, 2015

Cross Road

Apple is coming to a cross road that it did many times successfully. They need an innovative product and iPad Pro is not innovative enough to be the one.

There are several products including Apple Watch, Apple TV, Apple Pay... They are not enough to keep sales at the current level when iPhone sales is deteriorating. However, when they integrate together and in the long run they could lead us to the promise land. Watch out for what Korea and even China doing the same.

When iPhone integrated the phone, iPod, GPS... into one device, it is innovative at least in marketing (as many companies in Asia had done sth similar at that time).

The urge to upgrade

Apple is fundamentally sound today even the price is falling. However, there is little urge to upgrade to the next model. Ask 10 of your friends whether they will upgrade and ask them to send the same email to 10 of their friends. I do not have to do so as I know the answer: There is NO feature we need to upgrade. Hence Apple could be peaking soon if not already.

Good product & stock price appreciation

A good product does not mean the company's stock price will appreciate. If the company has great products but the E/P is low or negative and/or the debt/equity is high, most likely it will not appreciate. Do not fall in love with any company.

Newton said,

 "For every action there is a reaction". For every reaction, there is an action and there will be no end in actions/reactions. It seems like a Kung Fu movie to me with endless revenges. If there is one terrorist among a thousand of Syrian refugees, we will not have world peace

Thursday, November 12, 2015

Does size matter?

My average class size from K-12 was about 45 but my classmates are doing great. For example, in my class in grade 7, we have one famous TV chef (you may know him), one movie director in Hong Kong, one chief hospital administer, one MIT doctor, at least one doctor, one dentist, one pharmacist (the last 4 are in US)...among 45 classmates.

I believe education starts at home and it requires the desire or willingness to succeed. We would be a nobody if we do not succeed in school and NO ONE will bail us out. Here is my blog on education.

Our problem with video games today.

Wednesday, November 11, 2015

Weapon of choice

The weapon is how to control your enemies' internet and the satellites that hook up to GPS (that missiles depend on), your financial system, your electric grid... even your car.

Future soldiers are hundreds of programmers carrying iPads, not millions of soldiers carrying guns. How to defend a million drones (some with bombs) heading towards you?

Am I still in my dream in a quiet day in the stock market?

High wage leads to high tax and so solve our economic problem?

High wages would deteriorate our competition edge in the global market.

The country's independence theme is "taxation without representation". However today we have "representation without taxation" that is even worse considering about 40% do not pay Federal taxes.


They tried harder (or cheated harder) and they failed.

One pillar of success is honesty besides hard work, innovation and consistency. GM wanted more money. Toyota wanted to be #1 and then VV wanted to be #1. They all violate my rules of 4 pillars of success and there is no short cut for success.

There are many bad management 'ideas' by the smartest folks described in my following blog. It is too long to list here and there is NO gain for me to boost up my blog's view counts, so do not cry out loud for saving digital broad width.


From my book The Art of Investing. The following was written at least 4 years ago.

The S&P500 performance under Republicans vs. Democrats since 1926:
Annualized return under Democratic presidencies: 13.74%
Annualized return under Republican presidencies:   6.25%

Game the political game, the welfare game, the stock market game...

There are many illegals in the US going to be legal (if they are allowed by our politicians in order to buy votes) and so the 'uncounted' will be counted.

When they're legal, it means they're legal to collect welfare and legal to be lazy. What a country of opportunities!

At least today's illegals cannot collect welfare and they're still working. Some are convinced that the last election was won by the swing of the Hispanic votes.

My predictions:

* The Republicans will win. Why? Very seldom we have four terms with the same political party. My theory. People want changes. When you've bread for a long while, you like to try fried rice.

* While Republicans are pro-business, the stock market usually does not fare well when they rule. My theory. The market is not rational otherwise we do not have poor folks.

Statistics never lie.

The simple question is: Do you want to work for the minimum wage (and less in many cases) and lose all your freebies including the free health care (in many states)? People are lazy, not stupid.

Many illegals work less than the minimum wage (many tricks). Once a while, we have an illegal suing an employer for doing so. The Immigration office and the Labor office do not sleep in the same bed for sure.

On the first day of the new law, the line to the welfare office will be LONGER than the line to an Apple store on the new product day; many folks are in both lines.


Daily rants at Seeking Alpha

* BABA broke all sales record in one day including the US records. Retailers create special days (opportunities to sell) to celebrate such as Day for Singles. Well, there are about 4 times Chinese than Americans. We're still ahead per capita wise.

On retail.

* I sold my Apple last week. Enjoy the ups and downs of Apple.
Here is my censored Apple (the one why we're not in heaven).

Tuesday, November 10, 2015

Chinese money influx

A good portion is money from corruption in China.Some do not believe the US or Canada will take them back to China. At least one case as the Obama showed his good will during the visit of Xi.

Before and during the Hong Kong takeover, Canada, Australia... let many Hong Kongers migrated there boosting their real estate markets in many cities. There were resentments as the current generation cannot afford to buy their first houses. The old generation do not complain as their house prices have been doubled by the influx.

The US learns it the hard way. Today we give them green cards if they invest half a million dollar. It is a small change for many if you ignore the medium income that is not real. Do you want to give green card to one who invests half a million dollar or one who comes here to collect welfare on the FIRST day? I rest my case.

Monday, November 9, 2015


My current strategies are: Buy year-end winners (done), buy year-end losers (good companies only) and Santa rally. Worked before and hope they work again as described in my book Strategies (search "Strategies Tony Pow" in The market is a guessing game to me. I put money where my big mouth is.

The third wave

The retail industry is going thru the third wave if not already. The first one is Walmart and the second one is Amazon. After I visited one clothing store this Sunday, I realized a third wave is going on as Peter Lynch preached (i.e. learn from the mall).

The new retail store is formed by the exporter(s) in China who have strong ties to the manufacturers. They cut down the middle man (themselves). Judging from the customers hauling carts of merchandises with smiling faces, I know the wave has started if not already. There are several retail chains already all over the world even in small Ireland I visited recently. If you have stocks on low-end retail chains, watch out.

Saturday, November 7, 2015

Where to drop the bombs

Today China celebrates the 'victory' against Japan WW2 inhuman invasion with plenty of war crimes. Japan still has not admitted its wrong doings. Thanks to the US especially the two bombs that ended the war. I wish they're dropped in the imperial palace and the major shrine where the crimes were started.

If you think I'm too harsh on the Japanese, you're wrong considering how many war crimes they had committed. How many millions including babies had died, raped... because of the Emperor's ambition to rule Asia. Today they do not admit they had done anything wrong. One Japanese mayor did not think Nanjing massacre happened. If there was a third bomb, it should be dropped on him. When we do not learn from history, we will repeat history.

Inflation meter

When the beggar asked me for a spare dollar, I felt the inflation pinch. That's the real inflation meter. Forget what the government tell you.

Flying Tigers roar (less & less now)

First Mao was not a good governor, but a great revolutionist. It is Peter's Principle at work; when you promote to a position you do not qualify, you are no longer  effective.

China did express its gratitude to the USA, especially the Flying Tiger. There were some US veterans honored by the president in China - just watched CCTV-News in English. Unfortunately most have passed away by now.

On a personal note. About 20 or so years ago, I was bummed out of the best hotel (at the time) in Taipei due to the greeting of the Flying Tigers. I was furious but now I thank for what they did and they had more right to stay in that hotel than I.

Deflate Gate

On deflate gate, should one be punished more for deflating a football or beating his spouse? We have a wise judge. I hope to cut it down to 2 games (of course pre season)  suspension instead of a total victory for Brady as a compromise. Well, it is only a game after all.

Has Brady proved recently (7-0) that he does NOT need any gate to win? Jealousy is a human nature- sorry sour losers! I hope I do not offend you the losers by speaking the truth.


Most likely it is due to our isolation to Europe and Asia as a different continent. Pearl Harbor woke us up. However, the US became super rich to all our competitors had been destroyed and we're flooded with skilled immigrants from Europe.


The 6 millions Jews was worst in term of number, but not in term of suffering from their rapes on women (and under-aged girls), killing babies, killing innocent... At least we prosecuted the war criminals on Jews but not those criminals on Chinese.

At least the German admitted their crimes but not the Japanese. I forgive them but not forget their crimes. Nanking Massacure movie can be rented from Netflix and even you're not a Chinese, you will be angry on how the old soldier boosted how they raped young girls. If you believe in Karma, the Tsunami were the tears of the victims who do not have a voice.

You lazy bone

Teach them how to fish instead of giving them fish for the rest of their lives.

Laziness is a human nature.

It explains the multi generations of teen age mothers. Education (or lack of education) starts at home.

With low oil price,

Tesla (an electric car) could be a museum piece.

Our offensive budget is quite offensive

Our 'offense' budget is higher than the total budget of the next 4 countries combined.

Do we need a carrier (or two) driven by dual nuclear reactions?

Do we need all the missiles that can destroy the entire world with a push of a button?

Interest rate and the stock market

Most likely, the rate hike will be insignificant in a year before election.

I bet a higher hike in 2016 that would cause the market to take a bigger breather due to:

1. High margin debt would collapse.
2. Less acquisitions and buyouts due to higher interest rate.
3. Bottom line would be hurt due to higher interest expenses.

The other risk is the strong USD.

Daily rants

* It is a sideway market and impacted by daily news. When we have good news, the market rises and vice versa. I bet it would last until the end of this year. Next year, all eyes will be on the rate hike.

Strategy: Buy at dip and sell at temporary peak. In August, I bought 4 stocks: GM, GILD, AAPL and GNW on the same day. Sold GM yesterday for over 10% gain and GNW for 10% gain in ONE day. The other two stocks have over 5% gain. Proofs are available.

* The market is still risky. I try to maintain 50% in cash. If I followed my books, I should have 100% in cash before the August correction. I am just a human being blinded by my greed and fears and emotionally attached.

* BABA will depreciate further. If so, it just follows the average pattern of IPOs described next. It rises big on the first day of the IPO; the strategy is to buy it in the morning and sell it at the end of the day. Enjoys the rise during the honeymoon period. Then returns to its IPO price. Dips when the time elapses so the managers/owners can sell their own stock

Asked me for proof

He is a hypocrite. He asked me for proof and I showed it to him. At the same time, he did not show me the proof of buying stocks at the dip.

Here is the proof:

Check the next post in proofing my purchases of OIL. They have over 25% return.

The two posts were the responses to a similar question. It reminded me of my SA article recommending 15 stocks. I was attacked with disbelief of my amazing returns and folks asked for proofs. However, the average return beat SPY by 110% in (ignoring dividends) one year from the publish date of the article.

The blind following the blind

Authors of investing books never make a buck in the market. So are 'professors' teaching investing. They still have to drive an old Toyota if there is no incomes from their teaching and 'consulting' jobs. Their students should ask for refund. 

Best sellers who recommended to get out of the market in 2009 are still best sellers (covering up their previous prediction with new editions). They even form a company to sell their ideas of not making money!!! Funny that all the 'excellent' reviews from famous celebrities. They believe they can cover the our eyes and their results will never be shown only by their faithful readers, the victims.

An author recommending buying in August dip in a Seeking Alpha has not done it himself. He asked me for proof on my dealings and I showed him. He did not show me his proofs after repeated requests. What a hypocrite.

We live in a funny world that I do not understand.

HSR not for the US:

* It is a political agenda, not for jobs and economical reasons.

* Not feasible judging for most HSR operations in the world esp. with our low density of operation and our efficient air and land transportation.

* Who wants to work in the tough conditions in laying rails? It is easier to receive welfare. Remember, the last major railroad projects were done by the Chinese even you do not see any yellow face in the milestone picture.

There are many other reasons I forgot as my post was deleted for no reason at all.

High Speed Rail and me

Usually the high speed rail would be preferred in trips less than 2 hours. I prefer HSR than air from Boston to NYC as it takes me right to the city center without spending the expensive taxi bill (and frills you get more than you bargain for) or being robbed by UBer drivers. The air planes take a long time for takeoff / landing. The HSR here is not really high speed.

From many HSR operations, most are not making money for a long while. China is different as the population density and the under-developed in air/highway systems (even substantially improved).

It is politically incorrect to hire Chinese for HSR, but we all have to face reality.

Safe, 'medium speed' train

"Medium speed" is available now by just taking away the cell phone from the train engineer

Are we in Russia?

There are many deleted posts at Seeking Alpha. When one post is deleted, all the posts under that post are gone. They are censor Czars. They have no purpose in life except exercising their censor power. Some posts are political, some are funny, some are just personal... Get a life please!!!!

Many of my posts were deleted due to promoting my books. Who are not promoting themselves, their companies...? However, I cannot figure out how some can be exempted consistently. I guess you can delete whom you want to discriminate against - is it is legal? The profits of my books so far have been donated to charities. Are you against charities? My posts have more useful info to your readers. If so, I'm promoting your site and I should have better treatment.

Travel aboard

When you're in Europe, watch out your wallets. Some can read your credit card info remotely. Cover it with aluminum foil - patent pending. :). I prefer to pay in local currency as much as possible.

When you're in S. America, your hotel safe may not be safe. Kidnapping is a past time in many S.American countries.

Some Indians survive by less than $2 per day. When you're in India, everybody tries to cheat you; I do not blame them as $10 is a lot of money to them.

Take a picture of your credit card including the back for the phone number and your passport.

I would stay away for crime areas and trips that demand more than my body can handle.

'Legal' drugs and deformed babies

I intentionally missed investing in 'legal' drug companies as I do not want to count my money with filthy hands dripping in blood.

How many deformed babies due to the 'loving' parents taking drugs? Use simple statistics to find out. It is better than spending millions in finding how insects mate.

One friend told me Mao and Deng lived long life even they're chain smokers. Many exceptions for sure. However, statistics never lie. China has about 30% male smokers dying prematurely.

The other side of a story

Prostitution is not a sin business. It satisfies some human needs and it could lower my rape incidents. Why the 'smartest' financial guy in France raped a maid when he could pick up the phone and call for the best service at a reasonable price? As long as they do it right without spreading diseases. It should be controlled, regulated and priced accordingly. :)

Politics is the culprit

We cannot tax the rich excessively to force the golden geese to fly away; we have a record exodus this year.

With high taxes and regulations, we will not compete globally. Many companies have moved overseas already.

Politicians care about the votes, not about the future of the country.

Trump will win if he is less Trump and others can beat him if they're less politician.

Daily rants

* Normally I do not advise to buy newsletters on investing. Drug company is different as it is too hard for retail investors to understand the potential prospect of a drug company: the pipeline, expiration of drugs, profitability of drugs... Reading SA hopefully helps on understanding drug companies; stick with the larger ones as the smaller ones can be manipulated easily.

* The merger of two drug retail chains should not be allowed. Having less than 3 major competitors paves the way to monopoly - and my wife will clip coupons for 2 instead of 3 drug retail chain (a past time for her).

* The government should fix how to raise cash not how to borrow more money. Every voter wants to get more freebies but does not want to bite the bullet - that's why US is declining! it is so simple, so obvious and we're so stupid and so short-sighted!!!!

Why China has to approve a jet maker from the USA

Here is my guess. It is not the jet but the engine. Hence China can approve the planes with their jet engine for commercial use or China use the engine for its own commercial jets.

I believe China cannot buy fighter jets from the US and they buy them from Russia. On the lighter note, we can sell China all the missiles and jets with a built-in GPS. When they're directed to us, they will be automatically returned to senders - just like Elvis would sing.

On the similar topic. China had a deal with GE for buying their engines with a clause of technology transfer

Random rants

* As Einstein said, relatively jobs have been improved. However, the job picture has been made too rosy: little improved median salary, uncounted, unqualified unemployed folks, counting twice folks seeking two (or more) jobs... Good economy would trigger the Fed to increase the interest rate and that would damage the stock market. Good news for the economy and bad news for the stock market.

* China's stock market has an up and down year. Trailing stops work. Shenzhen is similar to the silicon valley (without the silicon ladies). If you bought all IPOs and sold them in a week, your loots would be more than you can handle - 10-fold returns are quite common. It fluctuates far more than the general market. Today is the time to count your loots with your hands dripping with greed and not pressing the Buy button.

I told you so

Here is that article in 2011. If you profited from following my advice of not buying foreign miners on rare elements, please send my share of your loot to my secret retirement account. One good deed deserves another - be honest and generous.

Mr. Xi and Mr. Ma meet

They cannot refer each other as presidents politically. Funny!
Are they talking conflicting objectives or just say "No change for now.". The push by Ma is trying to impact his party positively before the election.

Taiwan is too small (vs. China) and they depend a lot on China economically today. Eventually Uncle Deng's "One Country, two systems" will prevail - may not be in our life time. The recent protest in Hong Kong set up a bad example for Taiwan to follow.

There is a double date (or a single date depending on whether they want to include their spouses) after the formal date. They do not share the same bed so the 'date' is arguable or we have to change the definition of 'date'. Who will pay the tab? I will if it is below my high limit that is $25 per person with no drinks. My $100 would go down in history and it could be the best $100 I spent.

Mao and Chang would come back and said "What the hell!" - if they are not already in hell.


In less than a year, I have about 50% return despite the decline of the Chinese stock market, ghost city... If China is turning into consumerism, housing should be rated as number one with the basics such as food, cloths and transportation.

Shorters of EBIX

Shorter, if you do not cover, you will be naked losing your shirt now and your shorts soon. EBIX's fundamentals are sound but it has record high shorter percent.

Evaluate ETFs

Described in many of my books, you can obtain the financial ratios of an ETF, such as P/E from Yahoo!Finance and RSI(14) from I have a simple ETF rotation technique described also.

However, many ratios such as debt/equity are not readily available. To do so, get the average of the top 10 holdings (more if you have time) of an ETF of any financial ratios.

Kings of California

California should be broken up into two countries. The South and the North are quite different - some laws worked in the South do not work in the North. I will assign Trump to the South to fight the nasty Mexicans and myself to the North to enjoy all the wine and fresh air/water :)

Take advantage of institution investors

Noises are created by institution investors who manipulate the stock price. Stick with fundamentals. Buy when the fundamentals are good and vice versa.

When I wrote the book Scoring Stocks, Apple scored very high ( IBM, my first candidate for the example used in the book, scored very low) and I recommended Apple in May, 2013 (the publish date of the book) when almost all institution investors dumping it. The rest is history.

Recently I recommended to sell it in my blog in Feb. 2015 when Apple was over 132 (should have shorted it). I bought it very recently when fundamentals improved and sold it last week for more than 10% quick gain. I am not a trader but just a guy who wants to make money whether I have to wait long or short.

Food over exercise…/soda-and-junk-foods-are-not-ma…

This article must be written by soda companies or junk food makers and it has been a great disservice to the public.

I'm the living proof. I used to eat greasy food (yummy though) in Chinatown with about 2 hours walking every day (more in a nice day). After I retired, I eat the same amount (healthier but tasteless lunches most of the time) and with reduced exercises (due to laziness). I lose more than 10 pounds (a lot for my frame) without any gaining back for over 10 years.

Tuesday, November 3, 2015

The current market

I'm reading an article by Sarah from Barron's on how to use hedge fund techniques to maximize gain while minimizing risk based on the so called Modern Portfolio Theory. The article is full of convincing data. But, from my REAL experiences, they do not work. Otherwise, we would not have any poor folks. You need to exit/return the market by following some simple techniques as described in my books.

My following articles demolish her entire article. They are copied from my book The Art of Investing.

Click here for Hedge Fund according to me.
Click here for Modern Portfolio Theory according to me.

The following are my predictions.

It is a side way market: Buy at dips and sell at temporary surges. So far so good as predicted. I put my money where my big mouth is.

Even if they are super stocks, I still sell them (one too early but I need the cash to buy). Click here for my performance. They are real trades, not the ones you used to see in the ads.
For more, click here.

I predict we should have a small gain for the entire year of 2015. Why? From my recent memory, there is no down year including 2007 in a year before election. No one is 100% sure, but the more educated the guess, the higher chance the guess will materialize.

2016 is more dangerous due to the record-high margin, strong USD and my theory "What's go up must come down" (Newton's gravity theory looking from another direction :)). It is described in my book Profit from 2016 Market Crash. Even if there is no crash in 2016 (not likely according to me), the insurance is justifiable over any possible gain, which should be smaller than peanuts.

One best seller convinces you to sell in 2009 and even in 2014 in later editions. Great English, great credential... But if you followed them, you would miss all the big gain. I had 80% gain in my largest taxable account in 2009. Market timing is based on technical charts and a simple one without using charts, not by a Ph.D. degree, good looks (I do not mean I do not have good look :))...

Hedge fund - nothing to hedge in a rising market

LTCM, with two Nobel-prize winners, excellent supporting team and best technologies then, ran their hedge funds into the ground. Many hedge funds are closed due to frauds and/or poor performances.
The primary purpose is supposed to ‘hedge’ your investments from market plunges / dips. Since 2008, the government prints so much money, the market recovers and makes the hedges (shorts, derivatives, etc.) unnecessary. In reality, most hedge funds do not hedge.
Hedge funds get tons of press coverage as the Holy Grail of investing. The media need the advertising from this $2.5 trillion industry. It is similar to mutual funds but most tend to take more risk for better returns. Most require higher minimum investments and more restrictions such as requiring longer periods before withdrawal.

It could be the worst deal to their customers: 2% average up front and 20% average on your profit. It is more acceptable to me if the 20% is on profit over the S&P 500 or any relevant yardstick to the specific hedge fund.

Well, if they make a lot of money for you, it is not too much to object. However, most risk your money by betting big recklessly. When they win, they get 20% of your profit and they use you for advertising to lure other suckers. When they lose your money, they do not lose a penny. It encourages them to take big risks. I do not know any hedge fund (HF) manager who pays you back your losses.

An average mutual fund charges about 1.5% management fees. An average hedge fund charges 2% that would cover the expenses to run an office, market the products and research expenses. While the average mutual fund tries to beat S&P500 index or an index specific to the fund. The real compensation of an average hedge fund depends on the 20% of the profit.

You have better return by investing in a no-load index fund or a diversified ETF than an average hedge fund. To calculate the average hedge fund performance, you need to include the many hedge funds that are out of business.

After a hedge fund has failed, most fund managers just open another hedge fund (if they do not go to jail due to frauds) and give you all the excuse for losing your hard-earned money. Some lose their reputation but you need to check them out.

In 2011, the hedge fund industry did not beat the S&P 500 index fund after fees. I bet the hedge fund industry did not beat the market after 2011.

Some hedge fund managers learn modern portfolio theories from Ivy League universities and apply them in the hedge funds. Often their theories are wrong due to wrong testing procedures or they cannot be sustained in real life.

They usually invest in new companies and small companies where they would have big profits swing. They need to learn the business of the company they plan to buy the stocks, interview the owners, read between the lines, and double check whether the owners are telling the truth by talking to their competitors, vendors and customers. It explains the high cost of their research. For us, we just look at the transaction of the insiders to have the better research almost instantly with a low-cost subscription service. There is no need to travel to visit the company unless you want to. 

Some use their specialty in certain sectors and that's fine. If they use derivatives, be careful and that's what resulted in our 2007 financial crisis. Derivatives could reduce the risk of the portfolio if they are properly used. If you still want to invest in them, ask for their methods and their historical performance. Very few hedge funds are good. When you find a good hedge fund, most likely it has been closed to new investors or its fees are outrageous.

The owner of a famous baseball franchise lost big money from a hedge fund that concentrated in the oil sector.  Almost every ETF in this sector made good money that year. He still stayed with the hedge fund and had similar miserable return the following year. I did not blame his first mistake, but on his sticking with the same hedge fund after a losing year. It could be the hedge fund gave him a hard time to take his money out.

One hedge fund has a performance of 25% every year for a long period. The SEC, take notes and investigate whether they were using insiders' information. There are very few hedge funds with consistent performance beating the market after fees. If you find some, stay with them forever. One hedge fund was rated as the top fund and the next year it was out of business due to poor performance.

In 1980, this industry started with really capable fund managers and made good money for their clients. After that, every analyst wanted to open a hedge fund and most did not even beat the market after their expensive fees. Alternatively, just buy the ETF SPY and relax, instead of waiting for the hedge fund to wipe out your savings.  This industry is not properly regulated.

Do not believe in any articles / ads praising how great the hedge funds are without knowing their credibility and their hidden agenda. The hedge fund indexes usually ignore the survivor bias of the bankrupted hedge funds and the early exits of many hedge funds.

Since the hedge funds very seldom keep the stocks more than a year, their capital gains would be short-term and hence would be taxed at higher rates than the long-term capital gains. In addition, most funds have 1-3 year lock-up periods and only allow withdrawals on the first day of each fiscal quarter.


·         From WSJ, from 1999-2008, the hedge fund industry beats the S&P 500 by 13% a year. From WSJ, from 2009 thru July 2012, it lagged the market by almost 8%.

In 2011, the average hedge fund lost money when the S&P 500 was flat. In 2012, the average hedge fund earned about 6% when the S&P 500 was up 13%. It is ‘genius’ to buy an ETF representing the entire market instead an average hedge fund.

·         Now hedge funds can advertise.
A pig wearing lipstick is still a pig. If you run 5 hedge funds, you will advertise your best fund. Advertising industry will benefit and eventually their investors in hedge funds will pay for this expense.

·         A hedge fund article from SA.

·         Another hedge fund fraud.

·         Gold even managed by great hedge fund manager is down as of 7/2013.

·         A famous hedge fund manager (so is the one on Sears) has big losses in JCP and shorting another company. It teaches us to diversify and be conservative.

·         Hedge funds must have a hard time in 2013. Hedging against a rising market is a fool’s game. Another article.

·         In 50 years, the $10,000 investment will grow to $1,170,000 assuming a 10% return a year. However, about $700,000 will be the cost of the typical mutual fund. It will be better to buy an ETF (far lower fee) and avoid market plunges described in this book.  

The silly Modern Portfolio Theory

Most fund managers learn modern portfolio theory from colleges. The theories are faulted. However, some gained Nobel prizes using the faulted theories - a bad reflection on today's silly Nobel Prize committee not to mention the silly award to President Obama for doing nothing but reckless spending. They do not invest with real money. I and many others have proved them wrong many times.

Walking randomly in the stock market postulates the price of a stock is already built-in, so there is no need to evaluate stocks. It is also known as the efficient-market hypothesis. Explain to me why as a group my stocks with high scores always beat my stocks with low scores for years. If you cannot find a functional scoring system, it does not mean all the scoring systems do not work. For the same reason, there is no need to take college courses to evaluate stocks if the prices are built-in.

When the professor writes equations on the board, he is dreaming and his fantasy world will never resemble reality. However, you need to waste time to ‘learn’ in order to get good grades. Without good grades from a prestigious college, you cannot get a good job.

The so-called modern portfolio theory is most likely based on wrong or insufficient testing parameters / assumptions. Unfortunately they're still supported by the Ivory Towers. All the students taking these courses should ask for refunds from these universities. Most likely these professors are still driving an old Toyota and have never made good money in the stock market besides in 'teaching', selling 'books' and/or running hedge funds to cheat you out of your money.

I’m still waiting for the counter arguments to prove me wrong. Professors, please drop me a line to defend yourself. So far, there is none.


Efficient-market hypothesis: