Sunday, August 20, 2017

Bashers & Apostles

There are many arguments from Chinese bashers and Chinese apostles. My observations are based on facts not biases or political viewpoints (no one pays me anything).

The art of copying is not that easy. Otherwise, India would be far advanced than China as they're far better economically in the 50s, many technical folks...

It is a stage that most (if not all) developed countries went thru. The recent examples are Japan and S. Korea. They did copy and produced products of very poor quality. Even US copied in the colonial days. That's why Dickens was furious on us.

The best way to move ahead is copying (and sometimes stealing). If we have important stuffs, we need to PROTECT them. Both sides are guilty. When I was in some poor countries, many folks tried to cheat me every day. One dollar means the wage for a day for them. I do not blame them, do you?
China is more innovative than most Chinese bashers think. China captures the consumer drone market, HSR... The subways in all Tier I cities are cleaner and technically advanced than most Tier I cities in the US. Check out my blog on Shenzhen.
http://bit.ly/2wJ0d09

We need to face reality, learn the lessons... Otherwise we will be left behind as China did by ignoring the Industrial Revolution.

Great for a busiess case in Harvard

Usually I stay away from retail stocks including the rising Amazon. There are several stupid management actions recently.

* I expected Coach and some luxurious retailers would have a tough time. Partly due to the falling Chinese economy. Partly due to not understand their own market. Chinese buy a lot of these stuffs. If you do not believe me, go to these stores in NYC, Paris..., you can see them buying a lot to avoid paying tariff and help them to boost their social standing.

When they take out the logo, they make their products not sellable to Chinese as many Chinese (esp. those to be impressed) do not know English well.

* Costco was sued. If you look at the marketing departments of most big companies, you can see many good-looking young kids. Most do not have common sense and lack of experience. At least hire a good one to manage them and in this case it is logical to be sued.

Are EVs ready?

How many miles you have to drive to break even with the extra cost for an EV car? Not mention the trouble in finding charging stations (say on vacations).

China & Japan switch positions to be #1 buyer of our debts

We are borrowers, not lenders. If there are better places than the US to invest the excess money, China should do else where. To maintain a strong USD is good for China as the loan will be paid back in USD.

China has excess trade deficits for years to be recycled. One way is to buy our properties and companies such as OPEC and Japan did (still doing). It is silly that we stop China to buy our companies and steer them to buy companies in Europe.

It they withdraw, we will have no more easy money and it would crash the economy and the stock market. China does not want to kill the goose that lays the golden eggs. When the goose becomes too skinny, it would be the time to slaughter it to get what's left.

We should not reduce our resources by policing the world. Investing in infrastructure is better than consuming such as the war expenses. China is doing the opposite in investing in their economy. The reason could be one is run by lawyers and the other by engineers.

Xian

I was in Xian decades ago. The tourist guide told us that KFC wanted to pay MORE local taxes if they prevented MacDonald's (or may be Donald) to set up stores there.

Xian is the major big city and the destination for the Silk Road. It is the largest walled city I've ever seen. It is also the tourist city for the first emperor of China. I suspect many changes in the last 15 years and more in the next 5 years. They still have a huge underground palace (i.e. tomb) more than 2,000 years to be unearthed. Hope they unearth it before my time.

Fake

The sign from a tourist store in a Turkish island said: "All stuffs are genuine fakes".

Do not buy anything that are not genuine fakes. However, some fakes are better than others and some fakes are actually better than the real ones. Some fakes are made in the factories producing the real ones. 

One of my friends (hope he is not reading this post) has a fake Ph.D. certificate from a mail order school. It costs $9.99 for the certificate but $100 more for the glass frame. With this he can teach in some college. Should you ask for a refund from the college he teaches?

The Fed

At most it would be .5% rate hike from now to the end of the year I guess. So, nothing has changed.

The Fed Reserve Bank has a simple job: Adjust the interest rate so the market is not over-heated or under-heated. You do not need to pay tons of money for making this simple decision and a $5 simple program (written by me) will do.

The Fed is not God. Remember the chairman said the economy was good and after a few months the market crashed - he had the gut to write a book on his own mistake. Come on!

How to solve a problem

When it does not work, abandon it. Trump is doing that and Yahoo!Finance is doing that too (I missed many useful features used to be available from this web site).

Americans used to be fixers but now are problem avoiders. Sigh.

Interest hike

It is great for fixed income retirees to raise it to 3% (the average inflation rate). But, it is bad for business (easy money to finance projects) / house builders. The market may crash due to our record-high margin debts.

That's why we have market cycles. When it goes to extreme, the market will react (crash in many cases). The Fed does not want to crash the market.

Two lovers

My love to China is natural and my love for the US is practical. Who said you cannot have two lovers?

We literally vote with our feet. That's why US have so many immigrants. Without them, the country will not be that great.

Hong Kong has many immigrants due to its increasing wealth. Many from the first generation speak Cantonese (very few decades ago). When you pay about half a million for a 500 sq. feet apartment, it is not a nice place to live. I came here for college at the time more colleges were starting.

There are many immigrants today to China (few decades ago). Many learn to speak Chinese. When I asked about immigration to India, folks laughed at me.

Theaters good investment?

I bet otherwise. Our homes are the best theaters unless you're horny teenagers.

Why Chinese buy American theaters?  The average Chinese home is small. It works in China but not in the US.

Are small stocks better?

After a research, small stocks were better and then they lost its lead to large stocks. Recently it regains the lead.

What I try to say is stocks in market caps, sectors... are in cycle. If there will be a fierce correction, stay away from small stocks;they would plunge more during corrections.

How to handle 40 virgins without dying from happiness

The terrorists think they have 40 virgins in the next life. No one mentions the quality.I try my best to escape from some virgins who are not attractive to me even for my low standard.

History writing

History is written to what the readers want. The British side of American independence is different from ours. Some high Japanese officials still think Nanjing massacre did not exit. They thought the Chinese built a fake museum with fake photos. They also think their citizens do not read foreign books and/or have no access to the internet.

Oil price

It is Supply and Demand at work.

When we have more demand, we increase the supply and vice versa to keep it in balance.

Today, supply is more than demand, so we cut down exploring, drilling... Hence supply will be less in the future. Oil is more competitive now and will be until the supply is reduced.

There are many other factors such as OPEC needs cash to continue their on-going projects that have been planned a while ago. I believe a market correction and economic correction are coming. Hence I unloaded some oil at $50 and that I bought at $30.

Friday, August 18, 2017

On Buffett's huge donation

He is the camel that goes thru the needle. Donating appreciated stocks gets the biggest bang. Those who accuse him to benefit from the donation should get their brains fixed if they have one.

Barcelona




There is another terrorist attack. I have been to Barcelona twice. It is one of the most beautiful cities I have visited. I have strong feelings with the city and her citizens. I prefer to respect each other’s religion and culture. Why not live in peace? Please give peace a chance. Out of fears and frustration and against my peaceful character, I recommend the following.

1.       Spain should bomb ISIS HQs that may be dispersed. The French did and It would discourage them for the next terrorist attack. I usually do not advocate violence against violence, but do we have a better choice?

2.       That led me to another idea: In WW2, Japan surrounded due to the two atomic bombs. Customize a small one and threaten ISIS with it. I hope it will be used as a threat, not really deploying it. Every time they open their big months, we show them how we load the bomb to our jet and submarine.

3.       We should end our involvement in the Middle East conflicts. They will never be fixed as the Bible said. From the last a thousand years, it will continue in the next thousand years.
          We should not supply our jets and bombs to destroy their countries from the start. Crusade and modern Crusade (arguable to many) are both wrong. Where in any religious books teach us to kill?

4.       No more immigrants from these areas. Japan and Poland do not have terrorist attacks from these foreigners and they have virtually zero immigrants from these countries.

5.       Think like a terrorist would think to check their next easy targets.

6.       Convince them there is no after life and no 40 virgins waiting for them. If there is one, the Chinese ghost and the ghost from the west would be the same.

7.       Take more actions. Many terrorists have been identified and monitored but no actions. More vehicle barriers should be installed.  I advocate profiling for terrorists and deporting them.

Sunday, August 13, 2017

Warm water good

*Warm Water and Cold Water*
*MEDICAL ALERT*
PLEASE SHARE THIS WITH FAMILY AND FRIENDS. IT MAY SAVE SOMEONE'S LIFE. Thanks. Stay blessed.
Dr.JUSTIN
Health & Wealth
+919566874995

*BENEFITS OF WARM WATER 👉👉👉*
A group of Japanese Doctors confirmed that warm water is 💯 % effective in resolving some health problems👇, including:
Headache, migraine, high blood pressure, low blood pressure, pain of joints, sudden increasing and decreasing of heartbeat, Epilepsy, increasing level of cholesterol, cough, bodily discomfort, golu pain, asthma, hooping cough, blockage of veins, diseases related to uterus & urine, stomach problems, poor appetite, also all related diseases to the eyes, ear & throat.

*HOW TO USE WARM WATER*
Get up early in the morning and drink approximately 4 glasses of warm water when the stomach is empty. Do not eat anything 45 minutes thereafter.
You may not be able to make 4 glasses at the beginning, but slowly you will.
The warm water therapy will resolve many health issues within a reasonable period:
👉 Diabetes in 30 days
👉 Blood pressure in 30 days
👉 Stomach related issues in 10 days
👉 All types of cancer in 9 months
👉 Blockage of veins in 6 months
👉 Lack of hunger (Poor appetite?) in 10 days
👉 Uterus and related diseases in 10 days
👉 Nose, Ear & Throat problems in 10 days.
👉 Women problems(?) in 15 days,
👉 Heart diseases in 30 days
👉 Headache/Migraine in 3 days
👉 Low blood pressure in 30 days.
👉 Cholesterol in 4 months
👉 Epilepsy and paralysis continously in 9 months
👉 Asthma in 4 months.

 *COLD (hot water too from Tony) WATER (esp. soda from Tony) IS BAD FOR YOU*
🌻In the past, people used to say that if cold water does not affect you at a young age, it will harm you in old age👇
👉 Cold water closes 4 veins of the ♥️ heart and causes heart attack 💔; Cold drinks are the main reason for Heart Attacks.
👉 Cold water💦 creates problems in the liver; makes fat stick within the liver. Most of the people waiting for the transplant of liver are victims of cold water drinking.
👉cold water affects the internal walls of the stomach.
👉cold water affects the stomach and big intestine and results in cancer.
*Please don't keep this to yourself, tell someone to tell someone*

-----
Tony: Information only and consult your doctor first.

Basher or apostle



There are Chinese cheer leaders (or apostles to some) and Chinese bashers. Obviously Thomas Friedman is a cheer leader. Google his articles such as this one.  Every country has her problems and China is no exception.

Saturday, August 12, 2017

Boeing

I sold BA recently for the following reasons.

Forget all the metrics and look at the future on simple factors.

1. Are the new planes (most profitable ones) selling to make a big difference? I'm talking actual sales, not a position in the queue.

2. Are they still selling old planes that are not profit makers?

3. Is the world buying their planes - many factors such as global economy? The rising population could mean nothing if they happen in poor countries. China is a factor. However, their HSR (high speed rail) would replace most short routes (within 240 miles).

4. Competition with Air Bus. Despite the recent rise, the weak (compared to USD) Euro helps them to sell more Air Buses.

China & Taiwan

Both sides claim China are theirs. At least one time Chiang prepared his army and proclaimed "regain China". Today more Taiwanese were born in Taiwan than in China.

The points are:

1. One China.
2. China will be reunited into one like Vietnam, Germany...
3. If it does, it is a civil war. Hence, US should not participate - have we learned from Vietnam?

BTW. The first mission of the carrier is for this purpose to me. The fighter jets cannot make the round trips today and they do not have the refueling capacity for the invasion (or reuniting depending on your point of view).

The fat boy

The fat boy from N. Korea is a paper tiger. How come all the N.Koreans are so skinny except this fat boy and the fat lady news anchor?

If they think they are the only country who has Fat Boy, think again. If he used his weapon, there will be no N.Korea on the map the next day. We should implement how to shoot down multiple warheads.

US is playing China card against N.Korea.

China is neutral if US attacks N.Korea. For the same reason, China expects the US to be neutral when they invade (or reunite with depending on your view) Taiwan. The stock market did not react too adversely so far. The war with China is a very different story.

China has given N.Korea too much aid. I bet some missile technology and support may be from China.

Currently, China is the beneficiary in this incident.


---
Update 8/14/2017. The market only lost 1% last week, so the incident does not do much to the market so far.

Friday, August 11, 2017

Daily walk





Geopolitical crisis



Many times no action is the best action. It applies here.  I had my experience in selling too many stocks via stops in 911. The market returned in a few days and I did not buy them back.

An analysis from Ned David Research covers 51 events from 1900 to 2014. My interpretation for actions: Trade the affected sector (via sector ETF) in the first few days and reverse the trade 2 months after. Many times it means the oil price and gold price would rise.

I bought SH (a contra ETF to SPY) in August, 2017 as August and September are statistically the worst months in addition to the high risk in the current market.  It is expected to be sold in Nov. 1. The North Korea crisis did not do much to the market on the first day but the market (S&P 500) lost 1.45% and the risky NASDAQ lost 2.13% (see my blog on FAANG) on the second day.
                                                                                          
Caveat. Need to understand the crisis. If it would lead to World War 3, most sectors will not recover for a long while. Again, there is no sure thing in investing otherwise there would be no poor folks. However, educated guesses should materialize more often than not.