Macau casinos

When you make or lose money in these stocks, it's your own business. Just recheck the result in 2 years. I equate the same excitement when every one flocked into the rare earth miners. I do not feel the return is good after calculating the risk even the stocks are rising. Every one calculates differently. I respect yours and I never say I'm 100% right.

There are no whales (big gamblers) in the right mind in Macau. Why? The anti-corruption agency is watching there and taking pictures. I do not know whether they're really there, but I can see the results. Unless the whale is dying and losing her mind, she will not swim to Macau for prosecution. No small whales will come if the money is from corruption.

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Many negatives to my comment but one positive one by Pat:

Too bad debt service must be repaid. Wynn has $10 billion in debt. The equity value just isn't there. Encore is very nice, but added nothing other than more debt. Wynn again has cannibalized himself in Macau with the Palace. Too much competition. This is one to avoid for the next year. Tony Pow is right.

Trade treaties

All trade treaties try to exclude some countries. Some trade treaties include other clauses such as protection of intelligence properties, worker conditions, carbon emission... that do not make sense to some developing countries.

NAFTA excludes all countries except US, Mexico and Canada. I believe US has a deficit with Mexico and Canada should gain when the pipe line is built. EU has the favorable trade treaties between the members. TPP tries to exclude China. TTP will be replaced by similar treaties for the Asian region including China and Australia.Free trade is good when all participants play the game fairly such as product dumping and other barriers as implemented by China.

China will be next for Trump and it is more complicated than Mexico. The trade war will force China to take counter actions that will not be good for the US. I believe we will lose more than we will gain.We really have to give up some labor-extensive products. A $50 wage will never compete with $2 wage which in turn cannot compete with a 20 cent wage.

Decrease in global trade

https://mishtalk.com/2017/01/27/whats-behind-the-collapse-in-exports/#comment-85718

Mexican farmers

I worked in the farm briefly during my college year. All I saw were Mexicans. I made enough money for a Swedish buffet and that was my career end in farming. We piled up the chicken bones and became a soda machine ourselves (drinking too much soda). Now I feel sorry for the restaurant owner.

Facebook propsed security system

How many care about the security using Facebook? If you have important data such as your DOB, you should not make them public in FB or other similar media. Extra security reduces the usability of the product. The techies want to show off ignoring what the user really wants.

At one time, before they accepted my new posts in FB, they asked me to check all the pictures related to a topic (using a tiger for illustration). When they displayed two tigers, I did not check it as they asked for one tiger. They told me I was wrong.They should hire at least high school graduates, or it shows the problem of our high school system.

America first

Free trade is good if all participants play fairly.

Our trade agreement with Mexico and Canada is STUPID. It encourages the labor-extensive jobs to move to Mexico such as auto assembly. The import from Mexico does not help our consumers a lot.

China is a different story. The low-cost stuffs help our consumers. However, we have to make sure they do not dump the products we have not given up and ensure they do not set up barriers to our products. China will agree for we should cut the trade deficit by half.

Brits have nothing to offer as we manufacture similar products. We're the competitors rather than traders.

Jobs, jobs...

Time changes and so are our needs of the society.

Today we do not need low-wage workers as we have too many. We need skillful workers such as the designers of mobile phones... For proofs, just take a tour in any tech tech companies and you will find many workers are immigrants of Chinese, Indians... and their children.

We should give up the labor-extensive jobs as most will be replaced by robots and countries with lower wages than China (whose wages are rising).

Clinton's Job Initiatives has more holes than my Swiss cheese.

A great comment by Ripton Johnson

I am a 41 year Patriots fan. Looking back, there are a lot of things Belichick has done that has changed the Patriots and the NFL. I remember the first SB under Belichick in 2002. He was the first Coach to have his entire team come out unto the field as a team in the SB. Before that they would come out one player at a time. Example: They would announce, The #1 Draft choice in year so and so QB, So and so. The two time Offensive MVP so and so all coming out individually. Go back and check any tape of the SB prior to 2002 and you will see the difference.

Under the Patriots and Belichack, there are no Prima Donnas. WR's especially tends to be Prima Donnas. It does not happen with the Patriots since Belichick. You buy into the Patriots way or you leave. I think one of the things Belichick looks for is versatility in any player. I think when you interview with Bill, he askes. What position do you play? Response = QB. Can you do anything else? No. Sorry we can't use you. First example was Troy Brown. He played Offense, Defense and Special Teams. Edeleman today is the same. That is one of the reasons they are able to move players around when there is an injury and never seem to skip a beat. You will notice all their players blocking including Brady on accosions. In the last game of the 2016 season against Miami, Michael Floyd in his first game had an excellent block to spring Edelman for a TD.

The Patriots do not over pay their players. You have to earn your keep. Belichick also has a skill of detecting talents. So many of other teams garbage becomes Patriots Gold. Example: Chris Hogan this past Sunday in the AFC Championship game. The overwhelming majority of Patriots players are not known to the rest of the NFL fans. No one (Except Patriots fans) knew of Malcolm Butler before his INT in Super Bowl XLIX. He was undrafted for a base salary and now is one of the top five corners in the NFL. Belichick also knows when you have overstayed your welcome or no longer fits the program. This year after he traded Jamie Collins, everyone thought the Patriots would crumple. They are playing for their 7th SB title without him. Wilfork a mainstay for years, Richard seymour, Lawyer Malloy just to name a few. They still continued to win. Belichick runs a tight ship and does not put up with BS. Jonas Gray ran for 201 yards and four TD's against the Colts in 2014. He missed practice the following Saturday and was cut from the team, Reggie Wayne got cut that day too. They still won SB XLIX without Gray.

In Belichick we Trust. Go Patriots. You have no honor if you are not a Patriot..

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More football (or Pats) related links:




Common mistake

AFC Championship. Correctly predicted.

Tom Brady

Bill is boring

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Trumpology

Investing & Politics

Market timing that works

Best Gifts that truly gift forever

Pats' greatest achievements

The Pats routinely turns the garbage, the unknown, the rejected into gold.

Brady - a 6th round pick for QB.

Hogan - unknown & undrafted. Was cut several times.

Butler - unknown & undrafted.

and many, many more.

Bill could be the best investor of our generation.

On today's financial news

* Do we have to build a wall in the Canadian border too? When we build the Mexican part, do we hire Mexicans or illegals? Americans will be happier just receiving the generous welfare instead of working in the harsh conditions.

* Energy stocks still have a long way to go up I hope. The next catalyst is the economy which does not look good.

* Why EU countries suffer from pollution? I thought most of their manufacturing are moved to China. There will not be a EU when Italy and Spain exit.

* I need the screens on the airlines esp. traveling across continents. My mobile devices have too little memory to hold movies - my fault.

* How to fix the conflict of interest when these selected heads are holding a lot of their x-companies' stocks/options?

* To Buffett and dividend lovers: Stay away from KO. Sugar and their replacements kill. Unlimited fountain reduces your life by 10% from my estimate.

They should replace French fries with American baked potato or salad, and soda with coffee, OJ (not the criminal), spring water or milk. Best tips to their fast food CEOs but worst tips to hospital CEOs.

What is the common mistake of all opposing coaches

They prepare the upcoming game based on the last performance (strengths and weaknesses) of the Pats. Bill and Tom routinely use the last hero as the decoy and select another player (or strategy) as the next hero.  Even Lewis scoring 3 TDs by running in the previous game, he was the decoy and Hogan was the new hero.

Alternative fact (one step above fake news): Falcon couch (not a typo) paid me millions to find Pats' weaknesses. Beside the above, I suggest to pull the fire alarm in the hotel where Pats stay at the right time. The Fire-Gate will be born. :)

More football (or Pats) related links:

AFC Championship. Correctly predicted.

Tom Brady

Bill is boring

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Trumpology

Investing & Politics

Market timing that works

Best Gifts that truly gift forever

TPP, AIIB, AMZN

* TPP is supposed to stop China's export by the USA and is a counter measure to AIIB (its primary aim is financing infrastructure projects). Now, it is heading to the opposite direction. Very costly to reverse the previous efforts of a different political party.

* Amazon's revenue is more than the next 10 retailers combined even with very slim profits. However, I see the 4th wave in retailing is coming when I see many happy consumers stuffing their carts with cheap and good stuffs such as Primark.

eBook from Amazon could be more than 90% of the market share It offers many tools from providing a cover design to marketing. I do not see any other company can compete. Every one can publish a book without spending a penny.

I prefer boring folks

After the win, Bill gave the same boring and predictable speech in mono tone and without extra movement of any of his facial muscles . The contrasts are the presentable x-CEO of Penny, the best-seller who advised us to leave the market in 2009 and now Trump (wait for a year for the results).

Do we want to be led by a boring guy with good results? I do not know about you, but I sincerely do.

On drug price gulging

There are always two sides of a story.

1. Those who acquire a drug company and double the price should be sent to jail. That young kid's ego does not let his big mouth shut, so he is the stupidest CEO.

2. If we do not give the drug companies reasonable returns, we will not have research for better drugs. Remember: Not all drugs are successful and drug research is very expensive.

Joke of the day

Biden is taking the train back home. He may be feeling isolated and hungry (not invited for lunch). Can we see him in the unemployment line with thousands of his former co-workers? Some may be lined up for jobs from the companies they gave favor to.

Trumpology (my silly term)

I'm politically neutral and tend to argue against the current government's mis governance. I expect a lot of protests during the inauguration. Hopefully all would be peaceful. Give peace a chance and also at least a short honeymoon period for Trump.

Usually I am against the unfilled promises of politicians. This time I take a different stance as some of Trump's ideas are just not practical. Here are my points and I add solutions to some.

1. ObamaCare. It shifts too much burden from the low class to the middle class. I hope it will be enhanced and not taking it out - a very expensive process. Using "Obama" is a mistake to start with.

We should consider how to pay for it first and how to reduce the costs as described in my blog.

2. We need to abandon some labor-extensive jobs. A $20 wage can never compete with a $2 wage. We cannot blame China on this as many of these jobs are being moved to countries with lower wages.

3. No need to build the border wall. How hard to dig a 10-feet tunnel? Just punish employers hiring illegals. The fines from the employers are incomes as opposed expenses in building the two walls (one in Mexico and one in Canada). The Mexicans will pay for the wall if we give them double the money under the table (has been done many, many times).

However, illegals are taking jobs even the able welfare recipients do not take. We need to encourage folks to work.

4. We cannot borrow money and raise our national debt irresponsibly forever. It will reduce our competitive edge. Have we learned anything from Greece?

5. Climate change has two opposing theories. However, it is better to trust the damage of pollution than not.

6. We need to end the wars and not to start another one. With the endless wars, we can never balance our budget. We have too many problems to fix at home.

7. China, Russia and the US are three powers that should work together than confront with each other. The global economies have been integrated better than ever. Free trade has more advantages when all participants play fairly.

All countries to some extent are currency manipulators and protectionists including the US.

Today, China does not want to be the global leader/bully or "Ba" in Chinese. We can make China a friend or a foe.

8. How will Trump finance the infrastructure projects? Our national debt is over 100% of our GDP and revenue will be reduced via the proposed tax cuts.

9. The proposed 45% tariff would drive the world including the US into a depression. Click here for my opinions.


Related article: Risk wars with China.

USPS

ALL (not a typo) government departments/agencies are not run efficiently.

If USPS were good, they would not lose their jobs to UPS. Many stupid defenses for them and I bet they are written by their officers.

It is the same as countries such as India and utilities. With protectionism, you lose your competitive edge.When they raise the postage again, you will not receive a X'mas card from me.

If USPS were run as a business, it will make money even with a 39 cent stamp. Specifically,

1. Reduce losses in unprofitable operations, such as requiring self pick up in remote areas.

2. Pay the employees what the market pays. What are UPS salaries for similar jobs?

3. Protect profitable operations - shipping parcels for Amazon for example. UPS eats their cakes.

I can come out what some basics without even thinking. The decision makers there must be sleeping too much. They think it is a protected agency and why they want to change anything which could affect their generous pensions paid by us!

Today's financial news

* South Korea was the other non-corrupted country besides Japan - Hong Kong is not counted.

* Is HSBC leading the multi national corporations to move their HQs from Britain?* As stated, all countries are currency manipulators.

* From my view, Obama is a great communicator and Regan is the other one I can think of. I like Michelle a lot. Obama saved the stock market at the expense of the national debt. Not great in handling global affairs. ObamaCare will fail due to shifting too much burden to the middle class. I'm glad that we have a black (actually half black) leader.

* Trump does not have a honeymoon period and he could be the only one.

* I stay away from casino stocks. They have too many debts and the China's policy of suppressing corruption changes the Macau's profit potential - hope someone had taken my advise at the time. China should look at the rich kids buying expensive cars with cash.

Today's financial news

* Is Britain setting up a precedent for other EU countries - leaving some co-operating and some not?

* Oil price moves short-term by traders and long-term by fundamentalists which I'm one.

* ObamaCare fails because it moves too much burden from low class to middle class.

* We used to play China card against Russia. Most likely China will play Russia card against us. The trade between them is mutually beneficial besides the proximity.

* The eye glass industry merges so they can monopolize the high-end market. Are the regulators blind?

* China AI is important due to the hardship to input Chinese characters - there is no Chinese alphabet. However, I see many can input very fast on their phones.

* Not surprising President Xi is in the forum. He may preach his "One Belt, One Road" project.http://bit.ly/2iwhW6o

Risk of war with China.

I read several articles why we want a war with China. Many arguments are not valid. I summarize here with my own arguments.

# China is a communist country

China is ruled by a party with handful of decision-makers. It is more capitalist than us: When you do not work, you die. Every political system has its strengths and weaknesses. When they do not harm us, we should leave them alone. Is the current Vietnam a threat to the world peace today?

Our major strength is our Constitution, which leads us to transfer the power without bloodshed. Our major weakness is a bi-political system but it is also a strength too. If our president and the majority of the Congress do not belong to the same party, we are wasting time in arguing who is on top. I prefer our system over China. I despise communism as it makes her citizens lazy – why you want to work harder when everyone is paid the same?

# No freedom in China

However, comparing to 30 years ago, freedom grows by leaps and bounds in China. At that time no one wanted to speak anything bad against the government. As long as China is heading to the right direction, it is fine with me.

There are many countries having even worse record on human rights than China, should we send soldiers to ‘liberate’ them? Freedom takes a back seat to food, shelter and clothes. “Live free without food” is a fool’s game.

# What is the intention of China’s rising military spending

Should we ask the same question ourselves to our own government? We do not know their actual spending, but our military budget is more than the next five countries combined. Our missiles can wipe out the entire world with a press of the button. Our weapons are the most advanced with jet fighters and jet carriers with dual nuclear generators.

# We need to liberate the suffering of Tibetans & other minorities

Should we ‘liberate’ the blacks and the Red Indians first? Check out Detroit or any Indian reservation. Except the suppression of Tibetan monks a long while ago, China gives more to Tibetans than she receives and they never have the ‘one-child policy’. In the days before the ‘liberation’, only monks can get an education. Every city I went in Western China, Chinese preserve their cultures.

According to a survey, Chinese netizens are more pro America than China. They’re not completely correct as most do not understand American politics. Most countries have their own problems. Let them fix their own problems.

# China is rising

Why we have to suppress others from passing us? Actually they have a long way to pass us. Should we risk wars with Europe when they’re rising? Does the dying patient care about whether a life-saving drug is from China? Do you prefer a rising China or a nation of 3.5 billion begging for money?

Our leaders want to be #1 and China has never claimed to be so. Our military generals and the CEOs of offense corporations want us to go to war with any country in order to protect their interests or to hide their inability to fix our problems.

# China is aggressor

Throughout history China has been more a victim than an aggressor especially in the last 300 years.

Taiwan’s Chiang at one time wanted to conquer China to recover the lost kingdom. In a way, he acknowledged Taiwan was part of China. If there is a war between China and Taiwan, it would be a civil war.

The islet disputes in China Sea should be settled diplomatically. Recently the president of Philippines toned it down after receiving billions of loans from China. 

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This is a chapter from my book "Can China Say No?". Click here for more info.

Patriots will win the AFC Championship

It is based on educated guesses that follow. It is just a prediction. As in investing, nothing is 100% sure.

1. Texans is a wake-up call. They know they cannot win any championship with that kind of performance.

2. Patriots has home-court advantage. Tom does not have to waste time to find the closest men room. At 39, Tom knows it could be his last chance to go to the Super Bowl.

3. The opposing team has about 2 days less to prepare. In addition, they already had a tough time with the Chiefs.

4. The opposing coach will give the a-holes more incentive to shut up his dirty mouth.

5. The opposing coach will use Texans' tricks to put pressure on Brady, but the same trick will not work two times in a row. I have to say Pats have a good system and two decades of successes.

6. The Pats have not used their secret weapons yet - keep them secret for now. Well, the Pats have to use two guards to contain Bell and it is an open secret.

Wealth gap

Our wealth gap is widened due to the rising stock market since 2008. The rich (Trump...) should help the poor via taxes and donations. I do not mean more taxes but the rich should not hide their incomes to avoid taxes. The government should spend money in profitable projects such as infrastructure and adequate welfare.

The government should:

1. Prosecute the welfare cheaters.

2. Help the addicts to get rid of their bad habits instead of legalizing drugs.

3. Reform the welfare system.

4. Retrain workers. A tough job with globalization and robots.

5. Encourage folks to work, not taking the subsidies out when they find a job.

6. Cut down government expenses via a small and efficient government.

7. Do not be the global policeman. Being #1 is not the primary concern for most citizens. We have more problems to fix at home - look at Detroit.

I'm an outsider. They are simple ideas but they may be very hard to implement.

Stupid folks do stupid things

The guy paid his tax bill of $3,000 with pennies.

We have a good laugh. However, most (not all) government employees are not working much. I used to work for Federal Reserve Bank, so I know more. Hence, it is good for them to kill time and they're stupid enough not to use counting machines claiming they were broken. Stupid folks do stupid things. Well, at least they have excuse to hire one more employee and cut down unemployment by one (or one in every county). That's how we fix unemployment problem, or it is my joke of the week.

Today's financial news

* All countries are currency manipulators.

* Trump's factor. Down: drug companies, auto, Walmart, China, Mexico, poor folks... Up: infrastructure. Also down and out : CNN. I missed Biden already even I do not belong to any party.

When the trade war materializes, I expect the market will fall big time and will all positive statistics gone.

* Most game consoles use AMD's CPU for the price and performance.

* China still has 500B+ trade gain. Not bad. They will spend a lot in their One Belt, One Road project.
http://bit.ly/2iwhW6o

Football & Investing

Nothing I have not heard or predicted from Trump's speech. But, this weekend, football will be great.

Similar to investing, the Patriots should beat the Texans on paper. But games are not played on paper. I guess Tom's greatness has 3 (more on the second read) convincing reasons.

1. He is the sixth-round pick for QB. In a Chinese saying, the last orange picked in a big barrel. He has something to prove. In our term, an underdog stock.

2. He has good teachers. He never wants to say bad things about his opposing team but studying them to avoid their strengths and take advantage of their weaknesses. Quite true in investing.

3. He has support. His rich wife allows him to ask for one penny salary so they can hire good supporting team to give him more time to throw and better catchers. He knows a champion ring worths a lot for his commercials. A rising market makes everyone a genius.

4. Some luck. Without the injury of his precedent, he could be still sitting on the cold bench feeling sorry for himself. It must be counted as the last reason for his success like most successful investors.

5. Be nice and generous. Excessive money is good to help others. Same for many rich folks here.

6. I forgot but I know I had a point for his next reason. Must be the old timer's disease. Will update it when it comes back. It comes back now: his hard work and it is same for investing.

This is my first draft and it seems a good way to end a easy day and look forward to the football weekend for a change of this unhappy world.

Trump & Iceland - not related

* Trump factor could be the most important predictor for the market this year and next year. I'm talking about his proposed 45% tariff.

I cannot see how it is possible to separate insider information from his businesses. If it does not apply to the president, then he and his family will be the richest family in the world past and future. I witnessed how T.V. Sung was the richest guy with his connection from the late Taiwan president Chiang Kai Shek.

* Iceland is a good example of my Coconut Theory. The folks wanted to cut down coconut trees (their financial asset) to make canoes (building global banks) to catch more fishes (more financial operations), but they forgot there were few fishes (financial operations after Swiss, Caribbean islands...) in the water there.

Representation without taxation?

When you have 40% of the citizens do not pay Federal income tax and 50% of the able adult not working and the politicians' objective is seeking votes, which side s/he is in?

Pretty lady

The pretty lady was raped when she jogged in the middle of the night in high crime area. Who are guilty? Both but one should go to jail. The lady is guilty for not protecting herself.

The reason for my example of "pretty lady" is that I was frustrated that Cisco let others steal their technology. At that time I had heavy bets on Cisco as stated in my SA article Amazing Returns.

I misled folks for my pro China attitude in the above example. I'm pro investing first, US second and China third... always except when China plays American football with the US.

BTW. The Chinese netizens are more pro US than China in a survey that was banned the next day. They're right in some ways but wrong in others as most do not really understand US politics. To summarize, all systems have the strengths and weaknesses to me. I prefer US system more. The US system's major strength is the Constitution and the major weakness is both parties are always arguing instead of JUST DO IT.

Bias

For those who bad mouths my book without reading it: The following comments were written by Andrew McElroy, who writes articles on sector rotation. I did not know him and he paid full price for my book Sector Rotation.

"Great stuff, Tony. It's great to meet experienced traders such as yourself.
I had a browse through the book and think your method is a little more refined than mine.

On the next day, he said:
"Your strategy is very rules based and solid. I sometimes envy people who have developed something like this."

Obviously the biased judged my books by my last name and one even called me "Chinaman". I hope he is old. If so, I do not want to waste my breath to correct his bias and he has to bring it to his grave. Hope he will not pass his prejudice to the next generation.

I have seen many smart and successful folks ruined their careers by making racial remarks. They may get the prejudice from their parents. Watch out what we say during dinners with children around. Family education is most influencial, good or bad.

Silence is golden

AMAG had a bad day with about 25% plunge. I bought it on 5/2016 and still have 40% up after the plunge. Bio tech stocks are like that.

Financial news

* A lot of news from China:

The Chinese dollar should rise against the USD this year as it has fallen too much and I'm sure China will take action to prevent further plunge.

When I was in Xian years ago, the tourist guide told us KFC asked the city for more taxes and in return stopping MCD from coming in.

Most movie stars (used to be big one time) do not participate in blockbusters due to the black list in China, which is predicted to be #1 in global movie revenues soon. Money talks, like it or not.

* I sold most of my airline holdings except Alaska expecting oil prices will rebound. The biggest risk for global markets is Trump's 45% tariff (even 25%) besides strong USD and interest rate.

A bigger fool

If I told my CEO how I would cut down the loss of 10 millions to 0 loss by abandoning the losing projects, I would be shown the door. Who is the fool or bigger fool?

It does happen many times in real life. Anyone had the gut earlier to tell the CEO of the defunct DEC (the major mini computer company) or Dr. Wang to switch the energy to PC? 

A loser and a winner for every deal

The jobs gained are minimal esp. when robots are involved. Corporations move some jobs back to make you FEEL better and so is the silly TV series of "Make in America" and some Trump's ideas.

We create the middle class in Asia and they can afford to buy our high tech products, farm products, movies... A win-win situation.

For every deal there is a winner and a loser. The losers are those who lose their jobs to low-wage countries and do not have stocks on multi-national corporations.

On today's financial news

* The global economies are connected better than 20 years ago. When Trump imposes the 45% (even 25%) tariff, the world including the US will be in BIG trouble.

We've accused Chinese a lot. Most are not true. Steel dumping is true, but not military buildup (we should be accused of that) for example.Australia benefits with commodity prices (most export to China). India has the consistent problem. They cannot even copy a successful model from China by making a special zone with infrastructure.

* Dunk'in Donuts opened one in Seattle, the headquarter of Starbuck and failed. No one including Apple takes a business case seriously. If they read my $10 book, they would save millions minus $10. LOL.

* AMAG is among the 31 stocks recommended in my Best Stocks for 2017. Pure luck.

A broken record

Responding to an article on China.

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I would like to conclude from my perspective (either right or wrong to you).

* We have to give up the sectors we cannot possibly compete in such as manufacturing to low-wage countries. Do not blame China as some countries even have far, lower wages.

* Free trade works if every participant plays it fairly.

* The politicians' objective is to buy vote, not for the good of the country in the long term. When 50% of adults do not work and 40% do not pay Federal income tax, the politicians will side with them. Trump's 45% tariff will be a disaster to ALL countries.

* To make us competitive in other sectors, we need to invest in infrastructure, research... To finance them, we need not wasting in unproductive projects such as wars and the reckless foreign donations.

* Being number 1 is in the mind of our leaders, not the common citizens who want to have a good living standard and a good job. I hate to see our youths returned in body bags while they should enjoy the best of their lives. If we send the children of our leaders to the front line, we will not have any war.

China on today's news

A lot of news on China again. CES is a showcase for a lot of Chinese companies and a lot of them are from Shenzhen. If you have a new high-tech product including drones, you may want to assemble there as you can find most components across the street.

 

China do things once a time. When Mao said "Kill all mosquitoes", it was hell for mosquitoes. Hence the billions on air pollution is not empty talk.

 

The auto stocks may be at its peak now if Trump enforces the 45% (25% more realistic) tariff. Boeing would say good-bye to the trillion sales from China and promote the "buy one get one free" fire sales.

 

I was surprised Huawei was in CES when their stuffs were banned by the US government on national security. Most likely they stole the router spec from Cisco. However, they have the 4G LTE and Cisco does not have. The stealer is better than the stealee!

 

A trade war would start and it could start a military war as predicted in my book Can China Say No?

Best Stocks for 2017

This is my second book within 30 days. I must have no life.

The 31 stocks are more conservative than my previous picks. It is a risky market, so use stops.

Click here for the book Best Stocks for 2017.

Click here for "Can China say No?".

My best sellers are:
Complete the Art of Investing.
Sector Rotation: the 3rd Edition.
Momentum Investing.

One belt, one road

Chinese is building two modern silk roads, one by land and one by sea. It has been participated by more than 60 countries. It is a $3 trillion infrastructure campaign funded mostly by China. The idea is from President Xi and was initiated in 2013. There are multiple purposes:

·         Improve transportation of products and mineral resources between China and Europe.

·         It provides better market for Chinese products.

·         Enrich the wealth and living standards of the countries between the routes especially the developing countries especially with the reduced foreign aids from the US and the West.

·         Eventually China’s higher-value products will catch up with the West and the US. When the developing countries are richer, they are the candidates.

·         It could reduce some conflicts. Philippines received billions on the loan and has downplayed the islet conflict with China. The chance of Chinese military interference would be reduced.

·         China’s Yuan could be used as the reserve currency instead of USD.

·         Improve China’s political and cultural influences in these countries.

·         China needs their energy supply, natural resources, trade and road to Europe.

·         Most infrastructure products are financed by China and built with Chinese management and technologies, hence using China’s excess capacity such as building roads and bridges.

Many developing countries will be benefited by financing their projects via Asian Infrastructure Investment Bank (AIIB), which is mainly funded by China. China may supply most of their services such as building factories or improving ports. However, China will not see their profits from the investments in the short term. Some loans will be partly donated to friendly allies.

US is not participating in this campaign. We will not benefit from these agreements and we will lose our influences to the developing countries. However, some big projects require advanced technologies and they will be supplied by US corporations such as turbines from GE. Honeywell and Caterpillar will likely benefit. India may not participate due to the claimed territory thru Pakistan.

As in most projects, China will face problems and challenges. Thailand and Indonesia are modifying their original railroad projects. The project is easily accepted in developing countries but not in developed countries such as EU. China is having its own economic problems. Some projects may not pay back and China would end up losing money. China needs to analyze the projects carefully. China has to settle the islet disputes in South and SE China Sea. The natural resource prices are lower than 3 years ago.

It is better to invest in profitable infrastructure projects than selling destructive weapons. Many finished projects such as the major railway in Africa do not benefit China and even the host so far. They need to select those projects that are beneficial otherwise it would be a waste of resources. A train started from a Chinese city to arrive in London and another one to Madrid. In general, it is faster than sea route and less expensive than air fright. Or, it is more expensive than sea route and more time consuming than air fright. Many products such as red wine are suitable to ship by train. It also depends how far the products are from the closest seaport or railway station.

Links

Ethiopia Rail, Pakistan, review, Central Asia

Trade: China’s export,   

One Belt, One Road: Episode 2, 3, 4, 5, 6, 1 (poor screen quality)

There are many articles on this One Belt, One Road Initiative (OBOR). Google it for recent articles. Here are some:

Wikipedia, 

US,

Heritage

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I added this article to my book "Can China Say No".