Sell in May

The below is a Afterthought on a chapter in my book Complete The Art of Investing. Today the market is risky, so seasonal predictions may take a back seat.

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Best profitable period is: Nov. 1 to April 30 next year. It is similar to the saying 'Sell in May and Go away'. It did not work since 2009 as it was Early Recovery in the market cycle.

The market does not always happen as predicted. However, when more folks follow, it becomes a self-fulfilling prophecy. I prefer “Sell on April 15 and come back on Oct. 15” to act before the herd. The more practical strategy is to start selling in April 1 and become more aggressive (selling at closer to the market prices) when it is close to May 1. For the last five years, I do not find this prediction reliable.

The explanation of the ‘summer doldrums’ could be the investors cash their stocks for vacations and college tuitions in the fall. Buying quality companies at the dips could be profitable. 

Happy Memorial Day!

Thanks to the veterans and they should be treated better.

If we send the folks who want wars or their children to the front line, then we would have no wars. Where is in the Bible or any religious book teaching us to kill?

We will never balance the budget with endless wars and the politicians have to buy votes from the free loaders, which are becoming the majority of voters.

Give peace a chance please!

TPP

TPP has no sponsor (may be Japan). It will have a natural death before its death.

Another terrorist attack

Despite all the good deeds of religions, the non-religious folks are caught in their cross-fires. A modern crusade and a counter-attack?

Using the mind of a terrorist, try to understand why and their actions. Many cities in the Middle East are ruins due to bombing and folks have no future. Who bomb their cities and where are the bombs come from? The next wave could be drones with bombs. It will be more scary and more scary they kill in the name of God.

I love to help the Middle East refugees. The statistics say there are more terrorist attacks from countries that accept refugees.

I do not support offense industry.

Trump's proposals

I have not received any social welfare... and my children will benefit from the elimination of estate taxes...

Hence, I will benefit from Trump's budget. However, the poor will suffer.

It is common sense that the presidents work for their own class of citizens. Obama sided with the poor (as most black are poor and some without a US birth certificate) and Trump sides with the rich. Hope we do not go to these extremes.

I hope we cut down financial aids (military aids too) to countries that are richer than us such as Japan and EU. We need to encourage the able welfare recipients to work. Taking their health care benefit for taking a job is not one.

Will balance the budget

The budget will be balanced in 10 years. Why 10 years? Trump expects he would survive in 2 elections (8 years). Wishful thinking!

In 10 years, no one will remember the promise and Trump could be dead by then (due to old age, too much Volka, or...). You can cheat all folks all the time as long as long as you extend your promise to the time you could be dead. Smart business decision!

On the web sites that censor

Dorothy, are we in Russia?

Philippines

Philippines president is strong and smart (sometimes silly to many). With the limited resources, you need to take drastic actions. I bet after he found out the US will not help him to defend his country, he told us to fxxk off and negotiated with China. He got a lot of loans that could be far more compensation for the disputed islets.

Philippines is a tough country without natural resources but damaging volcanoes. It is similar to Cuba in many cases. They have a lot of educated citizens - just look at the number of their doctors. Hong Kong citizens hire a lot of them to take care of their households. Many decades ago they were refugees from China to work as servants to the Hong Kong citizens who previously were refugees. Similar to the US?

How the credit raters screwed up

How the credit agencies lost their credential? Obviously they did not read my books available before 2008 about the loan qualities. If you have my book, read the Chapter "Sectors to be cautious". They would have saved millions plus their reputation minus $10 for my book. :)

China's credit rating has been lowered

China has different system than the west. There are 2 major problems most folks ignore.

1. Banks are the puppets of the China's government. If the government asks you to forget the loans (in some ways such as buying the securities of the falling corporations), the bank has to do it.

2. If SOEs, State Owned Enterprise, fails, China will suffer. Many SOEs perform far better than expected by experts 20 or so years ago.

A day in Chinese history.

Today is the 50th anniversary of (Anti-) Cultural Revolution when the Red Guards broke a $1 million bowl without blinking their eyes. Will all the Red Guards please stand up and say something to defend your dumb actions.

Mao told his starving citizens you're the greatest in the world. A true paper tiger.

History will not be kind to them and hope we will learn from history and not to repeat history.

US wants to be a power again in Pacific?

Does US challenge or take risk by sending a carrier to S.China Sea? What we would say if China sends a carrier to our coast?

It is not the first time and most likely not the last time to play this kind of dangerous game with carriers or jets. A day later of the incident, US is playing this game again with the jets.

Today's carriers are sitting ducks. They have missiles for carriers. A submarine surfaced within miles of a carrier without being detected. How to defend hundreds (or thousands) of drones each with its anti device for anti drones?

There are endless arguments of who are the owners of these islets. Since the Opium Wars, China has lost more territory than any country on earth. China is stronger every day and I hope they settle the claims diplomatically. China has been bullied by many for over 200 years and hope they will not be bully herself.

This is the natural resources given to us by God. I sincerely hope they will share the resources peacefully. Hope the assets will not turn out to be liabilities.

Have we learned enough on our endless wars from Vietnam to Afghan? We've too many problems to fix at home. In long term, the economy and the stock market (except for specific sectors) will not improve.

Robots and the wealth gap

With the advances in computer, electronics and AI, robots will act more like a human being in a few years.  I bet China may be the first one to have a 'usable' home robot. Most likely they are manufactured from Shenzhen.

The wealth gap will be widened with the advances of robots. Why? Some of their jobs are replaced by robots. The rich owning the stocks of companies building robots are getting richer.

More 'likes' that my pocket can hold

The budget will never be balanced as long as we have the endless wars and the politicians have to satisfy the free loaders which are becoming the majority of the voters.

Tax the robot?

The income of robots is zero so the tax is income ($0) * tax rate = zero.

My prediction

Here is my prediction on Jan., 2016 and I also posted my reason here in WSB. How many energy experts can do the same?
http://bit.ly/1nEAFff

If I put all my money buying it at $30, I would be filthy rich now. Not a good prediction? Tell me who have done better and how many 'experts' tell you to unload at $30.

I'm not a trader as I still hold most of my oil ETFs. However, if the trader buy at $45 and sell at $55 as predicted, the trader would make a lot of money. Do not cover your eyes with biases.

The above is responding to a "energy expert". He also said the average oil price for the last 70 years is $35 (or $30 from my rusty memory). Yes, but the easy oil has long gone.

Socialism is self destructive.

We should encourage folks to work hard instead of the other way round. If one loses his free health care for taking a job, s/he will not take the job. The free loaders are lazy (a human nature) but not stupid. Do you blame them?

Losers' corner

We already has Sear's Christmas Catalog. It is renamed as Amazon.com.

Sears and K-Mart merge is the last straw. It is easy to blame the other guy for failure.

Radio Shack is RIP. They followed the same model as drug retail such as CVS by opening stores in every corner (a little exaggeration). The difference is RS merchandises can be bought in many places and they're not consumable (i.e. needs refilling urgently) compared to tooth paste, aspirin, mouth wash, cold medicines...

Two free books

1. Investing for beginners.

https://www.amazon.com/dp/B013XQDUMW/

2. Humor on Investing. (Not sure still free today).


Both are Kindle versions from Amazon.com.

Why free? After reading this book, hopefully the readers will buy my more advanced book "Complete the Art of Investing", whose Kindle version has about 3 times the average size of books on investing.

So far, all book profits have been donated to charities. I do not know any reviewers on my books.

No more easy oil

An expert in energy told me that the average price was $35 for the last 70 years to contradict my predicted oil price. It is very misleading.

First, inflation is not considered. To illustrate, today it costs about $7 for a big Mac with fried and a drink. I remembered I paid about $1 for the same 35 years ago. Second all the easy oil has gone long time ago - those oil that does not need a lot of drilling.

Just for production, it will cost more than $35. It  means all the ocean-drilled oil and oil sand are not economically feasible at today's low price.

Risky ETFs

ETFs by design are less volatile. However, many have stocks based on their market caps. It turns out most of them are rocket stocks such as Apple, Amazon... ETFs based on smaller caps do not have this risk. However, I prefer contra ETFs now as the market is risky to me.

Using SPY (simulating S&P 500) as an example, it should be .2% if the selection is not weighted according to the market cap. For SPY, the first stock Apple is 4% and about 2% for the next 3 stocks. They are all rocket stocks.

Enemies are at the gate

Check out the Shenzhen link in my second post for the day and you will be amazed. In my own words, "Shenzhen is the Silicon Valley of the East, but in 10 years, today's Silicon Valley would be the Shenzhen of the West."

I do not totally agree but not totally disagree with the Wired video on Shenzhen. In a nutshell, they said we should have open source and allow others to copy our products so we will have better products. All the legal lawyers would hang themselves right away if it is materialized.

Many Chinese bashers would ask "Why we do not have global brand names from China?". It is similar to what they asked before, "Do not be afraid of Korea as they're building low quality and low value products.".

In my previous post, I'm outraged that our kids do not have homework, so they can play more video games.

My point is: Be careful as the enemies are at the gate.

Ignorance is our worst enemy. When the British union did not want automobile in order to 'save' jobs, they lost it to Germany. When the emperor of China ignored the Industrial Revolution and the advanced weapons, he started the centuries of humiliation.

Commodity and the USD

Commodity and currency are inversely proportional to each other in theory. For the discussion, we treat gold and oil as commodities and USD as the currency. Commodities are fixed in supply to some extent but currency supply can be politically manipulated.

Today most countries want to depreciate their currencies by printing money excessively. When we have excessive money supply (as more money chasing the same commodity in fixed supply), we should have hyper inflation, but it does not happen for many reasons.

Most text books on this subject have to be rewritten and the college graduates can ask for refund from the colleges. :)

A timely post (4/15)

I agree with you that the market is risky. However, it could stay high for a long time. From my book Profit from 2017 Market Crash, I recommend to act fast when technical tells us to exit - currently technical is fine but not fundamentals.

Here is my market timing result for today's market.
http://bit.ly/2oYhvF0

You forget one important metric. Obama has increased our national debt to recent record high. To illustrate, I can make the company look rosy with all metrics (P/E for example) by borrowing a lot of money. It is short-term gain but long-term loss as our children who do not have a voice now have to pay for it.

My rear mirror

When the market fluctuates a lot, it means the market does not know its direction. If it happens, it could be plunging soon.

CENX is a barometer. If you sell making 5% and buy when it dips 5%, you could make some good money. The rear mirror is always clearer.

Drones and anti drones

Drones can carry weapons, lasers, chain saws, chemicals (fertilizers, poisons...). We need to know whom they're sold to - say No to terrorists.They can buy them from Amazon.com and equip them with bombs.

Use quiet drones to take pictures of the naked princess instead of expensive camera most cannot afford.

We do have drone killers. How to defend a flock of thousand drones or drones with defensive drones just like a carrier formation.

Another business case

You do not find many professors on economics making a bundle in the stock market which is changing every day. Most are still driving the beat-up cars if they do not have a book to sell.

How many of their readers can be rich if they cannot be rich themselves? It is just another business case in Harvard titled The Blind Leading The Blind

Politics on politics

Communism discourages its citizens to work hard since everyone is paid the same.

Socialism is self destructive when you're running out money to give from the former British iron lady.

Capitalism is good if we can distribute enough wealth to the needy but we need to encourage the able to work and get out of poverty.

Mr. Comey

Did Comey trying to do a job?

He could just write a book to tell the real story and run for presidency as an independent in the next election. He will not win but it could boost his book sales. There is always a silver lining.

ETF

Stay away from leveraged ETFs unless you're very sure.

Major contra ETFs (betting the market going down) are SH (contrary to SPY), DOG (contrary to Dow) and PSQ (contrary to NASDAQ). Google them for more info.

Blowing my own horn

Past performance does not guarantee future performances. But, we can learn from past results. I made 80% in 2009 in my largest taxable account - I found and keep my statement for the year.

In some strange way, I like market crashes so I would have buying opportunity. A twisted mind?
http://bit.ly/19Y6XEQ

One Belt, One Road Forum

It could be the forum of the century. US companies such as GE, Honeywell, Caterpillar ... should benefit too. Most China's neighbors should benefit. It is better to build roads than start wars.

Dances in different directions

While dancing forward, President Xi said, "I'm a lover, not a fighter."

While dancing backward (moon walk?), President Trump said, "I'm a fighter, not a lover" and then he said, "You are fired before you fire me". Not a joke as he has fired many of his staffs and many who could fire him.

They both made it to the final for Dance for Celebrities.

My philosopy in investing

It applies to me but may not to you.


Keeping my fingers crossed and continuing my frugal life style, I should have enough money to live with. Making another zero in my total asset will not do me any good. Hence I'm ultra conservative as most retirees should. Investing is not a sport that you have to win. Jesse Livermore, arguably our greatest trader, committed suicide and was almost bankrupted with all the glories of being the 'greatest'. We do not want to follow his footsteps.


As of 6/2017, the market is very risky. I’m piling cash. When the market crashes, I'll use some funds to buy contra ETFs. Otherwise, my money is collecting dust with almost zero interest and inflation is eating the value of my cash. Today I bought some CDs and some high-yield and short-term bond funds. They do not pay much but better than nothing.

The market could be our best friend or worst enemy. Personally I prefer it crashes every 4 or so years to provide buying opportunity. The crash has been long overdue.
Good luck to all. If you find my posts useful, please send money (bitcoins only) to my secret retirement account. :)

Obama's legacy

What is Obama's legacy after most of his accomplishments are rolled back except saving the market by increasing our national debt to recent record high?

Trump may accomplish even less.

I'm politically neutral and I do tell the truths or what I think without thinking of what my party says.

We just do not have great leadership recently. There are advantages of a two-party system that checks each other. The disadvantage is we're wasting time to argue who is on top.






The problem of our voting system is we elect our leaders once every 4 years. Hence, the politicians only care about the results of 4 years - very short sight for the country. Since we have more free loaders than loaders, the politicians try to look for their interests instead of the country's.

We do have an enviable Constitution. But, it needs a lot of amendments to react to the new century such as gun control...

Strong USD?

I bet the USD will still be strong for at least the next 5 years but not longer than that. It will be interesting to see which currency is used in the loans and trades in the One Belt, One Road Initiative.

Most Europe ETFs have been doing great. Fundamentals are getting stronger and technical is certainly. Finally it is not a mirage to me. A few years ago I paid $1.40 for a Euro and now is $1.1.

Trump could make us richer by ending the wars and cutting defense aids to Europe, Japan...

Paksitan & the Belt

Pakistan is the important part of the road in One Belt, One Road. A city the road passing thru is claimed by India. It is also an enemy of India, and by logic China is an enemy of India. Hope the two countries with the largest population in the world get along. I wonder how many debts Pakistan had paid back for all the completed projects financed by China.

Smart folks doing stupid things

Roger Alies of Fox News passed away. If he quit last year or died last year, his crimes would not be exposed. With his money, why he wanted to harass the decent (my guess) and smart ladies. Another Harvard business case of smart folks doing stupid things.

Poor timing for him and good timing for justice. RIP in hell and God is the best judge

Shenzhen

Let’s start with a video from Professor X. Click here or type the following in your browser:

https://www.youtube.com/watch?v=SGJ5cZnoodY&t=923s

Shenzhen has become the Silicon Valley of the East, or in the next decade we would say the US’s Silicon Valley is the Shenzhen of the West.

If you bought all the stocks in the Shenzhen Exchange, you could be very wealthy and there is no need to read my books on investing.

For example, it would take 9 months to assemble a new product but only 3 months in Shenzhen as most of the components are readily available next door or in the next street. Shenzhen’s advantages are no longer tax credit and cheap labors (but highly-trained Chinese technicians, engineers and researchers). Many tech companies from over the world come to Shenzhen to set up shops in order to be successful.

There are many high-tech products from Shenzhen and they’re sold all over the world.

Under Uncle Deng’s vision, Shenzhen has become one of the (if not the) wealthiest city in China.  Your home work is to study the many articles on Shenzhen starting with Wikipedia or enter the following in your browser.

https://en.wikipedia.org/wiki/Shenzhen

For extra credits,
1. There are several other Youtube videos on this amazing city.
2. Why copying the current technology to make it better or using it for a new product is creative and profitable?
3. Any other countries copy Shenzhen's model and will they be successful?

Have a good day, class.

Happy Mothers' Day

The following is my translation from some one's recent work (sorry, cannot find the name of the author). Hopefully I did not do a bad job to do injustice to the author. I changed some words as some could not be translated effectively. I also added a new title and it is about you the readers. The poem is simple but very touching. If you do not feel anything, please rush to the nearest clinic to check what's wrong with you. :)

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                       The third cry

I cried two times that are unforgettable in my life.

The first time when I started in this world.
The second time when you ended in this world.

The first time I do not know but from your mouth.
The second time you do not know but from my heart.

Between these two crises, we had endless laughs.
For the last 30 years, the joyful laughs had been repeated, repeated...

You treasured every laugh.
I remember every laugh for the rest of my life.

A fool for life

Some Chinese words on the tattoo are quite amusing. If the words means one is stupid, then one has to be pretty stupid to tell the world he is stupid for the rest of his life.

The moral is do not follow the trend and learn Chinese. :)

Buy Toshiba?

Do your own homework to see whether Toshiba can turn around? It also depends on your risk tolerance. Not for me.

There are too many recent examples that they're just RIP such as Radio Shack.

Facebook and news

As uncle Deng said, "When we open the window, we've fresh air but also let the flies come in."
Internet is the window and social media is the fresh air and also flies. Today it is easy to create fake news, promote products, spread lies... when you have a internet connection.

I wonder how many former, reputable news folks are making fake news, promoting products, spreading lies... I do not blame them as they have to earn a living too. Do you?

Social standing and my Seiko watch

Chinese tourists have been targeted by criminals as they carry a lot of cash. The mobile pay system is needed to satisfy a specific need. Apple could take advantage of this situation.

Why they carry so much cash? They buy all the luxurious stuffs such as expensive hand bags. They want to save the hefty tariffs. It is similar to border trade happening in Hong Kong for a long while.
Chinese boost their social class by showing off the expensive stuffs they carry. That's why my friends in Hong Kong would ask me (or despise me) for wearing a Seiko watch.

Save taxes

You can gift up to $14.5K (from my memory) per gifter and per giftee. To illustrate, I and my wife can give 2 * (14.5K) to each of the giftees. For a family of 4, there are 4 giftees.

The above $14.5K is the market price of the security. The cost basis is from the gifter if it is a gain and it is not if it is a loss. Consult your lawyer.

In most cases, it is advantageous to give appreciated stocks to a family member whose tax bracket is lower.

Lucky holders of Buffett's funds

It is one of the advantages of owning Buffett's funds - no dividends and hence no taxes. Most owners do not want to sell due to the hefty capital gain taxes. They want to hold them until they die so they do not have to pay Federal capital tax due to the cost step up. However, they have to deal with estate taxes. A good tax lawyer probably would advice them to transfer some shares to their children.

Buffett said he should be in tech stocks

Buffett has a long history of staying away from tech stocks. He looks for stocks with moats, paying dividends... It is his philosophy and he has an army of followers. It has been working well with low interest that forces investors to look for these stocks.

Even a good friend of Gates, he did not buy Microsoft. He missed the rising of Apple. He bought the falling IBM. He missed all the small high tech companies that have been doing great. To his credit, he escaped the internet mirage.

I described his weaknesses and strengths in this blog.
http://bit.ly/1lbm2Ol

Green cards for $500,000

In tier I cities such as Beijing, Shanghai, Hong Kong..., $500,000 is a small sum (a small flat in Hong Kong with 600 square feet in a decent area costs more than that). The gain is huge: escaping from pollutions, fake food, tough education competition... That could be the reason the Chinese fast food joint at my mall change hands that frequently.

However, it is far better to attract immigrants who come here for welfare on day one.

Dream high

I heard this. The girl said she wanted to be a president when she grew up. She went to a circus and she said she wanted to be a clown. Her wise father said, "You can be a president and a clown at the same time."

LMBAO. A joke or truth - you decide.

Video feature for Alexa

"Alexa, can you find me a date."

She called the escort service from the closest location. She asked whether to sort in price or customer 'likes'. Now it can also display pictures.

Just an observation. I'm a sinner even thinking of it. :)

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I was thinking of whether I should include this blog as it would lower my moral standard. Let me know if you feel the same.