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.
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
Despite all the good deeds of religions, the non-religious folks are
caught in their cross-fires. A modern crusade and a counter-attack?
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.
to help the Middle East refugees. The statistics say there are more
terrorist attacks from countries that accept refugees.
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.
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.
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!
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.
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 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. :)
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.
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.
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
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.
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.
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?
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.
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...
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.
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.
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
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 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. :)
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.
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.
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
We do have drone killers. How to defend a flock of
thousand drones or drones with defensive drones just like a carrier
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.
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
Good luck to all. If you find my posts useful, please send money (bitcoins only) to my secret retirement account. :)
What is Obama's legacy after most of his accomplishments are rolled back
except saving the market by increasing our national debt to recent
Trump may accomplish even less.
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...
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.
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...
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
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 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.
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?
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. 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. :)
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.
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?
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.
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 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.
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.
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."
Real GDP Growth = GDP Growth - Inflation = 3% - 3% = 0% --- China
should buy and store the imported commodities and gas. Fill to the rim.
If you're running out of storage, build more. Or, buy more futures for
these. Thank me 10 years later. --- Foreign bribery is part of
business expense unless you believe they have the same standard as the
US or you live in the cave for the last 10 years.