Those are many isolated cases on poor quality of Chinese products that have been amplified by the media.
Where else can you buy these household stuffs you mentioned? From Thailand, Cambodia, India...? They're even worse than China. Using tires as an example, I do not buy low-end tires but there are folks here who cannot afford higher end products.
Look at the components inside your car, and you will find many are made from China.
We depend on the US companies like Fisher and Apple to check the quality of Chinese products before they put their labels on them.
Actually China is moving up the value chain and many projects/products are won due to better quality. However, there are thousands of companies trying to make a buck and it is hard to distinguish the quality of a product.
It is a kind of reality that we've to face and hopefully China has to move up the quality standard to establish a better reputation for China Inc.
Personally I do not buy food and drink for China, thanks to the publicized cases. I suspect the fish I got from restaurants are from China and suspect the water quality. Recently I bought lamps from China imported by Lowe's and it was hard to assemble and did not last long. I prefer to pay higher prices for better and/or safer stuffs.
Tuesday, January 31, 2012
2011, when stock pickers die
This is a year stock pickers (particularly the fundamentalists) do not perform. The summary of AAII screens confirm it and so are many mutual funds. Most investment advisers/newsletters are not doing good. Check the performances of your investment newsletters such as ValueLine and IBD. However, do not give them up. They may not perform for a short while but they will return back to the normal performances. It is a characteristic of a bottom market.
The market was volatile with most of the gains in the first half of the year of 2011. Traders (particularly the Technical Analysts) do good.
From data of about 300 stocks for a period of about half a year, I tested out which fundamentals do not work well in 2011 for illustration. They are analysts' grade, cash flow and the short %. Normally, the stocks with analysts' grade A (or above 8 from Fidelity), cash flow (A from Blue Chip Growth) and shorter % (less than 5) would perform better than the average. Not this time. You can obtain these metrics from many other sources.
I'm adjusting my search criteria accordingly for swing trades. As of 3/2012, I'm not buying a lot and waiting for the big dip I expect it will come. However, when I see bargains I'll buy them and wait for years for the market and these stocks to recover.
The market was volatile with most of the gains in the first half of the year of 2011. Traders (particularly the Technical Analysts) do good.
From data of about 300 stocks for a period of about half a year, I tested out which fundamentals do not work well in 2011 for illustration. They are analysts' grade, cash flow and the short %. Normally, the stocks with analysts' grade A (or above 8 from Fidelity), cash flow (A from Blue Chip Growth) and shorter % (less than 5) would perform better than the average. Not this time. You can obtain these metrics from many other sources.
I'm adjusting my search criteria accordingly for swing trades. As of 3/2012, I'm not buying a lot and waiting for the big dip I expect it will come. However, when I see bargains I'll buy them and wait for years for the market and these stocks to recover.
Thursday, January 26, 2012
Market Timing
Good market timing predicts market direction more than 50% correct of the time. You make a bundle with this percentage in crap and black jack.
We divide into 3 primary areas: secular market (about 20 years interval for the last 3), market cycle (about 4 years interval) and the yearly corrections (about 3 times in a year). Since it is not an exact science, all the numbers are educated guesses based on historical data.
This post concentrates on the last area: yearly correction which is calender based.
* Presidential cycle. Pre-election like 2011 is the best among the 4 year cycle. Post election like 2012 and mid term like 2013 is the worst.
* With exception of a market plunge, last year's loss could be a good indication of this year's gain. 2007 is the market plunge, and 2008 continues the loss to give a good rise in 2009. Not always works this way.
* Seasonal. Best is the period from Nov. 1 to April 30. So is the saying 'Sell in May and Go away'.
* Worst month. September.
* Best 30 days. Dec. 15 to Jan. 15.
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(c) TonyP4 2012. Written in 1/27/12. Last updated in 1/27/12.
Disclaimer:
Do not gamble your money you cannot afford to lose. Past performance is a guideline and does not guarantee future performance.
All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.
We divide into 3 primary areas: secular market (about 20 years interval for the last 3), market cycle (about 4 years interval) and the yearly corrections (about 3 times in a year). Since it is not an exact science, all the numbers are educated guesses based on historical data.
This post concentrates on the last area: yearly correction which is calender based.
* Presidential cycle. Pre-election like 2011 is the best among the 4 year cycle. Post election like 2012 and mid term like 2013 is the worst.
* With exception of a market plunge, last year's loss could be a good indication of this year's gain. 2007 is the market plunge, and 2008 continues the loss to give a good rise in 2009. Not always works this way.
* Seasonal. Best is the period from Nov. 1 to April 30. So is the saying 'Sell in May and Go away'.
* Worst month. September.
* Best 30 days. Dec. 15 to Jan. 15.
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(c) TonyP4 2012. Written in 1/27/12. Last updated in 1/27/12.
Disclaimer:
Do not gamble your money you cannot afford to lose. Past performance is a guideline and does not guarantee future performance.
All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.
Is Apple cheap?
At the current P/E, it is cheap esp. if you consider their cash reserve. However, Apple will not have the same growth rate, so it is turning itself from a growth stock to a value stock with minor dividend. After one or two upgrades by the consumers, the current products will not be economically feasible for upgrades except to boost one's social status.
There are bright spots.
1. Apple Text Book. Imagine all students carry a iPad instead of text books.
2. Apple TV. It is a loser so far and it is a very risky venture. However, the potential is great. It could give all cable companies a run for the money.
3. While he iPad and iPhone are peaking in the hardware, the software and contents for these devices to access have no limit. From TV, we have witnessed how it helps the folks with autism. I can envision many similar applications.
4. Apple moves to Kindle's market.
The minus for Apple it has lost a visionary leader Steve Jobs, I hope he was not replaced by similar managers at Microsoft , who are responsible for Microsoft's lost decade without innovations.
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(c) TonyP4 2012. Written in 1/26/12. Last updated in 7/16/12.
Disclaimer:
Do not gamble your money you cannot afford to lose. Past performance is a guideline and does not guarantee future performance.
All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.
There are bright spots.
1. Apple Text Book. Imagine all students carry a iPad instead of text books.
2. Apple TV. It is a loser so far and it is a very risky venture. However, the potential is great. It could give all cable companies a run for the money.
3. While he iPad and iPhone are peaking in the hardware, the software and contents for these devices to access have no limit. From TV, we have witnessed how it helps the folks with autism. I can envision many similar applications.
4. Apple moves to Kindle's market.
The minus for Apple it has lost a visionary leader Steve Jobs, I hope he was not replaced by similar managers at Microsoft , who are responsible for Microsoft's lost decade without innovations.
-------
(c) TonyP4 2012. Written in 1/26/12. Last updated in 7/16/12.
Disclaimer:
Do not gamble your money you cannot afford to lose. Past performance is a guideline and does not guarantee future performance.
All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.
Tuesday, January 24, 2012
Apple and dividend
I posted on dividends and buyback.
If I were the CEO of Apple, I'll give a 3% dividend. There is a high premium on dividend stocks. It could boost the stock price by 5%, which is 5% extra from the stock options. Why not? They should not be as silly as they look.
3% is not large percent of the payout ratio. If they feel the stock price is under valued, they can just borrow money to buy back stocks at the lowest interest rate in recent history. Same for new acquisitions.
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(c) TonyP4 2012. Written in 1/24/12. Last updated in 1/24/12.
Disclaimer:
Do not gamble your money you cannot afford to lose. Past performance is a guideline and does not guarantee future performance.
All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.
If I were the CEO of Apple, I'll give a 3% dividend. There is a high premium on dividend stocks. It could boost the stock price by 5%, which is 5% extra from the stock options. Why not? They should not be as silly as they look.
3% is not large percent of the payout ratio. If they feel the stock price is under valued, they can just borrow money to buy back stocks at the lowest interest rate in recent history. Same for new acquisitions.
-------
(c) TonyP4 2012. Written in 1/24/12. Last updated in 1/24/12.
Disclaimer:
Do not gamble your money you cannot afford to lose. Past performance is a guideline and does not guarantee future performance.
All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.
Monday, January 23, 2012
God and Tom Brady
Brady's God must be more powerful than Tebow's God, or God played favorite that day and/or felt Tebow's prayer was just an act.
Being the 4th round pick, most quarterbacks may never go to prime time. Bledsoe's injury could be the answer to Brady's sincere prayer.
With Brady's mediocre performance (or due to his better performance at night) and the worst in defense (due to draft pick errors), the Patriots still head to the Superbowl. How many times kickers miss a 31 yard field goal?
This is a perfect proof that there is a God even for a non-religious guy like me. BTW the stock market is as unpredictable and it seems to be controlled by God despite all our analyses.
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If you're not from NY or Boston, you do not know which team to cheer for as they're similar in location, culture, wealth... With the sizes of their markets, both should be on the top of the games - money talks! Compared to other major sports in Boston, the Patriots are under achievers in last 5 years.
Gronk is the bright spot in the team. His huge hands are out of this earth. He runs like a runaway locomotive in steroid through NYC tramping the midgets on his way before and now the giants.
Being the 4th round pick, most quarterbacks may never go to prime time. Bledsoe's injury could be the answer to Brady's sincere prayer.
With Brady's mediocre performance (or due to his better performance at night) and the worst in defense (due to draft pick errors), the Patriots still head to the Superbowl. How many times kickers miss a 31 yard field goal?
This is a perfect proof that there is a God even for a non-religious guy like me. BTW the stock market is as unpredictable and it seems to be controlled by God despite all our analyses.
-----
If you're not from NY or Boston, you do not know which team to cheer for as they're similar in location, culture, wealth... With the sizes of their markets, both should be on the top of the games - money talks! Compared to other major sports in Boston, the Patriots are under achievers in last 5 years.
Gronk is the bright spot in the team. His huge hands are out of this earth. He runs like a runaway locomotive in steroid through NYC tramping the midgets on his way before and now the giants.
Saturday, January 21, 2012
What China should do in the next 5 years
China has been moving too fast. It is time to slow down and set priorities. They need regulations/enforcements on product quality, stock market, water/air pollutions, corruption, intelligent properties, social welfare… China should not wait for problems to surface and should proactively fix/reduce/prevent problems before they happen.
Without product quality and intelligent property enforcement, China will not move to the next phase of moving to a developed country. Without regulations in stock market, no one, foreign or local, would invest in Chinese companies. Without water/air pollutions, folks will not have a better life.
China has enough airports, highways... comparatively. Boosting GNP with infrastructure is not a effective payback now.
When China moves up the value chain, the low-end manufacturing will become less important. China’s home market will offset the importance of export. Product dumping is not a long-term solution to create jobs, which is used to reduce social unrest.
They do have to improve democracy and human rights gradually and slowly.
They also have to settle disputes with her neighbors. Let both countries drill and explore natural resources. Let the water flow to SE Asia and India as it has been centuries ago.
Without product quality and intelligent property enforcement, China will not move to the next phase of moving to a developed country. Without regulations in stock market, no one, foreign or local, would invest in Chinese companies. Without water/air pollutions, folks will not have a better life.
China has enough airports, highways... comparatively. Boosting GNP with infrastructure is not a effective payback now.
When China moves up the value chain, the low-end manufacturing will become less important. China’s home market will offset the importance of export. Product dumping is not a long-term solution to create jobs, which is used to reduce social unrest.
They do have to improve democracy and human rights gradually and slowly.
They also have to settle disputes with her neighbors. Let both countries drill and explore natural resources. Let the water flow to SE Asia and India as it has been centuries ago.
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