Wednesday, February 24, 2016
Drones & iPhone
Almost 100% of drones are made in China. Should we check whether the Chinese have back doors in the drones? They could instruct the drones to take pictures or just use them to kill everything that moves. Hope it is a joke.
Tuesday, February 23, 2016
Comments on today's financial news
* For a change (or the first time), the market moves in sync with OIL
due to the Saudis and Russia both are dumping foreign assets (most in
stocks) to rescue their economies. We may see $20 in April and if it
does, it would be the bottom. My truck is ready. If it does not, my
reserve tank has been fully loaded.
* A 2% loss in one day for the 'stable' pound is a lot. That's why the Queen has to turn off all the lights not because she needs the exercise.
* Germany will have a hard time to help so many refugees. Tens of thousands would help to reduce the problems of labor shortage due to the aging population - but not at this scale.
* Politicians open their big mouths on subject they do not understand. They believe their voters are as stupid as themselves. It is for and against Apple's stand. It is nothing simple and the impact is huge. For starter, all the leaders learn their phones are easily tapped and second China will not allow Apple to sell their phones there.
* Never depend your trade by any article on a specific stock. It is especially true on small stocks that can be manipulated. All small energy stocks are candidates to be acquired by larger companies such as XOM. Nothing is new, but when you hear the news, it would be over already. Some candidates may be left to be bankrupted as there are so many of them and so few cash.
* A 2% loss in one day for the 'stable' pound is a lot. That's why the Queen has to turn off all the lights not because she needs the exercise.
* Germany will have a hard time to help so many refugees. Tens of thousands would help to reduce the problems of labor shortage due to the aging population - but not at this scale.
* Politicians open their big mouths on subject they do not understand. They believe their voters are as stupid as themselves. It is for and against Apple's stand. It is nothing simple and the impact is huge. For starter, all the leaders learn their phones are easily tapped and second China will not allow Apple to sell their phones there.
* Never depend your trade by any article on a specific stock. It is especially true on small stocks that can be manipulated. All small energy stocks are candidates to be acquired by larger companies such as XOM. Nothing is new, but when you hear the news, it would be over already. Some candidates may be left to be bankrupted as there are so many of them and so few cash.
Monday, February 22, 2016
Friday, February 19, 2016
Are dividend stocks better?
There are constant arguments for
and against dividend stocks. I have defined simple tests and conclude that
dividend stocks and dividend growth stocks are worse than S&P 500 stocks.
Again, these are simple tests. If I have more time, I would have a test for
every year (even better with every month). Here are my parameters:
·
Select the top 30 stocks for each test.
·
Only 3 tests from the following date: 1/5/05,
1/5/10, 1/5/15. Why do not start with the first of the month? It is because of
the holiday and the potential weekend. If I have time, I should have included
all years from 1/5/2000 and even better with all months.
·
The last five years represent the current market
better than older dates.
·
The ending date for each test is one year later
(sometimes a few days off due to holidays and weekends).
·
The stocks are from the S&P500 index. I do
not know my historical database is smart enough to reflect the current
selection of stocks at these dates.
·
By rough estimates, I add 2% dividend yield to
the performance of S&P500 index, 5% to dividend stocks and 4% to dividend
growth stocks. Testing other strategies, dividends are not as important as
these tests.
·
Dividend growth stocks have top dividend yields
with dividend growth equal or great than 10%.
·
Non-dividend stocks are stocks without dividends
sorted by the stock symbol in ascending order.
·
The following table is a summary of my finding with the
averages of three tests. The last entry is sorted by the grade from the vendor.
It is included here for my reference.
One-Year
Return
|
|
Dividend
|
5%
|
Dividend Growth
|
5%
|
No Dividend
|
18%
|
Vendor’s Grade
|
14%
|
S&P500 w dividend
|
9%
|
---------------------
Update. The test has been improved with larger no. of tests.
Result
The tests can be reproduced
almost identically from a historical database. It is no cherry picking and I
have no bias towards any of the test strategies. The result is for educational
purpose only. I am not responsible for any error.
Avg. One-Year
Return
|
Beat All by
|
|
Dividend
|
10%
|
-1%
|
Dividend Growth
|
9%
|
-12%
|
No Dividend
|
16%
|
62%
|
All stocks
|
10%
|
N/A
|
--------------------------------------------------------------------------
For more of my reasoning and complete description, order the book described next. It has all the details in deriving the results.
It has 800 pages (6*9) for $9.99. It could be the best $10 you ever spend.
The above is an abstract from my book "Complete the Art of Investing" which is available from Amazon.
I challenged to have the best-performed article in Seeking Alpha history, an investing site, for recommending 5 or more stocks in one year after the publish date. The concepts for that article are discussed in this book.
It has 800 pages (6*9) for $9.99. It could be the best $10 you ever spend.
The above is an abstract from my book "Complete the Art of Investing" which is available from Amazon.
I challenged to have the best-performed article in Seeking Alpha history, an investing site, for recommending 5 or more stocks in one year after the publish date. The concepts for that article are discussed in this book.
Future of Hong Kong, the village I was born
I
do not know about today's Hong Kong and the current generation. I
do know is HK's wealth depends on its proximity to China. All countries
welcome tourist buyers and border traders. Yes, it would be minor
problems in some businesses and house rentals. Without them, HK is
doomed to fail economically esp. with many advantages being
replaced by other Chinese cities such as SH and BJ.
No news is good news
Yesterday's news disguise as today's news. In two words: "nothing new" from the boring weather man in San Diego.
* Britain is smart for not joining the EU at the expense of missing some trades. It is worth it as when the parasite (Greece...) dies, the host will die too.
* In my last cruising vacation in Turkey and Greece, I did not see any refugees. I believe the tourist areas are still isolated.
* My plumber charged me $250 for 5 minutes work (Sunday price) and $200 for over an hour to clear the drain. Why folks go to college? He told me the trailer house would cost over $1,000 to fix after the frozen pipes. It is a case of "the poor get poorer". Why they do not live in subsidized housing? It is also a case of Robin Hood in robbing the rich (I pretended to be rich) and paying the poor as he does not have a heart to charge that much.
* The politicians are still shouting "build that wall". Obviously they have not read my previous post here: Just punish the employers who hire the illegals and it is illegal to hire illegals.
Thursday, February 18, 2016
An article opening a can of worms disguised as dividend lovers
First, the author is presenting his own view and his experiences. Thanks for that. There is no need to attack him as a cult.
I do not know DGI is right or wrong. However, I can assure you that seldom we have an evergreen strategy. I have a simple test in my post here on my simple test on dividend stocks. If I have more time like a day or two, I would have more conclusive results.
I always select the right strategy to the current market. Sometimes it works and sometimes it does not. My current strategies:
Buy OIL, the ETF and wait for 5 years.
Last year it was a side way market as predicted and I used the strategy: buy at dips and sell at temporary surges - just opposite to the momentum strategy.
2009 is value stocks when I made 80% in my largest taxable account and made a mistake in 2010 by leaving too much in cash.
My point is there is no evergreen strategy. All my selections are based on good arguments. Even the best arguments may not always work as the market is not always rational. If it is, there would be no poor folks. Happy investing!
I do not know DGI is right or wrong. However, I can assure you that seldom we have an evergreen strategy. I have a simple test in my post here on my simple test on dividend stocks. If I have more time like a day or two, I would have more conclusive results.
I always select the right strategy to the current market. Sometimes it works and sometimes it does not. My current strategies:
Buy OIL, the ETF and wait for 5 years.
Last year it was a side way market as predicted and I used the strategy: buy at dips and sell at temporary surges - just opposite to the momentum strategy.
2009 is value stocks when I made 80% in my largest taxable account and made a mistake in 2010 by leaving too much in cash.
My point is there is no evergreen strategy. All my selections are based on good arguments. Even the best arguments may not always work as the market is not always rational. If it is, there would be no poor folks. Happy investing!
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