iPhone

If you're my reader here or reader of my book, you know I trade Apple a lot. So far, making some money, at least enough to buy some iPhones. It also tells me making two or three heavy bets a year is better than making numerous smaller bets. Why not one bet? I do not want to put all eggs in the same basket (i.e. diversification). Why more than 5 bets? I guess only 2 or 3 opportunities are available in a year. To compromise, I plan to have 2 or 3 large bets and numerous small bets. Apple was one of them for about 3 years from the time it was recommended in my book Scoring Stocks at about $52 per share.

This year OIL is my large bet. It is a long-term bet (for me long term is longer than a year). I also have a medium bet on GILD. The several medium bet last year included several short squeeze candidates and heavy insider buys. Their performances vary.

Now go back to my topic before I drift too far away.

Finally I got my iPhone 6S. My son told me "S" (could stand for Steve) is an intermediate version. "6S Plus" could be too big for me to carry though I like the bigger screen for my weak eyes. I do not really want to carry any phones. When almost everyone has a smart phone, I feel I'm late or outdated. I could have an iPhone 4 free, but I need Apple Pay eventually (iPhone 4 or older lacks a chip function for Apple Pay). It seems about the same operations as my iPad without the phone functions. Quite an amazing machine that may have more power than the largest computer in its infancy (60s). As Einstein said, "Everything is relative" and after 10 years or so it would be sneezed at the dumbest phone.

Sometims logic is not logical to some

You can find many toasters made in the USA  in museums. Is it OK to move the toaster factor to Vietnam?

The logic:
All toasters are made in China.
Chinese toasters are crappy.
Conclusion: All toasters are crappy.

Question: Do you find iPhone crappy (as it is assembled in China)?

Question: If we charge heavy tariffs on Chinese goods and Chinese do the same on our export such as Boeing planes (disadvantage to us if they do not have the same tariff on Airbuses). What is it called? Trade war.

A cry baby of losing jobs to China

My response:

The original question: Is it OK to move iPhone factory to Vietnam?

We cannot assemble iPhone in the US for many reasons. Here are some basic ones:

1. No rare earth elements enough for the phone.

2. About 40,000 technicians / engineers help iPhone development. We do not even have that number of graduates in the USA. If we do, we have to pay them $100K each and it will add at least another $50 to your iPhone.

3. For a new iPhone, they got thousands and thousands of workers at short notice and require them to work long hours. Our labor laws do not allow us to do so.
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In some cases, China creates jobs. Look at GM, Ford, farm products, Boeing, Microsoft... Do not think in one track only.

The US budget

There should be a constitution change to enforce balance of budget.

I also propose to vote what you want in the budget. I would vote to spend $0 on offense (i.e. to be the world's policeman).

Responding to a post on best jobs

Physicians are not the best paid job if you figure in how many hours they put in, how hard to get into medical schools, how much it costs for the education, how stressful, how responsible...

Lawyer graduates have a hard time to get a job today due to over-supply. Good, we need more Robin Hoods.

There are many jobs with good salaries due to supply and demand: computer software (has been for over 40 years and I was one), accounting (not well paid but easy to get a job)...

With the aging population, nurses, pharmacy jobs... should be in demand.

The best job is searching for stocks. I beat all the professions described every year in the last 5 years keeping my fingers crossed. I do not have to travel to work. I do not have a boss (except my wife). I do not have anyone to report to (except IRS once a year). No one dies if I made a mistake. I can take any vacation any time and any length I want. I do not have to talk to anyone except my computer. I'm the luckiest SOB!

Anniversary

From Seeking Alpha:

"Today marks the seven-year anniversary of the current bull market for U.S. stocks, which have logged more than 84 months without posting a decline of 20% that marks a retreat into bear territory. According to S&P Dow Jones Indices, the current bull run is the third-longest on record, with the average lasting slightly less than 59 months. How much have U.S. indexes gained since March 9, 2009? Dow +159%; S&P 500 +193%; Nasdaq +266%.".

2009 could be my best year in stock investing. Here is my write-up.

I had 80% return in 2009 in my largest taxable account. I did not include it in my other books before as I just found out the written statement.

This is the best time to make a profit: Early Recovery defined in my stages of a market cycle. My chart told me to start move to equity in September, 2009. I did in March, 2009 with other reasons. It could be luck, technique or both.

I did dip into my credit line of my equity loan (not recommended to most). I did not use it as a margin loan as most folks do, but as a saving from the lower rates than my broker’s rate. I paid back the loan right after I sold some stocks. The turnaround was high until I exhausted my short-term losses (tax loss harvest).

The strategy is bottom fishing: finding value stocks. Some sectors described in my book are better in this stage of the market cycle.

I had similar success in 2003. I did not have defined bottom fishing technique at that time. I expected the market to be fully recovered in two years. From Value Line, I selected stocks with high “Projected 3-5 year returns” and the short-term assets can last for two more years (judged by the burnt rates).

However, the story has not ended. I am looking another crash in 2016 and hopefully another recovery. After 2009, I had been too cautious (leaving a good percentage in cash). Win some and lose some.  


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For more of my reasoning, check out the book described next. 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.

On today's financial news

Quite a lot of news today. I do not really know where to start - OK in sequential order.*

 

 The last time I checked, the market has risen over 180% from March, 2009 to Jan. 2015 excluding dividends. 

 

For rough estimate (you can't estimate it precisely as the yield changes every day), it is about 2% dividend for S&P 500 index. The dividend is important on flat years. For example, you can claim you beat S&P500 index by over 500% but actually you break even with the index if one includes dividend and one does not. A common but legal trick!

 

* Yes, gold funds have turned around. I missed it as I had not paid attention to the monthly winners. Never happens again I hope.

 

* The queen is just a figure head. Her function is attracting tourists and nothing more (for her age I cannot say eye candies).

 

* Japanese high-tech companies are practicing the act of all in a family or not letting your water to flow into others' rice field (an old Chinese saying). Chinese companies would give better prices I bet.

 

* Tilson is the poster boy of shorters. Ackman's VRX could be a turn around candidate. Both made profits and lost a lot. Most of us should not bet like them as we're using our own money. All the gold in the world would not be better than a good night sleep.

 

* There will be no Iran and no N.Korea in the next morning if they use nuclear weapon. Paper tigers?

 

* On sale today: One way ticket to Mars in a free flying coffin, with free cremation and disposal service. I pay for your life insurance if I'm your beneficiary - better bet than any stock trade.