Random rants on today's financial news

* I prefer quarter of prior year than quarter of last quarter for stocks due to seasonal adjustment. Commodities in the previous quarter was really bad but today they are getting worse. Indonesia's 5% is fine but not great compared to China's 10% (not any more) for a long while.

* Usually the host country of Olympics does good in the market next year after the event. There are exceptions but they have a good reason such as Greece, a small country that should not host a world event. Brazil really depends on the oil price next year.

* The future of employment looks dim in the long run: 1. computers and robots. 2. globalization (you can outsource all functions of a corporation to foreign countries) and 3. high expenses in running businesses in the US.If the youths do not have a marketable skill (plumbers and electricians are marketable), they should prepare to flip burgers (I guess that is why they have Burger University LOL) and collect welfare.

Every generation has its problems, but this problem is hard to fix.They are talking about returning jobs to the US. It is all BS as the $20 wage can never compete with $1 per hour. Apple returns some jobs, but it is used to cover their real face of making money.

The kings who have no clothes

The past heroes are Bill Gross (the bond king who does not like bonds) and Ackman (the hedge fund manager who has nothing to hedge). If they bought SPY, they would be better off.

Following the past heroes is a blow to your financial health. Buffett has not done well in the past 5 years and many others. It could be we're in a time not favorable for stock pickers. I can further confirm it with Barron's last year's pick, IBD...; I did have identified them in my books. I do not care how much they made in the last 20 years, but the last 5 years. A weather man can predict the weather better next week than next month.

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All trade partners are set up to exclude other folks that do not join them. EU is a huge partnership that no one argues against it.

One Loser + One Winner

Yahoo! is a broken company. It cannot compete in all major fronts. I blamed Microsoft for sleeping for the last 10 years but I blame Yahoo! for doing too much for the last 10 years.Why? Most 'enhancements' include bugs and errors that make the old systems look like a saint. Doing nothing could be the best for the company.

 

The only 'achievement' for the investors was the x-CEO bought a stake in Alibaba (and the 40 thieves) and he was Xed. Make a sound statement of the direction of the board.

 

I can see VZ is a sucker. VZ is not a tech company with the expertise. It is a regulated business and the culture is like that. When I worked for them, I was the technical star as they do not have real technicians except those negotiators to buy technologies. Accountants never understand technologies - how many of them run high-tech companies without bringing them down?

The objectives in life (updated)

We come to this earth with nothing and leave with nothing. Why do we fight for wealth, prestige and power? However, if we do not have the objective for wealth, prestige and power, it is a life without meaning at least to me.

Money should not be our primary objective in life and happiness and health have to be earned and cannot be bought with money. When you’ve accumulated enough wealth to have a comfortable financial life, you may want to pursue other objectives in life besides wealth.

I have seen many successful men and women who are not wealthy using financial yardsticks but they are wealthy in working on jobs they love, good friends, good families, good health and/or fulfilling their own objectives in life such as helping the poor.

Most likely when you’ve accumulated enough wealth for a financially secured life, there are many objectives in life more important than wealth such as happiness and health. Still not convinced? Check out the wealthy singers, movie stars and athletes. Are most of them really happy with all the broken marriages, drug and alcohol abuses…? I rest my case. Many of them do not have basic investing knowledge (most likely they have not read this book), and end up bankrupted.

Do not believe most authors on investing are rich. Unless they do it for fun, the successful ones do not want to reveal their secrets. As of this writing, I’m financially sound especially with my age and my frugal life style. I do it for fun and I read my own books to remind me of my mistakes in investing. The best trader in our generation committed suicide losing all his money and called himself a loser. Learn from his failure: 1. He did not practiced what he preached and 2. Risky bets. My books preach to be a turtle investor.

One friend accused me of my greedy investing. Does he favor the 1% or the 40% who do not pay any Federal income tax?

He accused the 1% (I'm not in this group) of altering the tax laws to reduce their taxes. It is partly true and Buffett should not pay at less the tax rate than his secretary. Many rich folks donate their wealth to charities. Without the 60%, where do we get money to subsidize the 40%.

We should encourage the 40% to work. The current system takes out their benefits for taking a job and it is wrong. I contribute by paying income taxes when I make money in the stock market. A good market allows me to help the poor.  Investors buy stocks to finance new products and services and hence boost employment. Capitalism is no evil.

The above is an abstract from my book "How to be a billionaire", a good choice for recent college graduates.

Political parties and THE market

The market has more than recovered (about 170% so far) since the day when Obama took office. The S&P500 performance under Republicans vs. Democrats since 1926 to 2014 is approximately:

 Annualized return under Democratic presidencies: 13% 
 Annualized return under Republican presidencies: 6% 

The market is riskier based on the above statistics. In addition, there is a good chance that we will have either a non-politician president or a lady president for the first time (more materialized in 4/16). The market usually does not favor to this kind of change. Statistics do not mean it will happen but history repeats itself more often in investing. The above is an abstract from my book Complete the Art of Investing.

Financial institutions

In my books, I state several sectors are to be cautious. One is financial institutions as they have high debts (i.e. loans). They need other yardsticks (such as the quality of the loans in this case). Ford is also one as their loans could be car loans to their customers.

Negative Vote?

Republicans are supposed to be pro business. However, the stock market rises about double when Democratic Party has the presidency. 

I hope they have "negative vote" just like the Dislike button. Count these folks as half vote: not paying any Federal income tax (40%), mentally challenged (could be half of the population)... Representation without taxation is worse than taxation without representation.