Market over-priced?

Here is a good link.

Hopefully good earnings would avoid an unavoidable market crash.

Tariffs and lobster

The tariffs would lead to commodities price hikes in US as an invisible tax to benefit the government. Commodities will rise else where due to demand such as from "One Belt, One Road" projects and the wealthier China. For example, we used to enjoy $15 for twin lobsters in a Chinese restaurant and now it is $40 as many lobsters literally fly to China.

With tariffs, banning some trades from China and the rising interest rate, we will expect inflation.

I have tried many lobsters around the world including Florida. The best one is still from New England.

Lobster tails are shipped all over the world. Chinese like to have the entire lobster for better display.
From the local news right now on the minute, the lobster price is $15/pound due to overseas demand.

Banning ZTE from using US chips

ZTE is not well known in the US, but in the rest of the world. It has a lot of researches and high-tech products.

The founder and many others graduated in US, the west and/or Australia colleges, worked there for a while before they moved back to China (known as sea turtles) and formed their own companies.
They had government incentives, less regulations plus a lot of cheap engineers (Huawei has many times of engineers as Cisco). This is the first wave and the current wave is still great for them but with less incentives.

Preventing ZTE to buy US chips leads us to more trade deficit. We stop China from buying our dual-purpose products while China can buy them from Europe / Russia. Does it make economical sense?

ZTE will build their own chips to replace those from US. It will be a short-term pain but a long-term gain.

Is Huawei be the next target?

CD from your broker or from bank

There are advantages and disadvantages in both.

Brokerages (particularly Fidelity) have a wide choice. After you select the period, select the best rate. Disadvantage: You do not start right away on new issues.

My local bank offers better rates (almost a promotion once in one or two months) than my brokerage and some tax advantage for Mass. residents. Disadvantage: Need to drive to the bank and again when it matures. Waste my time in filling the forms.


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  Check out my book "Complete the Art of Investing". Click here or search it from Amazon.com.

Another day with a lot of news on China

* I wonder what currency the new exchange will use for the OBOR projects. Most likely the years for the USD as a reserve currency are numbered or lose some of the luster.

* China is smiling when Germany stock market falls. Why? It provides opportunity to buy more German companies esp. in the high tech area as we do not allow China to buy ours.

* DIDI will be successful in China for sure. It is safer to share a ride in China than in US. They have serious punishment in crime. For example, it is death for sex with minors; that is why you do not hear raping babies (not a typo) as happened in India.

Honey and GE

Honeywell and GE are the tales of two different companies.

If you buy stocks in both countries in 1970 (or 1980), you can see the huge difference in profits. Honeywell did make some mistakes but far less than GE.  The major difference is GE invested into areas that they had no core expertise.

My friend's dividends (from stock bonuses) from Honeywell can support his living expenses. As an employee, it is important to choose a winner.

Crude oil

Crude has risen from less than $30 (I recommended to buy) to $68. Daily fluctuations do not matter unless you're a trader.

It is interesting that when it falls to $30, some 'experts' say it would go to $15. Today, the same 'experts' say it would go to $120.

When any sector rises so much and so fast, it is forming a bubble and it will burst. No exception except one or two for special reasons.

Worthy Notes

Here are some common confusion for non-Chinese readers.

·       For illustration, China’s population is 1.3 billion (actually 1.375 B in 2018). However, Chinese would tell you it is 13 billion. Our system is more rational by having a term for every three zeros such as thousand, million, billion… Chinese has a term for 10,000 and it has merit as 10,000 is a popular unit.

·       China is officially named as “People’s Republic of China” as the name “Republic of China” has been taken by Taiwan. Chinese like to add “People’s” in many other names. Some Chinese think “People’s” is better but in reality not necessarily.

·       China’s currency is Yuan (translated as “dollar”). Renminbi is translated as “People’s money”. They are exactly the same.

·       Chinese use metric system.

# Filler: Fact or not

The USA never wants to adopt the metric system. It is mainly due to the love of our football game which uses yards. 0.9 meter does not sound right, right? 

At one time, when two identical missiles were fired between here and Russia, the Russian missile would arrive here earlier due to no extra calculation to convert to metric values. It is not true now as the CPU is super fast today.

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The above is from my book "Can China Say No?". Click here for more info in Amazon.com.

Designed in China

Since 30 years after Deng’s reform, China has not been innovative compared to the US. There are only several recognized Chinese brands in the world market. However, we have been seeing changes in front of our eyes.

Why Chinese have not been innovative

·         As of 2018, China is moving up from a developing country to a developed country. It is not there yet, but it is getting closer. In many sectors China has been in the leading edge and with a huge home market, China is the number one in most sectors in manufacturing.

·         Protection of intelligence properties is still in the infancy.

·         During Mao’s communism era, Chinese did not think outside the box.

·         Chinese education system encourages students to be good testers by remembering formula, data, facts and how to take exams.

Why it is changing

·         As product value is climbing, it requires innovation for better profit margins. Most large corporations have committed research. With a large local and foreign markets, the research will be paid off and some already did.

·         With a lot of innovative products, China has to protect her own intelligence properties.

·         Many do think outside the box. Chinese have seen the successes and hence the wealth for innovative products.

·         We have not seen the geniuses like Gates and Zuckerberg yet in China. However, China does have schools for geniuses in most Tier I cities. Even the traditional schools encourage innovation.

For my personal experiences, many of my classmates become innovators after the “tester” education in high schools. The owner of DJI, the largest company in consumer drones, graduated from college and got a small grant from his college to start the company. It is a successful model to follow.

·         Chinese students work harder than American counterpart. If you believe the students working 3 hours less (my estimate) every day will achieve the same, you believe in fairy tales.

·         The government encourages education while our leaders cut research and school budgets. I know three Ph.D. in space engineering: one retired and two are still looking for jobs. All those talks on improving science education are just garbage.

Links: 1  


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The above is from my book "Can China Say No?". Click here for more info in Amazon.com.

The market

The earnings should be good with still low interest rate, tax cut... However, the market is still over-valued - about 24 P/E vs. the average 15.

It would boost the market. The negative considerations are geopolitics including the possiblity of a global trade war and now Syria. The market is fundamentally unsound and technicals has been changed from sound to average (SPY is now negative in SMA-20 and 50 but positive in SMA-200).

With rate hikes, banks should be doing well for the coming year. My CDs (15 months) pay about 2.5% and then they lend far higher rate to their customers. Hence it is easy money for them if the loans are not risky.

Rocket is plunging

I had a warning on FAANG and recommended using trailing stops last August. I bet they lost a lot since the recommendation as a group. Tesla should be included.

http://bit.ly/2GPbt2M

Driver-less cars

Cars in US or China will not be exported economically due to the tariff.

China has mastered electric car technology. Electric engine is far easier than the combustion engine / transmission (with the acquisition of Volvo, they master them too).

The real technology is the battery. I bet within 10 years there will be new technology that would obsolete the current battery technology.

Do we really need driver-less cars with abundant labor, road blocks, software / hardware mal functions...?

Investing and politics

The 24 P/E is based on the last 12 months and current price (used to be 25 in last Oct. the last time I checked).

I'm politically neutral. I had a lot of jokes (or warning) on Obama as described in my books. The biggest concern is the way he saved the market by printing money recklessly. Well, Trump gives us unlimited jokes. To be fair, I do like some of his ideas: No more Mr. nice guy!

Xi is gaining so much that China changed the constitution to unlimited terms plus many thanks from many countries. Trump and his party will lose a lot of re-elections. Many of his managers retire, are fired or just give up. This is not a good way to lead.

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  Check out my book "Complete the Art of Investing". Click here or search it from Amazon.com.

Splitting California

If Alaska is split into 2, then Texas will be downgraded to #3 from #2 by size.

California should be split as North California is quite different from SF and below. Hence, some laws does not make sense in North California.

Exploring space

Space programs should be subsidized by the government. A private company will only work on the area that would be profitable. Good or bad?

Our shuttle program crashed in disaster literally. It had good ideas to reuse the shuttle and retrieve obsolete space crafts. As in most major projects, rosy pictures were painted and now where are the 'good' decision makers?

Personally my best friend retired and his two children are still looking for jobs. They all have Ph.D. in space science. With most research grants reduced, all those talks on math. and science are just garbage.

Alum.

All the companies using aluminum in the US will suffer. We cannot compete with foreign countries that have cheap aluminum. How smart is Trump's decision?

USPS

With the instant email, who needs sending letters?

The union is supposed to help the members but in reality they are killing their jobs. It is the survival of the fittest (or lower cost).

USPS management are making all kinds of mistake (covered with excuses like crying babies) and let a new company replacing them.

I used to use USPS and then I was forced to switch to UPS. Why? After UPS, none asked me for refund for not receiving the package. Most likely they received them and there were too many dishonest folks.

LMAO

We all do silly things. However, it would be the most silliest to let someone esp. your love one (not any more now) take the video and post it for the whole world to see and laugh at you.
If you have similar video, please post it as the world needs more humor than wars/sex/money/politics (nothing against Trump). LOL.

The second Youtube followed this one is pretty good on China's One Belt, One Road.

Touring East Europe

Click here for pictures or type the following in your browser

https://photos.app.goo.gl/fJ62tyG1txfYBeVs1

Select SlideShow from the Three Dots.

Defending China on IP

The road to a developed country is cheap labor, copying products from developed countries...

We did the same in our early days stealing technologies and Charles Dickens' works from Europe.

No developing countries do not make illegal copies of CDs and DVDs unless you live in a cave for the last 30 years.

One told me, "The Chinese toured his factory and in the next year they came out with similar product."

That Chinese must be a genius of all geniuses. If it is so easy, all countries should have an Intel chip 'invented' as everyone has a PC.

We should play defense. If you're beautiful, you do not want to jog in high crime area at 2 am. If you're not, no one will touch you.

Most Chinese major contracts have a technology transfer clause. If you do not like it, they give the contract to EU or Russia. No one forces you to give up your secrets. The smart guy would use the money to develop better products.

Yes, they stole some via espionage. It is similar to corporations stealing from corporations... Apple, Microsoft... stole Windows ideas from PARC because Xeorx's management was stupid not knowing the value of their products. If you are stupid, there is no cure. If I were the major stock holder, I would fire them all.

I'm more concern on Chinese patent policy. Your patent works if you file before the guy who actually owns the patent.

China is enforcing IP slowly but surely as it has more IP to protect themselves.

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  Check out my book "Complete the Art of Investing". Click here or search it from Amazon.com.

April promotion

Here are the monthly promotions of my books. If you already have my book “Complete the Art of Investing” and/or “Profit in bull, bear and sideway markets”, there is no need for other books except sending this link to your friends.

My best sellers (Profit from bull, Swing, Sector Rotation, Momentum and Complete the Art of Investing) usually have no promotion as they are low-priced already. Free books and the priced-reduced books are Kindle versions only. If the reader finds the book useful, s/he can buy the full version or “Complete the Art of Investing” which has 920 pages (6*9) and/or “Profit from bull, bear and sideways markets” which is a combination of several books on sector rotation and momentum investing.

Most have printed copies. Check out Amazon’s policy. Amazon’s “match” gives you a low-cost (free for my books) of the Kindle version when you buy the printed version. To me, the royalties of the print copy and the Kindle version are about the same. The price difference is the cost of paper. There are many advantages of reading printed books such as making notes and underlining. Most versions are identical with the exception of “Complete the Art of Investing” that has 600 pages.

It is harder to read my investing books than others as they are full of information and techniques. Most have been proven. However they may not work in today’s market as all markets are different. I encourage the readers to try them out via paper testing.

If you do not have any of my travel books, download a free one as offered. It includes how to plan and save your vacation plus my planning worksheet and some basic photo tips.

Check out some books are 30 pages and have the best rating. If they are not written precisely and in gold, the reviews most likely were written by their friends. As of 02/2018, I do not know any reviewers before they wrote the reviews and all book profits are donated to charities.

Click the book name if available to access to more info in Amazon.com. Alternatively, type the name of the book in Amazon.com.  The following are subject to change without notice.

Books (Kindle version only & printed books may also be available)	List Price	Promotion Price	Discount	From	End on
Jinzhaigou, The Chinese Yosemite	$2.99	Free	100%	4/05	4/09
Finding stocks – Concise Edition	$2.99	Free	100%	4/03	4/07
Profit vis ETFs	$2.99	Free	100%	4/12	4/16
Art of Investing: Advices	$2.99	Free	100%	4/26	4/30
Art of Investing: Finding stocks		$0.99	67%	4/22	4/29
Art of Investing: Evaluate stocks		$0.99	67%	4/07	4/14
Art of Investing: Strategies		$1.99	61%	4/20	4/27
Penny stocks		$0.99	84%	4/23	4/30
Investing lessons		$0.99	84%	4/05	4/12
Buy Low, Sell High		$0.99	67%	4/13	4/20
Investing for beginners	$0.99	$0.99		Now	Eternity
My best sellers:					Size3
Complete the Art of Investing1	$9.99		Already	discounted	920
Profit from Coming Market Crash	$7.95		Already	discounted	265
Profit from bull, bear and sideway markets4	$9.95		Already	discounted	400
Swing Investing 4rd Edition2	$9.95		Already	discounted	350
Sector Rotation 3rd Edition	$8.95		Already	discounted	295
ETF Rotation for Couch Potatoes	$8.50		Already	discounted	150
Momentum Investing. 2nd Edition	$6.95		Already	discounted	240

¹ If you have my book for over a year, it is time to upgrade the book.

² This book has all the basic articles in Sector and Momentum. If you are into these two strategies, buy this book as it has several chapters not found in Complete the Art of Investing.

³ 6*9 and Kindle version. Same sizes for printed version with the exception of “Complete the Art of Investing”.

⁴ This book has all articles in Swing Trading: Sector, Momentum and ETF Rotation plus a new price-based strategy. Best buy over all swing books. The hard copy is more expensive due to the expensive paper cost.

Some of the list prices or book names may be wrong but the discount percentages should be fine.