I will be back after my college exams in 1 week's time. Really sorry about this.
Thanks Thanks
Jin
Wednesday, April 15, 2009
Thursday, February 19, 2009
Why I'm Buying Gold at $1000
To sum up everything into one line, "The Time is here."
This will be the first time I'm buying a future contract. I am going to all-in gold with all the profits I made through shorting the HSI last july. Readers of my blog will know that I do not believe in diversification. It is crap in my opinion. As I always emphasize, put all your eggs into one basket and watch your basket.
De-coupling from Oil, Dollar....
Strangely enough, gold has somewhat decoupled from everything. Other than the fact that when the market is down, gold price rises, it simply ignores the movement in oil and US dollar. I feel that this is a sign - a sign of gold bull market. It is a sign of all bull markets. Ignore everything and sky rocket. It will of cos end in a bubble like manner but before it ends, there is so much money to be made.
But... Is it a bubble forming?
Some may argue that this is a bubble forming. As always, I face lots of funny opposition when I give some crazy thoughts about the market. But it is only at 7-8mth high.
Lets reflect on some bubbles we see before.
1. China Market - more than 100% for two yrs. PE at 90. Bubble? Yes
2. Dot Com - similar to china market
3. Housing bubble - subprime
4. Possible bond bubble - lowest yields last seen 40 yrs back.
You make the call. =)
Gold At $1000
Magic number 1000. We have seen that happening for oil before. Gold has to close above $1000. The close on friday was not at $1000. But believe me, it will be there soon. Real soon. It may even be next week for all we know.
Conclusion: I have talked about the reasons about gold before. I believe that you should be opened to many assets as well. I'm buying gold at $1000, are you?
This will be the first time I'm buying a future contract. I am going to all-in gold with all the profits I made through shorting the HSI last july. Readers of my blog will know that I do not believe in diversification. It is crap in my opinion. As I always emphasize, put all your eggs into one basket and watch your basket.
De-coupling from Oil, Dollar....
Strangely enough, gold has somewhat decoupled from everything. Other than the fact that when the market is down, gold price rises, it simply ignores the movement in oil and US dollar. I feel that this is a sign - a sign of gold bull market. It is a sign of all bull markets. Ignore everything and sky rocket. It will of cos end in a bubble like manner but before it ends, there is so much money to be made.
But... Is it a bubble forming?
Some may argue that this is a bubble forming. As always, I face lots of funny opposition when I give some crazy thoughts about the market. But it is only at 7-8mth high.
Lets reflect on some bubbles we see before.
1. China Market - more than 100% for two yrs. PE at 90. Bubble? Yes
2. Dot Com - similar to china market
3. Housing bubble - subprime
4. Possible bond bubble - lowest yields last seen 40 yrs back.
You make the call. =)
Gold At $1000
Magic number 1000. We have seen that happening for oil before. Gold has to close above $1000. The close on friday was not at $1000. But believe me, it will be there soon. Real soon. It may even be next week for all we know.
Conclusion: I have talked about the reasons about gold before. I believe that you should be opened to many assets as well. I'm buying gold at $1000, are you?
Thursday, February 5, 2009
Polar Bear
I feel that this is not a bear market.
This is a polar bear market!!!
Polar bears are carnivorous unlike a normal bears which are omnivorous. Polar bears are also the largest land predators. I find this pretty funny. What I'm trying to do here is to emphasize that this is not a normal bear market. It is a polar bear market where your environment is going to be like winter, where the polar bear will be hunting for you. Apparently, all the seals are gone now. LOL to put it in financial terms, it will be one of the worst bear market that really destroys bulk of the wealth in the world.
Again, I see no value in stocks. The economy is horrible. There is a reason why the top 5 hedge fund managers shorted the whole fiasco that we are facing. They understand the economy and there is a reason why Warren Buffett is buying into Swiss francs. Come on, I have emphasized this over and over again. Buffett years will take a very long time to come.
But jokes aside, I was looking at some stuffs and remembering how the market was going. I feel that it is very bad. Descending triangle at a very deadly level of 8000 is not a very good omen in my opinion. All the rallies have been killed lately and we should all know why.
The lost decade for the world. Sounds apt for current situation? Welcome to the new polar bear market.
This is a polar bear market!!!
Polar bears are carnivorous unlike a normal bears which are omnivorous. Polar bears are also the largest land predators. I find this pretty funny. What I'm trying to do here is to emphasize that this is not a normal bear market. It is a polar bear market where your environment is going to be like winter, where the polar bear will be hunting for you. Apparently, all the seals are gone now. LOL to put it in financial terms, it will be one of the worst bear market that really destroys bulk of the wealth in the world.
Again, I see no value in stocks. The economy is horrible. There is a reason why the top 5 hedge fund managers shorted the whole fiasco that we are facing. They understand the economy and there is a reason why Warren Buffett is buying into Swiss francs. Come on, I have emphasized this over and over again. Buffett years will take a very long time to come.
But jokes aside, I was looking at some stuffs and remembering how the market was going. I feel that it is very bad. Descending triangle at a very deadly level of 8000 is not a very good omen in my opinion. All the rallies have been killed lately and we should all know why.The lost decade for the world. Sounds apt for current situation? Welcome to the new polar bear market.
Wednesday, January 28, 2009
Forest Fire
What should the smart people do regarding the financial system?
This is a burning question that everyone has in their minds. Is bailout good? Jim Rogers and Austrians alike will say no. I will throw you the word unknowledge. Majority of the people (I guess) will say that if we don't bail them out, we will suffer badly (whatever).
So I was talking to this teacher today and I explained to him about my forest fire analogy. He was mentioning to me that actually people do try to stop forest fires. They will burn down a ring of trees that is further away from the main fire. This isolate the inner burning trees and also prevent them from spreading to the good trees outside. Perfect sense!
I thought that this was pretty awesome. Two things that we can draw here.
1. Identify the end of the bulk of dry leaves.
2. Burn them first.
But by doing this, you need to hit yourself at the back of your head and say: you can't stop the fire that is burning now. This has always been my line of thought. But I guess it is easy to say but difficult to believe in.
Identifying the end of the whole bulk mess is also another difficult task. I mean, what are the good banks/financial institutions left? I really don't know. Hopefully someone can enlighten me. Maybe Lazard Frères & Co will rise to the top of the industry again.
Burning down a ring of weaker trees is also another tricky question. How to burn banks? I suppose you have to let some go bankrupt.
But ultimately, to fight against a super huge fire, you have to use fire. I know this sounds freaking fuzzy, but it's pretty cool isn't it? Common sense tells you to use water but during a super huge fire, where do you find the huge supply of water?
Desperate times call for desperate measures. Use fire against fire. I like it.
This is a burning question that everyone has in their minds. Is bailout good? Jim Rogers and Austrians alike will say no. I will throw you the word unknowledge. Majority of the people (I guess) will say that if we don't bail them out, we will suffer badly (whatever).
So I was talking to this teacher today and I explained to him about my forest fire analogy. He was mentioning to me that actually people do try to stop forest fires. They will burn down a ring of trees that is further away from the main fire. This isolate the inner burning trees and also prevent them from spreading to the good trees outside. Perfect sense!
I thought that this was pretty awesome. Two things that we can draw here.
1. Identify the end of the bulk of dry leaves.
2. Burn them first.
But by doing this, you need to hit yourself at the back of your head and say: you can't stop the fire that is burning now. This has always been my line of thought. But I guess it is easy to say but difficult to believe in.
Identifying the end of the whole bulk mess is also another difficult task. I mean, what are the good banks/financial institutions left? I really don't know. Hopefully someone can enlighten me. Maybe Lazard Frères & Co will rise to the top of the industry again.
Burning down a ring of weaker trees is also another tricky question. How to burn banks? I suppose you have to let some go bankrupt.
But ultimately, to fight against a super huge fire, you have to use fire. I know this sounds freaking fuzzy, but it's pretty cool isn't it? Common sense tells you to use water but during a super huge fire, where do you find the huge supply of water?
Desperate times call for desperate measures. Use fire against fire. I like it.
Thursday, January 22, 2009
Mysterious Gold
I really like this bunch of people. Do check out here to know about them. I will provide a short write up about them though.
Basically, there is this group of people who went into research on gold deposits all over the world. They ask lots of questions about gold to authorities but are constantly rejected all the time with fuzzy answers.
So the story of the mysterious gold goes like this.
1. Central banks are holding lots of gold.
2. You don't earn money holding gold. So you loan them out.
3. You loan at 1% interest to banks called bullion banks.
4. They borrow these gold and sell them to get cash and buy bonds that gives them 5% interest rates against their 1% loan payable (accounting!!)
5. Yup, these gold are what we wear on the street.
6. But they have to manage their risk properly against gold price so they have to hedge by buying some gold futures.
7. Well, step no.6 is an ideal scenario. Humans being humans, like to try funny stuffs. We see them all the time.
8. Basically, there are many more reasons. But I only find one that is particularly interesting. The authorities are not very transparent about gold lending activities. They don't reveal the figures.
9. From this, there is a possible double counting error. Banks will count that they are still owning the gold. The market people will count the amount of gold they have when in actual fact, these gold are the mysterious gold that are supposed to stay in the vaults. Get what I mean?
10. However, so what if this is true? It could be my next life time because the truth is out. This is very important. It is exactly this situation that make me think for quite some time and I think I can see the picture now. My inspiration comes from Bank of England. Sterling pound is dead. But does that mean that US dollar will be good? If not, then what will be good?
I think the world currencies will be in a mess. No one will like any currency in my honest opinion. Everyone will look back at gold and this is when the shortage will be realised by the whole world because demand is going to drive the truth out and it will be an upward spiral.
Hope this doesn't sound like any self fulfilling prophecies. I just feel that such stuffs make sense to me.
Basically, there is this group of people who went into research on gold deposits all over the world. They ask lots of questions about gold to authorities but are constantly rejected all the time with fuzzy answers.
So the story of the mysterious gold goes like this.
1. Central banks are holding lots of gold.
2. You don't earn money holding gold. So you loan them out.
3. You loan at 1% interest to banks called bullion banks.
4. They borrow these gold and sell them to get cash and buy bonds that gives them 5% interest rates against their 1% loan payable (accounting!!)
5. Yup, these gold are what we wear on the street.
6. But they have to manage their risk properly against gold price so they have to hedge by buying some gold futures.
7. Well, step no.6 is an ideal scenario. Humans being humans, like to try funny stuffs. We see them all the time.
8. Basically, there are many more reasons. But I only find one that is particularly interesting. The authorities are not very transparent about gold lending activities. They don't reveal the figures.
9. From this, there is a possible double counting error. Banks will count that they are still owning the gold. The market people will count the amount of gold they have when in actual fact, these gold are the mysterious gold that are supposed to stay in the vaults. Get what I mean?
10. However, so what if this is true? It could be my next life time because the truth is out. This is very important. It is exactly this situation that make me think for quite some time and I think I can see the picture now. My inspiration comes from Bank of England. Sterling pound is dead. But does that mean that US dollar will be good? If not, then what will be good?
I think the world currencies will be in a mess. No one will like any currency in my honest opinion. Everyone will look back at gold and this is when the shortage will be realised by the whole world because demand is going to drive the truth out and it will be an upward spiral.
Hope this doesn't sound like any self fulfilling prophecies. I just feel that such stuffs make sense to me.
Monday, January 19, 2009
Oil 101
I didn't have much time to write a lengthy one. But I think talking about oil is pretty important today. I remember my friend asking me to buy oil right now because he thinks that oil is cheap. I feel that there is a lot more into what's going on in the market and the oil story is pretty complicated.
My logic for oil is pretty simple. I always advocate on understanding the general environment (environmental analysis... whatever).
In my opinion, if no one likes oil, oil will not go up. No matter what's the fundamentals are like now. Of course, in the long run, people will begin to realise its fundamentals that's why most people like to buy and hold as long as they get the big picture right. In addition, people are ignoring the supply side in my opinion. Oil looks freaking cheap (not to me though)!!! But let's not anchored our mind on $140 a year ago. There are few things to look out for.
1. A good huge selling of oil. It will be great if oil hits $20.
2. The next time it crosses $50, it is time to buy oil. I have no doubt for this. Just that it might take some time before it crosses $50.
3. To some extent, I feel that Treasury bubble has to burst first before oil will come into play. Of course, don't forget that I'm a very faithful gold bug.
Speaking of gold, I shall talk about gold lending activites during mid week post.
My logic for oil is pretty simple. I always advocate on understanding the general environment (environmental analysis... whatever).In my opinion, if no one likes oil, oil will not go up. No matter what's the fundamentals are like now. Of course, in the long run, people will begin to realise its fundamentals that's why most people like to buy and hold as long as they get the big picture right. In addition, people are ignoring the supply side in my opinion. Oil looks freaking cheap (not to me though)!!! But let's not anchored our mind on $140 a year ago. There are few things to look out for.
1. A good huge selling of oil. It will be great if oil hits $20.
2. The next time it crosses $50, it is time to buy oil. I have no doubt for this. Just that it might take some time before it crosses $50.
3. To some extent, I feel that Treasury bubble has to burst first before oil will come into play. Of course, don't forget that I'm a very faithful gold bug.
Speaking of gold, I shall talk about gold lending activites during mid week post.
Tuesday, January 13, 2009
A Mind Of Its Own
These few days I have been talking to some professors regarding some macro economics of today and in particular about commodities market. As usual when I talk about commodities market, I will mention Jim Rogers stand and seek the professor opinion. I hold a high opinion for this professor though.
Professor R said, "I'm not trying to be arrogant, but in my opinion, Jim Rogers is at most beginner level in the economics scholarly realm."
I like this statement a lot. At least he has a stand and is willing to stand against a professional in the finance industry or at least on wall street. The reply for me is way too easy. I could have just said, "Well, he is a billionaire?" But I didn't. I began to think about it and I totally agree with this statement. It might just be true that Jim Rogers is a newbie at economics (scholarly level).
I think through a lot and I reflect back on what I have learnt about this market. Stock market is not just any market where you trade stuffs. It has a mind of its own. Ben Graham calls it Mr. Market. I call it Mr. WTH (just kidding). In a way, how often have we seen the fact that the market is diverging away from its fundamentals for no reason. I got burnt badly trying to short a market that is simply shooting the roof back then in september even when all economic data fall within my expectation.
Dot com had a mind of its own. Housing had a mind of its own. All economists will tell you that it should not happen. Greenspan did it, Ben Bernanke did it. They are all great economists in the world but they can't explain certain things in the market. In addition, Noble prize winners failed with LTCM because the market stays irrational way longer than they can stay solvent.
I am not saying that we should throw away our economics knowledge. I want to emphasize to you that you have to always remember economics is economics and stock market is stock market. They are two different things that we are talking here and they don't go hand in hand usually.
Because
You will always see things like "News are freaking bad, Market goes up 2 percent."
Professor R said, "I'm not trying to be arrogant, but in my opinion, Jim Rogers is at most beginner level in the economics scholarly realm."
I like this statement a lot. At least he has a stand and is willing to stand against a professional in the finance industry or at least on wall street. The reply for me is way too easy. I could have just said, "Well, he is a billionaire?" But I didn't. I began to think about it and I totally agree with this statement. It might just be true that Jim Rogers is a newbie at economics (scholarly level).
I think through a lot and I reflect back on what I have learnt about this market. Stock market is not just any market where you trade stuffs. It has a mind of its own. Ben Graham calls it Mr. Market. I call it Mr. WTH (just kidding). In a way, how often have we seen the fact that the market is diverging away from its fundamentals for no reason. I got burnt badly trying to short a market that is simply shooting the roof back then in september even when all economic data fall within my expectation.
Dot com had a mind of its own. Housing had a mind of its own. All economists will tell you that it should not happen. Greenspan did it, Ben Bernanke did it. They are all great economists in the world but they can't explain certain things in the market. In addition, Noble prize winners failed with LTCM because the market stays irrational way longer than they can stay solvent.
I am not saying that we should throw away our economics knowledge. I want to emphasize to you that you have to always remember economics is economics and stock market is stock market. They are two different things that we are talking here and they don't go hand in hand usually.
Because
You will always see things like "News are freaking bad, Market goes up 2 percent."
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