Dubai probably the most frequent used word for the past week. 60 Billion dollar of default sink the stock markets all over the world. Everybody feel fear among us and seller absolutely dominated trading.
I am not gonna commend on Dubai. It's only 60 billion dollar. It's less than one third of what AIG received last year (185 Billion). It's only 10% of the first TARP last year (600 Billion). I bet it's even less than the bonus and remuneration that bankers all over the world received last year combined.
Dubai default is so small that a tips from Rockefellers or Rothschilds at dinner might be bigger than it.
Dubai is very similar to "Sub-Prime" in late 2006 or early 2007. By the way do you still remember the word "sub-prime"?
The word sub-prime emerged at the end of 2006 and it's a warning sign that the financial system in the world is in big problem. At first it's not seen as a threat by investors all over the world. However by February of 07 people start to realize the problem but ignorance and greedy trader continue to buy and pushed the market to the high of Oct / Nov 2007.
Remember, sub-prime crisis does not kill the stock market at the end of 07. It work as a trigger to this massive financial mess that we are in. Similar situation happen now. I am sure Dubai default won't kill the stock market. It's a big warning sign that we haven't solve our financial problem and it's still a mess.
So will stock market continue higher in the short term? might be yes (just like in 2007) or no. The point is: it doesn't matter. Stock market did make a new high at Oct of 2007 (US and Europe market) and Nov of 2007 (Asian and South America market) when the big warning sign was around. Well look what happen next......
So the best way I can put the mess we encounter now is this: US financial system = HIV positive. AIDS won't kill US but it kill its defense. It weaken the system and allowed any disease to attack it. Dubai default is just a small flu or fever yet it manage to shake us heavily. Wait till it get TB or cancer. Unfortunately AIDS is incurable but fortunately it can be delayed so we shall see how Bernanke, Geithner and the gang delay it but the day will eventually come. Until then, enjoy the healthy day!
30.11.09
21.11.09
Ireland vs France: Forget It, Ireland
I am sure one of the headline at sport column since last week has to be Ireland vs France world cup qualifying match second leg. We all seen the replay and the clear hand ball by Thierry Henry.
FIFA yesterday dismissed the Football Association of Ireland (FAI) for a rematch.
To be brutally honest, i agree with FIFA. The decision of referee is final. Ireland and France knew it before the match started. I don't think Ireland will agree for a rematch it happen the other way. Rule is rule. If you don't agree with it, don't take part.
Throughout history, we have seen some even more ridiculous and controversial decision in sport. England football team won the 1966 world cup with a goal that never went in. Argentina won the quarter final football match of 1986 world cup with the "hand of god" and eventually won the world cup. Who can forget the 1972 Olympics basketball gold medal match between Soviet Union and USA where referee virtually gave Soviet Union second chance and they took it.
More recently, Dallas Maverick lose to Denver Nuggets at last year NBA playoff Western Conference Semi Final as all 3 referees didn't see the foul that committed by Mavs. Shogun Maricio Rua clearly beat Lyoto Machida at UFC 104 but all 3 judges gave Machida the win. Defending world champion Italy won the quarter final of 2006 world cup against Australia with a dodge from Fabio Grosso.
The truth of the matter is this: you live by the rule if you decide to take part. Otherwise don't participate. This is the thing that make sport exciting and unpredictable. I guest West Germany can call for a rematch for the 1966 world cup if FIFA allow a rematch between Ireland and France.
FIFA yesterday dismissed the Football Association of Ireland (FAI) for a rematch.
To be brutally honest, i agree with FIFA. The decision of referee is final. Ireland and France knew it before the match started. I don't think Ireland will agree for a rematch it happen the other way. Rule is rule. If you don't agree with it, don't take part.
Throughout history, we have seen some even more ridiculous and controversial decision in sport. England football team won the 1966 world cup with a goal that never went in. Argentina won the quarter final football match of 1986 world cup with the "hand of god" and eventually won the world cup. Who can forget the 1972 Olympics basketball gold medal match between Soviet Union and USA where referee virtually gave Soviet Union second chance and they took it.
More recently, Dallas Maverick lose to Denver Nuggets at last year NBA playoff Western Conference Semi Final as all 3 referees didn't see the foul that committed by Mavs. Shogun Maricio Rua clearly beat Lyoto Machida at UFC 104 but all 3 judges gave Machida the win. Defending world champion Italy won the quarter final of 2006 world cup against Australia with a dodge from Fabio Grosso.
The truth of the matter is this: you live by the rule if you decide to take part. Otherwise don't participate. This is the thing that make sport exciting and unpredictable. I guest West Germany can call for a rematch for the 1966 world cup if FIFA allow a rematch between Ireland and France.
16.11.09
WCG 2009 or WCG 1999?
I am a big fans of video game. I started playing video game (NES) when i was 5. Mario, Donkey Kong and Link pretty much filled my childhood.
WCG or world cyber games was created in 2001 and South Korea was the host nation for the WCG 2001 tournament. Since then, WCG kick off as the biggest and greatest video game tournament in the world. It's called "Olympics of video games"
In 2001, 6 games were selected. AOE 2, Starcraft, Fifa world cup, Counter Strike, UT and Quake 3. All those games are appropriate and great at the time.
However, if you can believe it, 3 of those games are still here at WCG 2009 which is Starcraft, CS and Fifa. Luckily Fifa world cup is changed to fifa 2009 but the other 2: starcraft and CS is still here. Then in 2003, warcraft 3 was added into WCG and guest what, it is still here. Luckily we have track mania, guitar hero and VF 5 to save the day.
So back to the topic of this article, are we in 2009 or 1999? is WCG in 2009 or 1999. Are we in the twenty first century yet?
Starcraft is a 11 years old game (released in March 1998 and its expansion, Brood war released in November 1998) and Counter Strike is a 10 years old mod (created in 1999) based on a 11 years old game (half life). Although Warcraft 3 was a 2002 game and its expansion, The Frozen Throne, released in 2003, the graphic element in this game is poor and cartoon-like.
This 3 games feel and look like twentieth century and nowhere near twenty first century. We got simply tons of games that play just as well as those 3 games but way better in graphic and sound element and would simply make the WCG experience that much better.
Starcraft and Warcraft 3 are RTS game. We got World in conflicts, Company of Heroes, Command and Conquer 3 and Red Alert 3, Medieval 2 Total war, Supreme Commander, Sins of Solar empire. I believe all of them play just as great as those 2 but have much better graphic, realism and experience.
As for Counter strike, I can name dozens of great FPS game that is much better than CS either in graphic, sound and even game play. Crysis, call of duty (all of them, especially modern warfare) Gears of war, Medal of Honour (all of them, especially airborne), Brothers in Arms (all of them), Battlefield series (all of them), Dooms 3, UT 2007, Quake 4, Halo (available in pc remember), Rainbow Six (4, Lockdown and vegas), Ghost Recon 2, and the list just continues......
Computer hardware and software nowadays let us know we are in 2009 and not 1999, the game installed in our PC let us know we are in 2009 and not 1999, the calender of the wall let us know we are in 2009 and not 1999. I hope WCG will let us know it is the year 2009 and not 1999.
P/S: No offense for CS, Warcraft 3 and Starcraft fans but you need to move on and look at games in the present and future, not past.
WCG or world cyber games was created in 2001 and South Korea was the host nation for the WCG 2001 tournament. Since then, WCG kick off as the biggest and greatest video game tournament in the world. It's called "Olympics of video games"
In 2001, 6 games were selected. AOE 2, Starcraft, Fifa world cup, Counter Strike, UT and Quake 3. All those games are appropriate and great at the time.
However, if you can believe it, 3 of those games are still here at WCG 2009 which is Starcraft, CS and Fifa. Luckily Fifa world cup is changed to fifa 2009 but the other 2: starcraft and CS is still here. Then in 2003, warcraft 3 was added into WCG and guest what, it is still here. Luckily we have track mania, guitar hero and VF 5 to save the day.
So back to the topic of this article, are we in 2009 or 1999? is WCG in 2009 or 1999. Are we in the twenty first century yet?
Starcraft is a 11 years old game (released in March 1998 and its expansion, Brood war released in November 1998) and Counter Strike is a 10 years old mod (created in 1999) based on a 11 years old game (half life). Although Warcraft 3 was a 2002 game and its expansion, The Frozen Throne, released in 2003, the graphic element in this game is poor and cartoon-like.
This 3 games feel and look like twentieth century and nowhere near twenty first century. We got simply tons of games that play just as well as those 3 games but way better in graphic and sound element and would simply make the WCG experience that much better.
Starcraft and Warcraft 3 are RTS game. We got World in conflicts, Company of Heroes, Command and Conquer 3 and Red Alert 3, Medieval 2 Total war, Supreme Commander, Sins of Solar empire. I believe all of them play just as great as those 2 but have much better graphic, realism and experience.
As for Counter strike, I can name dozens of great FPS game that is much better than CS either in graphic, sound and even game play. Crysis, call of duty (all of them, especially modern warfare) Gears of war, Medal of Honour (all of them, especially airborne), Brothers in Arms (all of them), Battlefield series (all of them), Dooms 3, UT 2007, Quake 4, Halo (available in pc remember), Rainbow Six (4, Lockdown and vegas), Ghost Recon 2, and the list just continues......
Computer hardware and software nowadays let us know we are in 2009 and not 1999, the game installed in our PC let us know we are in 2009 and not 1999, the calender of the wall let us know we are in 2009 and not 1999. I hope WCG will let us know it is the year 2009 and not 1999.
P/S: No offense for CS, Warcraft 3 and Starcraft fans but you need to move on and look at games in the present and future, not past.
15.11.09
Luck in Football
I wanna talk about sport (as my blog name suggest, sport and stock) especially football (or soccer in US).
Few weeks ago, i watched Chelsea beat Manchester United 1-0 at Stanford Bridge. A day after that, sport media around the world were flooded with reports saying Chelsea were lucky, MU should win etc. Columnist around the world commented about Chelsea were lucky to get the win.
I remember May this year, most football fans said Barcelona were lucky in their Uefa Champions' League clash with Chelsea. Then Later some people even said Barcelona were lucky to win the UCL (although Barcelona dominated the whole match and beat MU fair and square).
People, you need to understand this: football match is determined by no. of goal and only no. of goal. It doesn't matter if a team dominate 95% of playing time, have 100 attempts on goal or 50 corner kicks. If you can't score, you can't win. So i can't see what's the connection between controlling a football game and winning the game.
Although MU did manage to control the match against Chelsea, they did not manage to score so the most they can hope for was a draw. Chelsea on the other hand did manage to score so they deserve the win. It doesn't matter if Chelsea goal should be allowed or not. If referees said yes, then it's a goal.
Similar situation for Chelsea vs Barcelona match. Yes Chelsea did manage to control the whole match and scored a goal. However they can't maintain the lead all the way to the end and Barca equalized at the very end. Iniesta goal was a very beautiful goal so instead of saying Barca were lucky, how bout saying Barca finishing touch was superb.
Simple example: no matter how many time resources a student allocate to an exam, if the student can't write the correct answer, he will fail.
So there is no luck in football, there are finishing touch and goal. These are the essence of winning in football
Few weeks ago, i watched Chelsea beat Manchester United 1-0 at Stanford Bridge. A day after that, sport media around the world were flooded with reports saying Chelsea were lucky, MU should win etc. Columnist around the world commented about Chelsea were lucky to get the win.
I remember May this year, most football fans said Barcelona were lucky in their Uefa Champions' League clash with Chelsea. Then Later some people even said Barcelona were lucky to win the UCL (although Barcelona dominated the whole match and beat MU fair and square).
People, you need to understand this: football match is determined by no. of goal and only no. of goal. It doesn't matter if a team dominate 95% of playing time, have 100 attempts on goal or 50 corner kicks. If you can't score, you can't win. So i can't see what's the connection between controlling a football game and winning the game.
Although MU did manage to control the match against Chelsea, they did not manage to score so the most they can hope for was a draw. Chelsea on the other hand did manage to score so they deserve the win. It doesn't matter if Chelsea goal should be allowed or not. If referees said yes, then it's a goal.
Similar situation for Chelsea vs Barcelona match. Yes Chelsea did manage to control the whole match and scored a goal. However they can't maintain the lead all the way to the end and Barca equalized at the very end. Iniesta goal was a very beautiful goal so instead of saying Barca were lucky, how bout saying Barca finishing touch was superb.
Simple example: no matter how many time resources a student allocate to an exam, if the student can't write the correct answer, he will fail.
So there is no luck in football, there are finishing touch and goal. These are the essence of winning in football
13.11.09
Nominal and Real
Let me start by asking you a question: if a stock that usually traded at around 10.00 now trading at 0.50, is that stock cheap?
I did a survey and asked 150 people that involve in stock market and guest what, 112 of them immediately say yes, it's cheap and they want to know the name of the stock so that they can buy it. 27 of them say depend on occasion and the stock itself and 11 of them say they won't touch this kinda stock.
Well, 75% of my sample think the stock is cheap without even know the name of the stock and other information about it.
That's what i mean in this article, most of us tend to look at nominal value and ignore real value. Real value in economic means adjusted value (usually inflation adjusted). Most of us do not care about real value of an asset as long as we get higher nominal value.
This kind of thought lead to those 75% of people think a stock that usually traded at around 10.00 is cheap at 0.50. However in reality, 0.50 may not be cheap if it's adjusted.
Even professional stockbrokers are doing the same thing. They recommend stock based on nominal value. They don't even find the real value of a stock adjusted to inflation, earning or earning per share. (if you don't believe me, try ask them!!!)
Similarly, the high of 14000 for Dow in Oct 2007 is just a nominal value, if we adjusted with US dollar, we can see that the real value of Dow adjusted using USD is well below the 2001 level. Here are the video done by Don Harrold on Youtube
If we study the topic more, we can see that strong rise in precious metal is caused by severe drop in USD and not other currency. The Gold / Euro value is still below it's high at March of 2008. In other word, Gold's nominal value is rising (as gold is in USD denominated) but its real value is stagnant. So next time you wanna buy share of gold stock, think again.
In conclusion, nominal value of an asset is useless. If you can't get the real value of an asset, don't say it's cheap!
I did a survey and asked 150 people that involve in stock market and guest what, 112 of them immediately say yes, it's cheap and they want to know the name of the stock so that they can buy it. 27 of them say depend on occasion and the stock itself and 11 of them say they won't touch this kinda stock.
Well, 75% of my sample think the stock is cheap without even know the name of the stock and other information about it.
That's what i mean in this article, most of us tend to look at nominal value and ignore real value. Real value in economic means adjusted value (usually inflation adjusted). Most of us do not care about real value of an asset as long as we get higher nominal value.
This kind of thought lead to those 75% of people think a stock that usually traded at around 10.00 is cheap at 0.50. However in reality, 0.50 may not be cheap if it's adjusted.
Even professional stockbrokers are doing the same thing. They recommend stock based on nominal value. They don't even find the real value of a stock adjusted to inflation, earning or earning per share. (if you don't believe me, try ask them!!!)
Similarly, the high of 14000 for Dow in Oct 2007 is just a nominal value, if we adjusted with US dollar, we can see that the real value of Dow adjusted using USD is well below the 2001 level. Here are the video done by Don Harrold on Youtube
If we study the topic more, we can see that strong rise in precious metal is caused by severe drop in USD and not other currency. The Gold / Euro value is still below it's high at March of 2008. In other word, Gold's nominal value is rising (as gold is in USD denominated) but its real value is stagnant. So next time you wanna buy share of gold stock, think again.
In conclusion, nominal value of an asset is useless. If you can't get the real value of an asset, don't say it's cheap!
11.11.09
Let's Not Forget What is Investment
Just an update: I am a bear now and have been a bear since July of this year. I still think market will come crashing down once this fake and unrealistic rally since March end. Market will revisit March 2009 low at some point in 2010.
This article is all about investment in stock market. I think many investors nowadays forget or rather don't know when and why stock market was created for. Almost every country has its own stock exchange and some has more than 1.
If i am not mistaken, stock market was created in the 13th century in Europe for debt trading. It helps company to manage their debt and risk.
Then stock market evolved to a place for public to buy and sell shares as secondary market. Company who wanted to raise money and capital can sell shares to public through stock market and public can join the ownership by buying company's share. During that time, investment and stock market were becoming one. Buying and selling shares was called investment.
However, stock market today has evolved to a strange place. People no longer look at share as a ownership of a company. They look at it as a product. Stock market is no longer a place to invest in good company, but rather become a place to arbitrage their products.
Yes Arbitrage. Since more than 90% of people trading shares is looking for a profit by arbitrage (sell at higher price for profit) and not ownership of a company. So, shares of Jp Morgan Chase and Bank of Yesterday (US smallest bank by asset) have no different. They are just financial products. People will threat them the same as long as both can generate arbitrage profit. This is why share analysis report by financial institution always provide target price for you to sell.
This is also why we can't have more "Warren Buffett" in stock market. The answer is very simple: very few people nowadays invest in company share to become a shareholders. Many analysis has been done to explain why we can't have second "Warren Buffett", for me the answer is simple, nobody wants to hold share of company forever as part owner, they only wants to sell it when it has good value.
So next time when you wanna buy / sell something like Bank of Yesterday, you are becoming its owner!
This article is all about investment in stock market. I think many investors nowadays forget or rather don't know when and why stock market was created for. Almost every country has its own stock exchange and some has more than 1.
If i am not mistaken, stock market was created in the 13th century in Europe for debt trading. It helps company to manage their debt and risk.
Then stock market evolved to a place for public to buy and sell shares as secondary market. Company who wanted to raise money and capital can sell shares to public through stock market and public can join the ownership by buying company's share. During that time, investment and stock market were becoming one. Buying and selling shares was called investment.
However, stock market today has evolved to a strange place. People no longer look at share as a ownership of a company. They look at it as a product. Stock market is no longer a place to invest in good company, but rather become a place to arbitrage their products.
Yes Arbitrage. Since more than 90% of people trading shares is looking for a profit by arbitrage (sell at higher price for profit) and not ownership of a company. So, shares of Jp Morgan Chase and Bank of Yesterday (US smallest bank by asset) have no different. They are just financial products. People will threat them the same as long as both can generate arbitrage profit. This is why share analysis report by financial institution always provide target price for you to sell.
This is also why we can't have more "Warren Buffett" in stock market. The answer is very simple: very few people nowadays invest in company share to become a shareholders. Many analysis has been done to explain why we can't have second "Warren Buffett", for me the answer is simple, nobody wants to hold share of company forever as part owner, they only wants to sell it when it has good value.
So next time when you wanna buy / sell something like Bank of Yesterday, you are becoming its owner!
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