SOS Two schools of thoughts

The two major schools of thoughts in Economics are:

1. Hyperinflationist
2. Deflationist

Both is actually right, it is a matter of timing. The Hyperinflationist says it is going to happen soon (1-3 years). The Deflationist says deflation is going to happen first i.e. 1-3 years, then only Hyperinflation will come much later 3-5 years from now. Their differences actually arises from the following:

1. printing of money
2. evaporation of credit

The deflationist is of the view of the evaporation of credit is much faster pace than the printing of money or creation on new credit. The school of hyperiflationist: Jim Rogers Peter Schiff Marc Faber The school of deflationist: Robert Prechter
Gary Shillings Steve Keen Mike Shedlock Hence, the investment strategy should be OPPOSITE for both schools of economists. MyView Robert Prechter and Gary Shillings and Steve Keen views are more convincing because the DEBT level from conventional housing and commercial loans as well as derivatives is far larger than the Government can handle from printing of money i.e. the implosion of bad debts is far greater than the printing of new money. On top of that, one has to acknowledge the following that drives the economy:

1. changes in unemployment level
2. consumptions capacity (depends on household debt level & unemployment)
3. prices level of housing (long term) and commercial properties
4. changes of bad debt for derivatives

Should the above four factors cannot improve on a SUSTAINABLE level, we can conclude that DEFLATION will come first and Hyperinflation will sets it many years later.

SOS Economic Behavior

the lower the price the lower the demand, the higher the price the higher the demand

no wonder it is always the 90% that lose their money

this is what Robert Prechter believe;

when the US dollar appreciate (the loan become bad far exceed new credit created)

the following will happen

• crude oil will drop
• precious metals will drop
• agricuture commodities will drop
• stocks will drop
• property prices will drop

Thanks to the near zero interest funding, most of the cash went into the above assets classes. when the US dollar strengthen, the carry trade will unwind, hence, selling those class of assets and running back to USD.

SOS Leadership

Hmmmm.........................................

Some of the good tenets of a leader

Effective leadership is putting first things first. Effective management is discipline, carrying it out. Stephen Covey

I suppose leadership at one time meant muscles; but today it means getting along with people. Mohandas Gandhi

Management is efficiency in climbing the ladder of success; leadership determines whether the ladder is leaning against the right wall. Stephen Covey

A good objective of leadership is to help those who are doing poorly to do well and to help those who are doing well to do even better. Jim Rohn

Leadership and learning are indispensable to each other. John F. Kennedy

It is better to lead from behind and to put others in front, especially when you celebrate victory when nice things occur. You take the front line when there is danger. Then people will appreciate your leadership. Nelson Mandela

Leadership is solving problems. The day soldiers stop bringing you their problems is the day you have stopped leading them. They have either lost confidence that you can help or concluded you do not care. Either case is a failure of leadership. Colin Powell

Management is doing things right; leadership is doing the right things. Peter Drucker

Effective leadership is not about making speeches or being liked; leadership is defined by results not attributes. Peter Drucker

No institution can possibly survive if it needs geniuses or supermen to manage it. It must be organized in such a way as to be able to get along under a leadership composed of average human beings. Peter Drucker

Leadership is the art of getting someone else to do something you want done because he wants to do it. Dwight D. Eisenhower

The supreme quality for leadership is unquestionably integrity. Without it, no real success is possible, no matter whether it is on a section gang, a football field, in an army, or in an office. Dwight D. Eisenhower

You don't lead by hitting people over the head - that's assault, not leadership. Dwight D. Eisenhower

Absolute identity with one's cause is the first and great condition of successful leadership. Woodrow Wilson

I have a different vision of leadership. A leadership is someone who brings people together. George W. Bush

Leadership to me means duty, honor, country. It means character, and it means listening from time to time. George W. Bush

Leadership is influence. John C. Maxwell

I speak directly to the people, and I know that the people of California want to have better leadership. They want to have great leadership. They want to have somebody that will represent them. And it doesn't matter if you're a Democrat or a Republican, young or old. Arnold Schwarzenegger

SOS World Class Org Chart!

Just a mindless joke. Don't take it so seriously.

When top level guys look down, they see Sxxx
When lower level guys look up, they see Axxxxxx

SOS Living in Heaven?

Sometimes I wonder if we know we are living on heaven.

Take a break and enjoy the marvellous scenes.

SOS Rarely Happen?

Summary of comments for April Issue in Elliote Wave by Bob Prechter

It is rare to have technical indicators all lined up on one side of the ledger. They were lined up this way—on the bullish side—in late February-early March of 2009. Today they are just as aligned but on the bearish side.

Consider this short list:

1. 3.5% cash on average in mutual funds. This figure matches the all-time low, which occurred in July 2007, the month when the Dow Industrials-plus-Transports combination made its all-time high.
   


2. 10-day moving average of the CBOE Equity Put/Call Ratio … investors are interested primarily in betting on further rising prices, not falling prices, and that’s bearish.
   


3. VIX, a measure of volatility based on options premiums, has been sitting at its lowest level since May 2008, when wave (2) of 1 peaked out and led to a Dow loss of 50% over the next ten months.
   


4. The Daily Sentiment Index, a poll conducted by Trade-Futures.com, a poll conducted by Trade-Futures.com, reports the percentage of traders who are bullish on the S&P. The reading has been registering highs in the 86-92% range ever since last September.


5. The Dow’s dividend yield is 2.5%. The only market tops of the past century at which this figure was lower are those of 2000 and 2007, when it was 1.4% and 2.1%, respectively.


6. The price/earnings ratio … has improved tremendously … but … is in the area of the peak levels of P/E throughout the 20th century.


7. The Trading Index (TRIN) … the 30-day moving average of daily closing TRIN readings has been sitting at 0.90, the lowest level since June 2007. … Usually long periods of low TRIN exhaust buying power.

MyView

How often can you find 7 indicators that points to the BEARISH market, once every 80 years. So what should you do when you sees one. Two options, first the save options, stays out of the market and wait until market crash at least 50% before reenter.

A more aggressive option is to SHORT SELL the market, with leverage. After market is down more than 50%, consider to go in SLOWLY i.e. concentrate on dividend yield stocks.

SOS 1929 to 1932

Between 1929 and 1932 July, DJIA lost 80%.

In between, there were about 9 rebounds, ranges from 15% to 65%.

Between 2007 and 2011, DJIA will lose about 70%, i.e. from 14,000 to about 4,500.

Nothing much change actually, human behaviors remains.

NOT many survivals has the experience of seeing the tsunami waves. The people who sees it, and believe it, but did not live long enough to tell it.

The plate already cracked, the wave is building up, by the time we sees it, it is too late, no time to run up the hill.

So, please, while you still have a window of opportunity RUN, RUN, RUN now....................... Good luck.