SOS Rule #1 in Investment

"Missing a market move may be a shame, but getting caught on the wrong side of one means you lose money. People who have gone through the experience know there's a big difference."

Patient is the name of the game. It can be one year, or two or even three to four years. The importance is that one should not lose its capital.

Sounds easier said than done, when 90% makes money, and you are missing it, it is a shame. But, one must remember, a market never end, only the players opt out. So, if one wants to be in the game for long houl, PATIENT is the first requirement of the game.

SOS Let's Evaluate the Changes

SOS Let us take a look at the Government actions (whether it is sustainable or necessary during an economic boom)

1. Stimulus - car credit, housing allowance [broken window concept]


2. Bailout - supporting too big to fail incompetence banks or conglomerates [proven to be waste of resource]


3. Zero interest rates [if it is good for the economy, they should have done so during the good times]

If you realise, the above steps are unsustainable and unproductive over a long run.

Let revisit what got us into the mess and see if any major changes:

1. sub prime mortgage and prime mortgage for housing


2. commecial collapse


3. derivatives debt exploded

None of the above actually changes much, in fact the following happen

1. Unemployment get to 10%


2. Food stamps at historical high


3. Bank giving out credit plummet


4. Saving rates increased

None of the above effects are good for the economy.

So, just look at the 3 solutions, the 3 causes and the 4 results you will notice that LONGER run the economy of USA is getting worst. It is similar to Europe.

Can Europe and US get out of the crisis?

Can the BRICS save them?

Depends who you ask, if you go for the school of deflation depression theory, i.e. it will effect worldwide, hence, the above answer is No and No.

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.