Thursday, August 28, 2014

Ponderables

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UBER Assessed (Posted on 29 June 2014)

Now the shit stirs!!!
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Uber Technologies Inc is known as Everyone’s Private Driver. Uber operates an on-demand car service used all over the world. With the touch of a button from your phone, you can experience your own private driver.

Working as an Uber driver is one of the buzziest careers in America. With uberX, essentially anyone with a car can sign up to be a driver. And Uber makes it pretty easy to do. The first step is to head on over to this website. If you’re at least 21 years old, have a license, personal auto insurance, and a four-door car in good condition, you can sign up to be a driver. The next step is passing Uber’s background check. You’ll need to provide the company with standard information like your address, driver’s license number, and social security number. If you pass the background test, Uber requires you to take an online training course that covers standard operating procedures, how to get 5 stars, and what not to do. Upon completing the course, Uber will send you a phone. From start to finish, the registration process takes about two weeks.
Opinion: UBER just went for a fund raising among PE funds at a valuation of $17bn, yes thats amazing for a relatively simple app. UBER is now a big buzz not just in the US but even in Malaysia. This is a disruptive technology. The buzz is dying down slightly in the US because the real effective earnings of UBER drivers were not so hot. Available data showed that they gross around $15 an hour. But accounting for tolls, Uber’s 20% cut, gas, car insurance, vehicle financing, and self employment taxes, the driver really only made $54.50 for 12 hours of driving. So that’s just $4.54 an hour — far below minimum wage. 
Its still a good alternative to get that UBER spot for part timers or people who like to work when they want/need to. That's in developed nations.
 
UBER will be a lot more disruptive in developing economies with near pathetic taxi service, such as Malaysia and Indonesia. What UBER provides more readily: speed, clarity, safety, cleanliness, a workable rating system that truly incentivise the drivers, and a pay scale that is more than decent. UBER is akin to a private drivers' service that is a lot cheaper than those "private car bookings" from hotels.
The rise and rise of taxi apps in Malaysia is only reflective of apps helping the taxi system to "be more like UBER". Its a long slog but methinks in many countries the taxi drivers will be up in arms against UBER and will protest and seek the government's help to turn the tide.
What is UBER really in Malaysia... it basically legitimises the private taxi touts and louts at airports and malls. Unfortunately owners of taxi licenses in Malaysia are well connected politically, and soon we will see a clampdown on UBER.
 
As an open country that is so called MSC, MDC ... centric ... we must be open to even disruptive technologies. Yes, it may disrupt and even change the current status quo, but it is notching efficiencies and delivering a service that is "unserviced", meeting a demand that is not met, or creating new demand out of the blue. It is not all cannabalism of an existing industry. Existing taxi drivers would do well to try and be an UBER driver now. All the while, the taxi license owners will be knocking on doors of powerful politicians and crying wolf.

Top Tourist Scams

As the world gets to be more mobile with travel becoming more and more affordable, we need to be careful of the usual modus operandi by street smart gangs.

The “Found” Ring: An innocent-looking person picks up a ring on the ground in front of you and asks if you dropped it. When you say no, the person examines the ring more closely, then shows you a mark “proving” that it’s pure gold. He offers to sell it to you for a good price — which is several times more than he paid for it before dropping it on the sidewalk.

The “Friendship” Bracelet: A vendor approaches you and aggressively asks if you’ll help him with a “demonstration.” He proceeds to make a friendship bracelet right on your arm. When finished, he asks you to pay a premium for the bracelet he created just for you. And, since you can’t easily take it off on the spot, you feel obliged to pay up. (These sorts of distractions by “salesmen” can also function as a smokescreen for theft — an accomplice is picking your pocket as you try to wriggle away from the pushy vendor.)

Salesman in Distress: A well-spoken, well-dressed gentleman approaches you and explains that he’s a leather jacket salesman, and he needs directions to drive to a nearby landmark. He chats you up (“Oh, really? My wife is from Chicago!”) and soon you’ve made a new friend. That’s when he reaches in his car and pulls out a “designer leather jacket” which he’d like to give to you as a thank you for your helpfulness. Oh, and by the way, his credit card isn’t working, and could you please give him some cash to buy gas? He takes off with the cash, and you later realize that you’ve paid way too much for your new vinyl jacket.

Money Matters

Any time money changes hands, be alert, even when using ATMs. When dealing with the public, keep your cards in your sight, or much easier and safer, pay cash. But even paying with cash can have its challenges.

Slow Count: Cashiers who deal with lots of tourists thrive on the slow count. Even in banks, they’ll count your change back with odd pauses in hopes the rushed tourist will gather up the money early and say “Grazie.”

Switcheroo — You Lose: Be careful when you pay with too large a bill for a small payment. Clearly state the value of the bill as you hand it over. Some cabbies or waiters will pretend to drop a large bill and pick up a hidden small one in order to shortchange a tourist. Get familiar with the currency and check the change you’re given: The valuable €2 coin resembles several coins that are either worthless or worth much less: the 500-lira coin (from Italy’s former currency), Turkey’s 1-lira coin, and Thailand’s 10-baht coin.

Talkative Cashiers: The shop’s cashier seems to be speaking on her phone when you hand her your credit card. But listen closely and you may hear the sound of the phone’s camera shutter, as she takes a picture of your card. It can make you want to pay cash for most purchases, like I do.

Meeting the Locals

The Attractive Flirt: A single male traveler is approached by a gorgeous woman on the street. After chatting for a while, she seductively invites him for a drink at a nearby nightclub. But when the bill arrives, it’s several hundred dollars more than he expected. Only then does he notice the burly bouncers guarding the exits. There are several variations on this scam. Sometimes, the scam artist is disguised as a lost tourist; in other cases, it’s simply a gregarious local person who (seemingly) just wants to show you his city. Either way, be suspicious when invited for a drink by someone you just met; if you want to go out together, suggest a bar (or cafĂ©) of your choosing instead.

Oops! You’re jostled in a crowd as someone spills ketchup or fake pigeon poop on your shirt. The thief offers profuse apologies while dabbing it up — and pawing your pockets. There are variations: Someone drops something, you kindly pick it up, and you lose your wallet. Or, even worse, someone throws a baby into your arms as your pockets are picked. Assume beggars are pickpockets. Treat any commotion (a scuffle breaking out, a beggar in your face) as fake — designed to distract unknowing victims. If an elderly woman falls down an escalator, stand back and guard your valuables, then...carefully...move in to help.

The “Helpful” Local: Thieves posing as concerned locals will warn you to store your wallet safely — and then steal it after they see where you stash it. If someone wants to help you use an ATM, politely refuse (they’re just after your PIN code). Some thieves put out tacks and ambush drivers with their “assistance” in changing the tire. Others hang out at subway ticket machines eager to “help” you, the bewildered tourist, buy tickets with a pile of your quickly disappearing foreign cash. If using a station locker, beware of the “Hood Samaritan” who may have his own key to a locker he’d like you to use. And skip the helping hand from official-looking railroad attendants at the Rome train station. They’ll help you find your seat...then demand a “tip.”

Young Thief Gangs: These are common all over urban southern Europe, especially in the touristy areas of Milan, Florence, and Rome. Groups of boys or girls with big eyes, troubled expressions, and colorful raggedy clothes politely mob the unsuspecting tourist, beggar-style. As their pleading eyes grab yours and they hold up their pathetic message scrawled on cardboard, you’re fooled into thinking that they’re beggars. All the while, your purse or backpack is being expertly rifled. If you’re wearing a money belt and you understand what’s going on here, there’s nothing to fear. In fact, having a street thief’s hand slip slowly into your pocket becomes just one more interesting cultural experience.

Appearances Can Be Deceiving

The sneakiest pickpockets look like well-dressed businesspeople, generally with something official-looking in their hand. Some pose as tourists, with day packs, cameras, and even guidebooks. Don’t be fooled by looks, impressive uniforms, femme fatales, or hard-luck stories.

Fake Charity Petition: You’re at a popular sight when someone thrusts a petition at you. It’s likely a woman or a teen who, often pretending to be deaf, will try to get you to sign an official-looking petition, supposedly in support of a charity (the petition is often in English, which should be a clue). The petitioner then demands a cash donation. At best, anyone who falls for this scam is out some euros; at worst, they’re pickpocketed while distracted by the petitioner.

Phony Police: Two thieves in uniform — posing as “Tourist Police” — stop you on the street, flash their bogus badges, and ask to check your wallet for counterfeit bills or “drug money.” You won’t even notice some bills are missing until after they leave. Never give your wallet to anyone.

Room “Inspectors”: There’s a knock at your door and two men claim to be the hotel’s room inspectors. One waits outside while the other comes in to take a look around. While you’re distracted, the first thief slips in and takes valuables left on a dresser. Don’t let people into your room if you weren’t expecting them. Call down to the hotel desk if “inspectors” suddenly turn up.
The Broken Camera: Everyone is taking pictures of a famous sight, and someone comes up with a camera or cell phone and asks that you take his picture. But the camera or cell phone doesn’t seem to work. When you hand it back, the “tourist” fumbles and drops it on the ground, where it breaks into pieces. He will either ask you to pay for repairs (don’t do it) or lift your wallet while you are bending over to pick up the broken object.

The Stripper: You see a good-looking woman arguing with a street vendor. The vendor accuses her of shoplifting, which she vehemently denies. To prove her innocence, she starts taking off her clothes — very slowly. Once she’s down to her underwear, the vendor apologizes and she leaves. Suddenly all the men in the crowd find out that their wallets have “left,” too, thanks to a team of pickpockets working during the show.

 40 Tourist Scams to Avoid This Summer

Wednesday, August 27, 2014

S&M Show Podcast

Should EPF Vote in the Banking 'Merger'? Why EPF should not vote in the mega bank merger proposal, and the need to regulate brokers' changes in margin limits and counters.



http://www.bfm.my/sm-salvatore-dali-malaysiafinance-should-epf-vote-in-the-banking-merger-20140827.html


Song Pick:   Midnight Blue by ELO. So difficult to pick a song cause there are so many good ones. Did not want to play the more popular tunes such as Last Train, All Over The World, etc...



Monday, August 25, 2014

52 Week Highs

What do you do when your stocks hit 52 week highs? I am a firm believer in stocks about to break and those breaking 52 week highs, thats about the only technical aspects that I consider as pretty important in momentum-value investing.

To break or even get close to 52 week highs, you need an accumulation of long term buyers, taking out weak holders, taking out people who do not do research, taking out stale bulls. One of the worst belief to have is when a stock breaks their highs, many people sell because they remember a few weeks, a few months back that they were cheaper. Anchoring is a bias in most of our minds and we need to realign that perception.
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Article from Alpha Architect:

Pop quiz:

A stock you own just hit a 52-week high...

Does it make you nervous?

On Wall Street, there are many highly publicized metrics that can trigger an emotional response in investors. The “52-week high” signal is a great example. It is a widely reported (e.g., Barron's, WSJ, MarketWatch) and easily noticed statistic. Stocks at 52-week highs are at their peak versus historical values, and this is, presumably, valuable information. Also, peaks per se are salient, almost by definition, and so we tend to pay a lot of attention to them.

2014-07-18 16_25_04-52-week high - Google Search

Psychological studies have shown that people exhibit an availability bias, placing undue emphasis on facts and examples that are salient, prominent or easily recalled. A recent earthquake, for example, will cause us to adjust our base rates, and temporarily overestimate the likelihood of earthquakes.

So how do people perceive stocks that are at a 52-week high, and might this metric cause us to do something inappropriate?

Anchoring and Framing

The anchoring effect describes how we can be influenced, or “anchored,” on specific information.

In “Psychological Barriers, Expectational Errors, and Underreaction to News,” (a copy is here) Justin Birru argues that when stocks are at a 52-week high, this creates a psychological barrier of sorts, beyond which investors think the stock is unlikely to go. Investors discount the possibility that the stock will continue higher, which induces them to sell.

Our associative machinery, with its tendency to create narratives to accompany our observations, might say something like,
“This stock has run up a lot and so it is expensive relative to where it’s traded in the past year. I better sell now, since the price is undoubtedly good, at least relative to where it has been.”

2014-07-18 16_34_09-kahneman - Google Search "Unless there is an obvious reason to do otherwise, most of us passively accept decision problems as they are framed..." - Daniel KahnemanIt may be that there is also an implicit frame created by the 52-week lookback period, and frames affect how we perceive reality. An observation at the extreme edge of such an evaluative frame is rare. After all, there are lots of observations inside the frame, but none outside. It seems reasonable to think that future observations might resemble past observations and therefore fall within the frame (even if this is not necessarily true). This may cause us to underweight the probability that the stock will move outside the frame, and we become pessimistic about future increases.

Note that we may evaluate the 52-week signal independently of other statistical signals, such as valuation. The stock may still be cheap on a PE basis, but even so, the 52-week frame has suddenly become very available and thus important to us, and we underweight the importance of PE relative to it.

One way to evaluate investor pessimism for stocks at 52-week highs is to examine what happens to these stocks around earnings announcements.

Do investors make expectational errors with respect to these stocks?

The Evidence Hath Spoken

Birru found strong evidence that investors became overly pessimistic about earnings for stocks near a 52-week high, since they were systematically surprised by subsequent strong earnings. Note, in the chart below, how stocks in the 10th decile (near their 52-week highs), exhibited 1) positive earnings surprises (SUE), and 2) positive abnormal returns around the announcement:

2014-07-18 15_35_49-52weekhigh paper.pdf - Adobe Acrobat Pro The results are hypothetical results and are NOT an indicator of future results and do NOT represent returns that any investor actually attained. Indexes are unmanaged, do not reflect management or trading fees, and one cannot invest directly in an index. Additional information regarding the construction of these results is available upon request.
  1. SUE represents Standard Unexpected Earnings, which is the difference between realized earnings and analyst forecasts.
  2. CAR (-1, 1) represents Cumulative Abnormal Returns (Fama-French size-B/M adjusted) in the 3 days around the announcement.

Clearly, these strong earnings results were not anticipated by the market, and Birru hypothesizes that this occurs because investors improperly anchor on the 52-week high.

So if one of your stocks hits a new 52-week high, you probably shouldn't be nervous. In fact, perhaps you should be excited.

While it would seem the evidence is pretty solid, there are still at least some market observers who would counsel you otherwise.

An example: Investing Answers -- ironically -- has the wrong investment answer. Their article states the following:
The 52-week high serves as an indicator for potential investors. Investor's will often reference the 52-week high for a stock when looking at the current price. If the price is near or approaching the 52-week high, it might not be a good time to buy, because the stock could be overvalued. Also, if a stock is near its 52 week high, this may be a signal that it is a good time to sell.

Sunday, August 24, 2014

Bursa Should Regulate This Immediately

The sell down in Sumatec, PDZ and a few small caps with huge volumes caused significant losses and uncertainty to investors and traders. As I have said before, brokers should be allowed to regulate themselves and protect themselves, i.e. manage their own risks.

However, I do not think there are rules currently to stop/regulate the measures to limit margin financing for certain stocks. If a market is hot and heady, like the market was over the last week, ANY brokers would have in their arsenal the CAPACITY and ABILITY to derail sentiment. Even among the brokers, whichever broker that makes the first move will come out smelling like roses, while the rest of the brokers will be left holding the "bag".

I believe that can be misused, or may even be construed as front running if you know the move before hand or is part of management decision to implement the decision. You and I know that any such move during a heated market will send the markets into a tailspin. As much as the losses were, if you knew beforehand, you can save a lot of money or even make money shorting on the way down (prop traders).

May I suggest the following:

a) any move to reduce the marginable amount of a certain stock, or the removal of certain stocks from a brokers' approved list for margin MUST be made public at least 5 working days before actual implementation. Even that is not a solid proposal as the act itself will be sufficient to derail the markets.

b) maybe a better way is for a broker to have issued a warning that they are considering reducing the margin for certain stocks or remove certain stocks, a grace period of 5 business days will have to be in effect before actual announcement of such moves

A warnings would send the right message, but be more orderly. The grace period would be akin to UMA, but it gives investors time to reallocate their positions. The grace period notification should be sufficient to quell speculation from going heady. IF speculation continues to be drastic following the grace period, then its nobody's fault when the broker implements the reduction in margin 5 days after that, or completely takes it off their approved margin list.

The current system is too open for chaos and unfair advantage to whoever calls the first shot. Its also to save the brokers from fighting one another as to who gets to make the RED CARD umpire call first, thus relegating the rest into chaos of picking up the pieces.

Saturday, August 23, 2014

"Dear IT Support" from a wife ...

Best thing going viral on FB now: 




Dear IT Support,

Last year I upgraded from Boyfriend 5.0 to Husband 1.0 and noticed a slow down in the overall performance, particularly in the flower, gifts and jewellery applications that had operated flawlessly under Boyfriend 5.0.

In addition, Husband 1.0 un-installed many other valuable programs, such as Romance 9.5 and Personal Attention 6.5, but installed undesirable programs such as Formula One 5.0, NBA 3.0 and World Cup 2.0.

And now Conversation 8.0 no longer runs and House Cleaning 2.6 simply crashes the system.

I've tried running Nagging 5.3 to fix these problems, but to no avail.


What can I do?

Signed,
Desperate Housewife


 
 
Reply:

Dear Desperate Housewife,

First keep in mind: Boyfriend 5.0 is an entertainment package, while Husband 1.0 is an operating system.

Try entering the command C:\ I THOUGHT YOU LOVED ME and download Tears 6.2 to install Guilt 3.0 

If all works as designed, Husband 1.0 should then automatically run the applications Jewellery 2.0 and Flowers 3.5.


But remember, overuse can cause Husband 1.0 to default to Grumpy Silence 2.5, Happy Hour 7.0 or Late Night Teh Tarik 6.1.

Late Night 6.1 is a very bad program that will create SnoringLoudly. wav files.

Whatever you do, DO NOT install Mother-in-Law 1.0 or reinstall another Boyfriend program. These are not supported applications and will crash Husband 1.0.

In summary, Husband 1.0 is a great program, but it does have a limited memory and cannot learn new applications quickly.

You might consider additional software to improve memory and performance. I personally recommend Hot Tasty Food 3.0 and Tongkat Ali 6.9.

Good Luck,
IT Support

Wednesday, August 20, 2014

So How

I guess everybody would have been scrambling to sell or try to get the news on what actually happened to the market. Stop, think ... do you really NEED a reason? The market in second and third liners were so strong, we don't know where to look for reasons to sell. No reason seem to be good enough to stop the moving train, but seriously, it needed to take a breather.

So, the purported reasons were:

a) that a broking house starting with K may have issued a cut in marginable amount of a few stocks, from the usual 100% of market value to 50%; funnily the new rules were supposed to have be effective on this coming Monday; there will be plenty of people wanting to throw eggs and send coffins to this broker but they were just really protecting themselves; if they did not do it, somebody will sooner or later; look at the rise and rise and the volume of PDZ and Sumatec, everyone, including those who bought the very last round, knew it could not last, they all just hoped they weren't going to be the last one holding the baby ...

b) that Halim Saad was dying... when in actual fact, from reliable sources, that he was actually in hospital... BRIEFLY to give some blood samples for his annual check up ...

Can you believe the markets would go and wipe off a few billion ringgit based on these two things? I mean the first was believable and may well be reason enough to sell but the second reason was preposterous.

Seriously:

1) the market needed a reason to correct, it just so happened that the newsflow allowed them to do that

2) it does not look like the bull has ended, in fact, the ripple effect has been relatively limited, in my view

3)   my view is that we will regain some of the lost momentum but it would not immediately go back to the frothy frenzy days of the past week or so, it needs to rebuild the momentum, trust and belief

S&M Show Podcast

Investors' Protection or Market Intervention (Circuit Breakers & Market Integrity)


http://www.bfm.my/sm-salvatore-dali-malaysiafinance-investor-protection-or-market-intervention-20140820.html

http://www.bfm.my/sm-salvatore-dali-malaysiafinance-circuit-breakers-market-integrity-20140820.html


Song Pick:  Hard to get this one through David Chew as he considered this as too mushy. But I try to feature songs that matters to me, and songs that do not get airplay anymore. In recent times, the favourite break up song has to be Adele's Someone Like You. My favourite is Someone I Used To Love by Barbra Streisand (original by Natalie Cole).



Tuesday, August 19, 2014

Murasaki's Track Record Updated

Even though the market is strong, traders and investors should also get the added advantage of the major movers and not be stuck with also-rans. Sign up for a free 7 days trial and make sure you attend one of our Masterclass to get the full benefits in how to use the system properly.

www.murasaki.co


tock CodeStock NameHighlight Price(RM)Highlight DateLiked
7214ARANK 0.715 18/08/2014 09:03:31 AM 0 
1538SYMLIFE 1.150 15/08/2014 09:03:59 AM 0 
00123A 1.020 15/08/2014 09:02:56 AM 0 
7071TAKASO 0.320 13/08/2014 09:15:42 AM 1 
8745LEWEKO 0.260 12/08/2014 03:30:17 PM 0 
1589IWCITY 1.620 12/08/2014 09:08:55 AM 0 
1503GUOCO 1.730 08/08/2014 09:05:10 AM 1 
6203KHEESAN 0.645 08/08/2014 09:02:30 AM 0 
0136GREENYB 0.350 07/08/2014 03:56:43 PM 0 
7215NIHSIN 0.280 07/08/2014 03:52:41 PM 0 
 

Friday, August 15, 2014

Gainers & Losers


From Think Big:

The average S&P 500 stock is up 5.89% year-to-date, and 65.4% of the index is in the black for the year.  Below is a list of the 40 best performing S&P 500 stocks so far this year.  
As shown, there aren't any 100% gainers in the index through today, and we're going to need to see some big gains over the next three and a half months if the index is going to register any "doubles" this year.  Newfield Exploration (NFX) is currently the biggest winner in 2014 with a gain of 63.82%.  Another Energy company -- Nabors (NBR) -- ranks second with a gain of 58.09%.  Under Armour (UA), Electronic Arts (EA) and Green Mountain (GMCR) round out the top five, all with YTD gains of more than 50%.
Surprisingly, all ten S&P 500 sectors are represented on the list.  The one Utilities name to make it is Pepco Holdings (POM) with a nice gain of 40.46%.  Technology is the most represented with ten names, followed by Energy with seven.  A few of the notable names on the list include Facebook (FB), Southwest (LUV) and Delta (DAL), Chipotle (CMG), Intel (INTC) and First Solar (FSLR).
The list of 2014's biggest losers in the S&P 500 is dominated by consumer stocks.  Coach (COH) ranks dead last in the index with a decline of 35.54%, and Whole Foods (WFM) isn't far behind with a loss of 33.84%.  Four more brick-and-mortar retailers rank third through seventh worst, and maybe surprisingly to some, web-giant Amazon.com (AMZN) ranks eighth worst in the S&P with a year-to-date decline of 20.18%.  As you saw in the table of winners above, not all retailers are having a rough year (Chipotle and Kroger), but clearly the group as a whole has struggled.  Of the 40 worst performing stocks in the S&P this year, 17 are in either the Consumer Discretionary or Consumer Staples sectors.  Investors are definitely looking for back-to-school and the holiday season to help turn things around.  Historically, the holiday season hasn't been a time to hold retailers, but given their performance so far this year, maybe we'll see a divergence from the normal seasonal stock trends.
While no S&P 500 stocks have doubled this year, 19 names in the Russell 3,000 are up more than 100%.  As shown in the table below, RadNet (RDNT) is currently in first place with a year-to-date gain of 316.17%.  Pacific Ethanol (PEIX) ranks second at +281.34%, and Plug Power (PLUG) ranks third at +275.48%.  Intercept Pharma (ICPT) is up the fourth most in the index at +247.36%, but it's actually set to open tomorrow morning in first place after gaining 58% after-hours!  InterMune (ITMN) round out the top five at +203.53%.
The list of winners in the Russell 3,000 is dominated by biotech names, with 14 of the 40 stocks coming from the Health Care sector.  Biotech ran into big trouble back in March and April, and the group as a whole has yet to take out its highs from eariler this year.  That being said, there are still plenty of names in biotech that are having banner years.
If you have time, browse through the charts and fundamentals of these big winners.  You may not find any long opportunities from a list of names that are up so much, but you'll get a good sense of the trends that investors are playing these days.