The possible biggest black swan in this year

Black swan is termed as the very unexpected incident with very slim chance yet happened. There were many examples of black swans internationally or domestically. Just name a few like Brexit and Trumped. However, the biggest one is yet to come. Many people may guess I am talking about the possible outbreak of the war between the U.S. and North Korea. This is not what I meant, I am going to share my thought on the topic though.

So far there is only exchanges of heated wordings between Trump and Kim. Most of the commentators concluded that war is unlikely as the both sides cannot afford so because should war happen it will most likely trigger a nuclear warfare that not only ruins both of them but the world as well.

My concern is not whether there will be a nuclear war that reduces the possibility of its happening. I'd rather focus on the two key persons, ie., Trump and Kim. As a result of propaganda from the mainstream media, Kim is projected as a cruel and crazy guy. Naturally I do not know the truth but I do respect Kim as the chief of a country and his vision as well. Had he not insisted on the development of nuclear weapon I do not think he stands a chance to quarrel with Trump. Take a look on the different faith on Iran and Irag that one will not doubt the importance of the ownership on nuclear weapon to a small country when they chose not to be winged under the U.S. You may say I am nuts but I think the world is even much safer when there are more nuclear weapon-backed countries. The effectiveness of nuclear threatening was well demonstrated during the Cold War period and in the competition between the U.S. and China now.

Now back to Trump, he is also labeled as a crazy guy by his rivals. I don't think he is out of his mind but sometimes he showed symptom of mania. The evidence is that he can't help to twitter naive messages or to refute the criticisms against him. He is an extraordinary president yet no predecessors ever done that before. His act is like a kid always saying no to mom. You are lazy, no, I am not! Go to bed now, no, I am not going! However, he is a grandfather.

Frankly speaking I have worry over Trump more than Kim but do I really worry there will be a nuclear war between the two countries? I think more people are more concerned about it than I am. They are the super rich families in the U.S. Kim did the bluffing only but Trump is another story. Will these families allow their wealth be destroyed by a man with mania? In American history, "coincidentally" always there was a "lunatic" showed up in time to take down his president whom would potentially jeopardize the interests of the super rich families. Well, there are so many lunatic in the world, with no exception in the U.S. and there was no shortage of examples that U.S. presidents could not complete his term.

So is that the possible black swan? probably yes but the even bigger one is that what if the lunatic fails to appear in time to do his job?

God bless American.

Governments and terrorism, it takes two to tango

People usually think it must be rivalry between governments and terrorism. All governments in the world say combating terrorism is their key job. On the other hand, bringing the biggest possible trouble by massive killing to a targeted government is the aim of all terrorist organizations. So naturally people will think that the two are born rivalries. I think most of the time they are but have you ever thought that sometimes they need each others.

In many Hollywood conspiracy films we learned that things are not just what they appear to be, particularly when it comes to politic. For anybody ever involved in senior management either in private sector or public governance knows that conflict is not always bad but sometimes even desirable. When a conflict is manipulatable, it can be manoeuvred in way beneficial to the party whom creates it.

When diversion on public attention is needed, all governments employ the tactic of conflict creation. The need may arise due to their poor performance, scandal or misbehaviour, or for a particular hidden agenda. Conflicts could be domestic or across the border as long as it works and whichever works well. Domestic conflicts are usually between or among different interested parties while cross-the-border one is best described as anti-terrorism, a conflict between fellows and international/regional terrorists. The regime of a country under terror attack can strengthen the surveillance on their nationals in the name of anti-terrorism, a dream that all regimes in the world look for. It is much more easier to pass any bills on such surveillance when there was a terror attack. At such time terrorism is the partner, rather than rivalry, to the government in a tango dance.

What if there was no terror attack? how about make one? OMG!

Idea sharing on Japanese properties investing

I have left comments in a blog regarding a video clip about the Japanese properties investing. The below are a more in-depth sharing on the topic. I shall not hint any investment choice or make any suggestion but just a sharing on the basic concepts that one should hold when considering investing Japanese property market.

1. Japanese properties investing actually has lost steam in these couple of years. It started to gain people's attention back 5 years ago when prices were still low thus gross yield was still high (some could be more than 10%). Nowadays gross yield is around 5-6% in Tokyo market.
2. Having said that, Japanese property market is still one of the options in investment in term of diversification despite the yield is not particularly attractive.
3. Japanese property investment, in a certain extend, is comparable to bonds in term of income. Tenants, particularly Japanese, in general make rental payment on time. Landlords are free from worry on rental payment default. The downside is that due to the extended slow economy, no rental hike has been seen in the past 20 years. So it is like buying a 20 years bond. 
4. Having said the gross yield is dropping from 10+% in the past to 5-6 % now when rental level remained the same means the property price did rise from its bottom. 2015 to 2016 saw the biggest hike in property price in light of Mainland money's influx due to weak Yen against RMB. As the situation reversed in the recent year, prices stagnate at the comparatively high level. So the golden time in this investment seems to be over. 
5. Just like all investments, Japanese properties investment has its pros and cons. The negative side has well been discussed like the decreasing population thus rising vacancy, sharp depreciation right after occupation on new flats, high holding costs in terms of expenses and taxes etc. In fact, there are some misconceptions on the understanding and they are partly correct.
6. In general Japan's population is falling as a whole. However, employment opportunity in key economic cities like Tokyo saw population increase instead. Young people from allover the country has been drawn to there for a chance a better life, hopefully. On the other hand 3, 4 tiers cities or prefectures really suffer from population decrease thus lowering economy which in return further drives the young people away. This is a dead end but not for Tokyo.
7. New flats did depreciate much once occupied. However, new flats are never the target of investment. Japanese has an obsession on new things with no exception on housing so they buy new flats for their own families. However, this is consumption but not investment. 
8. When doing Japanese property  investment, it is exactly a business so one must know whom their customers are and what they need. 
9. The target customers of investment properties are those young migrants in Tokyo. They are tight in budget so mostly look for the flat types so called 1R (one room) or 1K (one kitchen), ie., shoebox flats. And they don't and can't afford to mind the flats are used.
10. Investment on used flats do not have problem of sharp depreciation because they have been depreciated when investors bought them.
11. So the golden rule No.1 is never buy new flat for investment.
12. Holding costs is high indeed. However, just like all businesses, when costs are known and all are factored in while there is still a good margin, then why not? The point is that I mentioned that the present gross yield is around 5-6% making the net yield around 2%. That's why I said the golden era has gone.
13. Having said the above down sides, Japanese property market is not without merit at all. Asset diversification is one of the point I have mentioned. When property market is sought as one of the options then look around world market now, the P/E ratio on all major cities are quite high now while Tokyo is at the other end of the spectrum. There seems to have a much higher margin of safety comparing to Canada, Australia and of course Hong Kong.
14. In fact, apart from the used shoebox flats, there are also other higher end flat types worthy for investment in Tokyo. Of course they are in highly sought after locations mostly in the so-called egg yoke zones in downtown Tokyo. Due to the limited supply but overwhelming demand, these used flats did not depreciate but otherwise. 
15. Investors from Hong Kong should forget their current experience but learn this new market from K1 if they want to succeed.

The world is unfair?

In the response to a blogger's post answering his reader regarding the complaint on the subject, I wrote the below as my comment.

或者也可從另一角度去看這命題：這世界根本從未公平過，追求公平的社會根本就是緣木求魚。在不公平的環境中，人只好盡量爭取對自己有利的情況盡最大能力去發揮。不去奢求公平，不浪費時間抱怨。得着會更大。
話好像是賭氣話，但細心想一下，社會制度，財富分配制度，富人圈子人脈，富人子女優勝的教育機會等等是除了真正的贏在起跑線，起跑後的助力也比凡夫俗子強。成為富人後在富人圈子找到的機會更是圈外人可望不可即的。
這社會從來就不是公平的。

 明白百樂兄寫這blog是要散發正能量，但我也希望除了鼓勵的話，讀者也能看清身處的社會。孫子兵法曰知己知彼，百戰百勝。看清這社會的不公平實況，live with it and devise proper strategy，才有出路。
世界從來都不公平在於所有國家以及城市的統治層都是錢權結合體。錢權統治層掌握政府機器，有立法和制訂稅制等各種政策權力。自然會把遊戲規則傾向有利錢權階層。他們本來就有比凡夫俗子更多的資源，加上對他們有利的遊戲規則，比凡夫俗子更成功自不言喻。這就是富者越富的根源。凡夫俗子要看清這殘酷事實。看清不等於認命，if you can't beat them, join them. 非洲草原的角馬在食物鏈中注定是獵物，它們有否抱怨不知道，但肯定沒有認命。角馬不能變成獅子，凡夫俗子雖然很難變誠哥，但變個財自是有可能的。只要認清身處甚麼社會，不要奢望有人打救，也不要怨天尤人，更不要自暴自棄。命運在一定程度還是可以改寫的。百樂兄就是最好的人辦。

Patriot, noble or idiot?

Usually people praise the patriots for their sacrifice devoted to their countries. The sacrifices include but not limited to loss of life. Life cannot be more precious than anything else for any individual. If one affords to lose his/her life for their countries, certainly he/she holds his/her country above all.

The answers are always positive on the question whether one loves his/her country. That is why someone rate it even more important than their lives. However, what exactly a country is? Why does it so much matter to patriots?

Any dictionary can give the definition of a country but this is not my question of what a country is. My point is that what it is which is behind a country. A country is an abstract concept. What is real, physically existing is the people whom run the country. A country exists disregard changes on regimes. However, how often people mixes up the two ideas? Or contrarily how often a regime confuses its people they are the same?

One very good example is soldier. Soldiers are regarded as patriots because they serve the country. In war time, they fight for the country or even die for it. Soldiers died in wars were seen as hero. However, very seldom people would examine the nature of the war and for what purpose soldiers died in that wars. There is no question at all when soldiers died in the defense of an invasion to their country. They were hero and patriots. They protected their fellows thus lost their lives. But how about those died in the invasion or in the wars abroad in name of anti-terrorism? It is controversial, isn't it?

Now back to the confusion on country and regime. The regime that started the invasion could and most likely would say it was for the benefits of the country. The officials in the regime called the youth to join the army, fooling them they were fighting for the country. Were these youth patriots? or idiots?

A country is only an abstract concept. A country is indeed manipulated by the regime that rules the country. Patriots thought that they devoted their lives to their country. The fact could be that the regime started war for their own interests and benefits. The reasons behind most wars in the past were related to monetary benefits to conglomerates. The oil is the example of the never ending wars in the Middle East.

So patriots, next time when the regime is calling for your sacrifice in the name of country, think carefully, don't end up to be idiots.