You use Facebook? or Facebook uses you?

Despite Facebook's popularity is dropping nowadays, especially among the younger generations like teens, it is still the biggest social media platform. Many people clock in wherever and whenever they do something.

Posting photos in FB was once seen as a very "in" thing to do. However, despite I also have a FB account but I have never done that. In my first post in this blog I have made it very clear that I do not want to leave any trace of my personal particular in the Internet. It is not difficult to understand why I have never put any photo in my FB account. In fact, the only purpose setting an account in FB was to re-connect with those long lost acquaintance if they happen to find my account. Indeed that is the very first objective that Zuckerberg found FB.

Don't know since when FB became what it is now. It turned into a marketing platform more than is a social media. Not only there are corporate accounts but even many of the individual accounts are catered for marketing on the account holders themselves or the merchandises behind them. So not only I am not active in checking my account nor do I care what happened on the other accounts. I am not a fan of FB at all.

The other reason I don't like FB is because FB has gradually became a greedy company which exploits the big data it has. The big data that has been developing by the mass account holders whom posting text or images in their own accounts. These posts and images form a gold mine because it is exactly the big data that is most sought after nowadays. FB naturally taps on this gold mine and exploits most of out it. However, actually these posts and images are the properties of all the account holders. FB does not own them but it is making huge profit from manipulating the big data deriving from these posts and images. So when people think they are using FB but do they really think who is using who?

I remember someone has once said the best business model is the one with light asset, no inventory and no own production because that means no need to lock up capital on the investment on the assets, no need to worry about the depreciation on inventory and no need to worry about the production capacity. FB just provide a platform for its account holders to post the content which FB is not producing nor is there any inventory that FB needs to hold so FB is exactly this type of business model so despite it is not a good place for me but perhaps it could be a good investment.

The way I see Bitcoin

Along with the Bitcoin price fluctuation, recently there are increasing noises about this controversial financial product. Many bloggers have made comment on Bitcoin and they mostly focused on whether Bitcoin is a bubble or whether there is any value of investing on it. Most bloggers analyzed Bitcoin on it functionality against the legal tenders like the trading function, value storage function ...etc. However, they all overlooked or neglected one fundamental that why on earth crytocurrencies exist in the world. None of them talked about this very underlying element.

While bloggers commented the nature and future of the Bitcoin, many other readers raised their opinion about it. Some said Bitcoin attributed to the waste of electricity and even deteriorating climate due to globe warming resulting from the power consumption spent on Bitcoin mining. Their comment are all partly reasoned. Nonetheless, a view from another angle perhaps can enable us to see this topic better.

Every economic activity exists for a reason. Only when it meets a need then it can last or even thrives. No rational one will ever engage his valuable resources in mining Bitcoin if there is no market need. So what is this market need indeed?

To answer this question, we can find the clue on the centre point of the Bitcoin, ie., it is a product of block chain technology which has a decentralization characteristic. There is no centralized clearing house of each Bitcoin transaction. That is the beauty of Bitcoin, at least to some groups of people, because transactions are not monitored by the governments around the world. Who likes this most? Of course the underground economy like terrorists, drug traffickers, smuggling syndicates ...etc. Prior to the age of Bitcoin, they have to launder their profit by money-laundering which is troublesome and risky. Now life is much easier for those groups at lease in realizing the profit from underground economy to the surfaced one.

So Bitcoin is a lubricant to the crime? Well perhaps criminals are the groups that can capitalize on the beauty of Bitcoin most but they are not the only beneficiaries. Any individual whom has the need to transmit money across borders is one of the examples. In fact what crime money is indeed is a controversy per se. Firearm trade in Hong Kong is of course a crime but it is legal in the America. Casino is forbidden in Hong Kong but they thrive in Macau. There is too much grey area between crime money and its counterpart. After all, Bitcoin is only a intermedia just like a knife is a productive tool to a butcher but a deadly weapon to a psycho.

Some said Bitcoin is a bubble which will vanish just like the tulip bubble did. Well, as long as it keeps meeting the need of some interested groups, I don't see it will die out. Yet whether one should join the bandwagon, it is totally one's assessment. No doubt there is a quite obvious tendency of price manipulation because the Bitcoin holding concentrates in the hands of a few players whom can drive the price in either direction. What makes it even complicated is that the Wall Street is stepping in this once alienated financial product by operating futures for Bitcoin. Higher volatility in the future is unavoidable and the price call will gradually shift from the existing big players to the Wall Street. When Wall Street tasted the blood of Bitcoin then it is unlikely that it will let Bitcoin dies out.

Is there on earh a guaranteed winning way in investing?

In the high time of market trend, there are many ads about tuition on investing in all kinds media. All of them are saying they have a winning strategy and as long as you pay to learn then you will be benefited. I have never attended such courses. I am not sure whether the tutors really have a winning strategy but if I have one then I won't bother to organize courses. Superman Li never did that as far as I know. Nor did Buffet.

However, I do agree that there is a for sure winning way in investing. Am I self contradictory? Not really. Any one knows statistics must has heard about probability. As long as you can construct a trading system that has a success rate over 50% and you have a strategy to win at a reward rate higher than 2 times of the bet placed, over the long run you are bound to win. This is a guaranteed winning way. If you think such thing never exists in the world then you are damn wrong. In fact, it is never far away from us. All casinos know what it is about. It is the for sure winning system that makes casinos never lose in the long run. So to punters, gambling is a trial of luck but to casinos, gambling is a business, a business that never lose except the loss arising from poor business operation but never from hosting gambling table.

When there is really an ever winning way in the world then we, being investors, must learn how this winning way can benefit us. Many investors are keen in learning different kinds of investing philosophies like value investing, trend investing...and seriously study the methods of fundamental analysis and/or technical analysis in the hope that they can master something to beat the market. I do agree that those skills are important and useful. However, without an guaranteed winning system, most if not all, wins in the investing are kind of chance but not guaranteed.

Don't know who once said that investing falls somewhere in the spectrum between arts and science. I further refine the saying that the analysis part of investing is arts while the execution part is purely science. For example, the way to evaluate the value of a company is really an art although there are analysis methods seems scientific yet there are many subjective assumptions when doing the evaluation. Even the technical analysis has a lot of subjective assessment, like the way how to count the waves. However, when it comes to the execution part which means the trading system. It purely rests on the statistical reasoning. As what I put it in the earlier paragraph, as long as the trading system has a proven 50%+ winning probability and a return rate of 2 times or more, profit is guaranteed in the long run of investing. What we need to do is to construct a trading strategy that meets these two criteria and back test it with historical database.

So to me, winning in investing is all about a reliable trading system.You may say such system is too good to have one and wonder its existence. Yet I have it. Hope you can also build yours.

How do you classify your investments?

Nowadays many people have investments in one way or another. Stocks, properties, REITs, ETFs, mutual funds and bonds are the most popular choices. Of course there are some other "investments" like warrant, CBBC and option. Even bank saving could be considered as investment as well despite of the miserable return.

I don't know how other people classify their investments but I do it in my way according to the possibility of value appreciation (depreciation on the otherwise direction) and whether there is income generation by the investments. The classification falls into category 1, 2, 3 and 4 in the below matrix.

		Value Appreciation
		Yes	No
Income Generation	Yes	1	2
	No	3	4

Cat. 1 investment can generate income while possibly enjoys value appreciation (depreciation as well). This is the ideal class of investment. At certain time frame, rental properties and certain types of stocks are good examples.

Cat. 2 investment just earns income only but does not see value appreciation over times. Holding bonds till maturity falls exactly into this category.

Cat.3 investment is the opposite of Cat. 2 so no income is received during the investment period. All one hopes is the price hike followed by a sell off for profit. Most, if not all, growth stocks that pay out close to zero dividend are the examples.

Cat. 4 is basically not an investment because it neither generate income nor will it appreciate over times. Cash or saving bank account deposit match exactly this criteria.

So one may ask why classify the investments in the first place as long as they make money in one way or another. This is about the objectives of our investment. That is to say why we invest in the first place. The objective of investment largely associates with our life cycle. Understanding in what stage of life cycle one is in then he/she can develop an investment strategy to best meet his/her needs by holding the corresponding categories of investment items.

Of course these four categories are not mutually exclusive. One can hold all four at the same time but putting an appropriate percentage among them is important and adjusting the percentages along the life cycle is even more vital. So in the first place one must examine into what categories his/her investments fall into and check what percentages they are in. Holding an inappropriate category and particularly having too much could be harmful to one's financial well-being. Just imagine a 80 years old retiree holding 10% of Cat.4 but 90% in Cat. 3, ie., no income but hopefully price hike could be fatal in case of the market crash. On the other hand, a young person with majority of his/her assets in cash will not render him/her a fast track of wealth accumulation. Both of the scenarios are not desirable.

So classifying the investments is not the end but just the first step. The key point is to know what investments one is holding then to adjust the holding percentage in the four categories in the investment portfolio to achieve the optimal balance between cash income and value appreciation. Simply speaking, investments classification is the just means while the allocation of investments to achieve the goal of cash income and value appreciation is the end.

You are tagged!

In many countries pets like dogs are tagged with chips under statutory requirement. This is for the sake of strayed animals so that info of owner can be retrieved easily. Most of the people don't know they are also "tagged" in another way. So they are curious how they are tagged because they have not been implanted a chip into their bodies.

However, they forget they are holding a mobile phone almost every minute during their awakening time, some even when sleeping. So what do mobile phones relate to tagging then? And who tagged them at all and why?

Mobile phone not only stores many of the personal particulars and files. It is very useful and entertaining but indeed it is the backdoor that opens the access to parties not limited to hackers whom are interested in knowing everything of you. Hackers are interested in your money mostly but there are someone whom are more concerned about your activities. That is the big brother, ie., governments.

It is well known that the GPS function of mobile phones reveals the whereabout of the owners. Even it was switched off but the GSM signal still discloses the location. Very often there were scenarios in the films how police tracked a target as long as he/she is holding a mobile phone.

Except the whereabout of the owner, mobile phones provide a backdoor to check the owner's activities through viewing, secretly, on what apps used, websites browsed, photos taken, phone conversation made with whom...etc. As there are more and more functions feasible with a mobile phone, there is indeed an increasing level of disclosing our privacy. I sometimes suspect if there is any connection on the mobile phone product development with the government surveillance scheme. Naturally there is no official cooperation on such move but when governments put it at the level of national security then it makes thing reasonable and necessary.

So when mobile companies launch new models with fantastic functions, it is in one way for the sake of business purpose, on the other hand it lures more and more people to use them. This is what the governments want to see because that means more and more people are under surveillance as long as they are holding a mobile phone.

This is a triple win situation. The mobile phone companies have more business, the users are fascinated with new features and the governments got people "tagged" willingly.

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!