A political nuclear bomb exploded here in Hong Kong in last Friday when the news set in that China is going to establish a HK version of China National Security Law to be added into the HKSAR Basic Law in the form of an annex. This is commonly understood as a bypass of the Hong Kong Legco's failure to proceed on the law-making as per the Article 23 of the Basic Law after 22 years since the reunion with China. Apparently China is mad about the incompetence of the HKSAR government so lost her temper compounded with the more and more explicit squeezing from the U.S. during the last couple of years.
The article 23 of the Basic Law has been a taboo in Hong Kong because there is a fear among the general public that the infringement on human rights issues that happened across the border will happen in the island after the establishment of the Article. The worry on the further tightening amid the already ever increasing self-censorship on the freedom of speech, freedom of press and the independent jurisdiction surges when the news sets in. The opposite camp described the move signals the death of the "One Country, Two Systems" is certified.
The fact that the Article has such a low reception among the general public here in Hong Kong does not come without ground. China is notorious with her record of infringement on human rights on her citizens. The national security law is a swiss knife on clamping the opposition against the CCP's ruling. Despite of the title of national security but the law per se is mainly for the sake of the fortification of the CCP's governance. The extension of the China's National Security Law(NSL), be it through the establishment of the Article 23 or the introduction of the HK version of NSL, brings only the same outcome that the level of the Hongkongers' human rights will significantly be clamped.
While the public was shocked when the news was aired during the morning news report, the Hong Kong bourse responded with a more than 1300 points all way down blunt plummet throughout the last trading day of the week. The market expressed its most explicit view and the preliminary general view from the stock market commentators were conservative. Most of them hold the view that there will likely be a testing of further south. They are most likely correct because the HSI has leveled off in the past one and a half month while the Bollinger Bands width has reduced to the 1000 points range in the last two weeks, a typical signal that breakthrough is around the corner.
While the stock market is more about the money game rather than the business field, there are also views that the NSL will drive away the foreign investments in Hong Kong as a result of the worry of the deterioration of the One Country, Two Systems which in the worst scenario will render the island becomes just among one of China's thousand common cities. While the impact of the NSL on the future living of the majority of the islanders is out of question, the business world, especially international players, might hold a different view though. For businesses, especially foreign investors, the key concern has always been whether there is business opportunity to make money when deciding where to invest. The well-being of the local people is the least consideration, deep inside their mind.
When the HK version of NSL is in force, the protestors vs police confrontation will become history. All sorts of the opposing voice, view, action against China and the puppet HKSAR government will be harmonized under force. Offenders will be arrested and prosecuted under the NSL immediately to keep all these unwanted phenomenons at bay. Not a nice place to live but it is definitely a more stable environment for conducting businesses as long as the judiciary especially regarding the commercial part remains relatively independent. After all, given that the present situation on human rights in China is much worse than that in Hong Kong now but there are already many foreign investments in China so even if one day the human rights in Hong Kong becomes the same as that in China, it does not really bother foreign investors as long as the capitalism part of the One Country, Two System still survives.
Despite of the high profile comments from the western countries, it is most likely that China is set in stone to proceed the HK version NSL anyway. In fact, the opposing comments from the West in most cases just turned out to be a disservice of their original intent as the CCP has a tradition to defend their ego just to do against what they are criticized by their western counterpart. The more the West criticizes on the HK version NSL the stronger China's determination and sooner the implementation will be. Waiting ahead for the Hong Kong people is a monotone, be harmonized, steady society. People no longer have to worry about the police's tear gas nor the protestors' road blockages. Businesses can go as usual again.
Is that a silver lining of the HK version NSL?
2020年5月24日 星期日
2020年5月3日 星期日
Wild thoughts amid the novel coronavirus pandemic (2)
While the novel coronavirus situation seems to be leveling off in the western world like Europe and mixed in the U.S., in fact, from the global perspective it is still far from satisfactory because there are still a daily close to thousand new cases in Singapore throughout the past week while things in Russia is getting worse now. Coincidentally these two places are in two extremes in the climate that one is hot all year round and the other one is still cold at night now so it tells us that this virus can spread disregard of the weather. Unfortunately this phenomenon suggests that the earlier forecast made by the medical experts that this virus is going to be with us for good perhaps bingo. On the other hand, not only there were already protests in some of the states in the U.S. that people requested lifting on the ban a couple of weeks ago but there are also voices in the Europe that people urging for reopening. Ironically the U.K. prime minister Johnson has just made his speech about his experience on the fighting with the disease saying that he was indeed at the brink of death yet people just seems too brave to ignore the consequence of contracting this virus. Apparently just as what I said in my earlier post that if this outbreak as well as lockdown persist then the fear of more people will die from financial unwell than that from disease overrides mind. This is sad but true and this is the reality or dilemma the world is facing now.
While it is still controversial on the cause and origin of this virus but no matter what this is a setback of the arrogance of human being which is totally defeated by a much much smaller tiny creature at least up to this moment. Not only that an effective vaccine is still far from availability but even if when it exists, how much time will it take to produce enough dosages for the world's 7.8 billion population? Let alone some countries just even cannot afford to buy enough vaccine for their citizen. Willingly or not, herd immunity seems to be the ultimate resort for some poor countries despite at a high cost that many infected will not make it given the poor condition of the healthcare system in these countries.
Despite it is called novel coronavirus but in fact people should not be surprised on its attack. Medical experts have been waving red flag on the onset of the superbugs which is as the result of the abuse on the usage of antibiotics. In fact there are already a few antibiotic-resistant bacteria exist, namely MRSA, CRE, VRE...etc, that these bacteria cannot be treated by the usage of existing antibiotics. These superbugs can cause diseases in various severity from skin infection to death. Luck seemed to be on human's side so far that there was no outbreak of fatal disease caused by these superbugs. Is this Coronvirus just another red flag or will it end up to be the terminator? Time will tell. People should not forget that 90% of the population of the indigenous Indian in the America was wiped out by the virus brought to this new land by the European settlers centuries ago. Viruses are tiny but could be lethal.
Prior to this virus outbreak, human is so contented on their level of scientific knowledge and technologies. Some even think they are almost playing God's duties. People believe that there is a will, there must be way to defy the laws in the mother nature. The world, oh no, should be the universe is all up to human's exploitation. But is it?
No doubt that human's intelligence is above all creatures in the world so this single species excels in this planet. Human being not only dominates the earth but squeezes the room of existence of other species. With their superior intelligence human created a host of tools that other creatures are no match with in the competition on resources. Mankind seems to be almighty with the equipment built under their technologies. However, while people is contented with the progress made along with their intelligence, it seems they have overlooked that other species are also evolving along their own path. Different animals have developed different abilities which mankind is no match with at all not only to survive but also to race against their preys and predators in order to flourish. Unlike the external equipment to human being, these animals own these innate abilities built in their own bodies like bats can locate with supersonic, eagles see with super vision, electric eels shock their prey with high voltage electricity, sharks can detect the tiny electric wave emitted by the prey...etc.
When people is so proud with their equipment and the abilities brought by these tools, it seems they have never thought how vulnerable human is when they are deprived from these equipment which they take it as granted. No need to go too extreme to imagine when there is no electricity in the world but just imagine the Internet is, for some reason, no longer working then can someone think about what a world will we be living in? On the contrary our animals counterpart is not upset at all if one day no matter due to whatever reason human's technologies do not work anymore. There is a saying that if one day the world is destroyed by our own invention of nuclear bomb but cockroach will still be living.
Human appears strong and in fact we are strong when we are in command on our equipment. In other words, we are strong just because we have these equipment and we are nothing when we do not have them. The reality is that most of the people do not survive without the civilization we created.
I recall one of the lyric of the song Hotel California.
"We are all just prisoners here, of our own device"
While it is still controversial on the cause and origin of this virus but no matter what this is a setback of the arrogance of human being which is totally defeated by a much much smaller tiny creature at least up to this moment. Not only that an effective vaccine is still far from availability but even if when it exists, how much time will it take to produce enough dosages for the world's 7.8 billion population? Let alone some countries just even cannot afford to buy enough vaccine for their citizen. Willingly or not, herd immunity seems to be the ultimate resort for some poor countries despite at a high cost that many infected will not make it given the poor condition of the healthcare system in these countries.
Despite it is called novel coronavirus but in fact people should not be surprised on its attack. Medical experts have been waving red flag on the onset of the superbugs which is as the result of the abuse on the usage of antibiotics. In fact there are already a few antibiotic-resistant bacteria exist, namely MRSA, CRE, VRE...etc, that these bacteria cannot be treated by the usage of existing antibiotics. These superbugs can cause diseases in various severity from skin infection to death. Luck seemed to be on human's side so far that there was no outbreak of fatal disease caused by these superbugs. Is this Coronvirus just another red flag or will it end up to be the terminator? Time will tell. People should not forget that 90% of the population of the indigenous Indian in the America was wiped out by the virus brought to this new land by the European settlers centuries ago. Viruses are tiny but could be lethal.
Prior to this virus outbreak, human is so contented on their level of scientific knowledge and technologies. Some even think they are almost playing God's duties. People believe that there is a will, there must be way to defy the laws in the mother nature. The world, oh no, should be the universe is all up to human's exploitation. But is it?
No doubt that human's intelligence is above all creatures in the world so this single species excels in this planet. Human being not only dominates the earth but squeezes the room of existence of other species. With their superior intelligence human created a host of tools that other creatures are no match with in the competition on resources. Mankind seems to be almighty with the equipment built under their technologies. However, while people is contented with the progress made along with their intelligence, it seems they have overlooked that other species are also evolving along their own path. Different animals have developed different abilities which mankind is no match with at all not only to survive but also to race against their preys and predators in order to flourish. Unlike the external equipment to human being, these animals own these innate abilities built in their own bodies like bats can locate with supersonic, eagles see with super vision, electric eels shock their prey with high voltage electricity, sharks can detect the tiny electric wave emitted by the prey...etc.
When people is so proud with their equipment and the abilities brought by these tools, it seems they have never thought how vulnerable human is when they are deprived from these equipment which they take it as granted. No need to go too extreme to imagine when there is no electricity in the world but just imagine the Internet is, for some reason, no longer working then can someone think about what a world will we be living in? On the contrary our animals counterpart is not upset at all if one day no matter due to whatever reason human's technologies do not work anymore. There is a saying that if one day the world is destroyed by our own invention of nuclear bomb but cockroach will still be living.
Human appears strong and in fact we are strong when we are in command on our equipment. In other words, we are strong just because we have these equipment and we are nothing when we do not have them. The reality is that most of the people do not survive without the civilization we created.
I recall one of the lyric of the song Hotel California.
"We are all just prisoners here, of our own device"
2020年4月18日 星期六
Globalization rethink
The novel coronavirus global pandemic not only hits the world on the health aspect but also imposed a profound impact on the world economy as well. As and when the virus situation subsides (hopefully it will) there will be a host of topics that the world must look into it so many people said our world is going to be a different one after the pandemic. Among the list of topics, one most talked about is the future development of the existing globalization setting.
Some people said the once flourish globalization is nearly destroyed overnight along with the onset of the outbreak. Alongside the lockdowns and shutdown on the national borders on many nations across the major continents human traffic, especially cross-border, literally came to a complete halt. Cargo traffic is equally hit as well because when lockdowns on cities as well as on some nations kicked in the production is unavoidably severely impacted. Globalization means production of all the parts within a product scattered throughout different countries, if not continents. The Domino effect further hammers the normal operation in production when one or some imported parts is out of stock due to the lockdowns. This is particularly true for those enterprises who practice JIT (Just in Time) inventory system. The world suddenly realizes that how fragile the existing system is so people can't help but just question whether we should keep the existing system running.
Naturally the concern on the stability issue arising from the logistic problem is quite valid. The view is rather monotone though. The argument rests mainly on economic which focuses on the disruption on production and the economic losses arising from it. Despite there are also some western countries have political concern that some strategic essentials which are now produced overseas. This raises the concern up to the national security level when supplies are interrupted just like what has happened on the face masks. Naturally it is almost for sure that governments around the world will raise an agenda for the procurement on such strategic essentials but after all, these items are just a very small fraction of the total world trade volume so the retreat of these items from the world trade will not pose a significant impact on the globalization status.
Perhaps before we go further on the assessment on the survival of globalization, a look back on how the globalization is born can help. Most people see globalization a rather modern thing meaning it happened quite lately. Many people relate it to the industrialization and the modern management theory of labour division. It is true that only after the industrial revolution that production mode changed from manually to inception of machinery so efficiency was gradually increased and so was the output. As the technologies advanced over time but not all countries progressed in the same pace and the same direction, some countries outperformed others in the production of some particular products so labour division emerged among nations and that was the background of the birth of globalization.
Nevertheless, industrialization and labour division just provided a breeding ground of globalization but they do not necessarily cultivate it without a key drive. There must be someone giving them a big push to facilitate the onset of globalization. In fact industrialization and labour division were something very revolutionary by themselves at their birth but they were just the means of the underlying end, ie., profit maximization. By the employment of sophisticated production technologies and having the products made in a low costs country yields the highest profit. Profit maximization is the ultimate goal, or the single goal, if a business must choose from. Yet this is the economic drive only.
In the earlier paragraph I mentioned that most people think that globalization is a rather contemporary concept but in fact perhaps it happened as earlier as in the heyday of the British Empire who was once described as the empire on which sun never sets. The Empire earned this title because she once had colonies where the sun would always shine on one of her colonies. She owned so many colonies not for fun but for profit maximization. People should remember that the Empire was the birthplace of the industrial revolution so she had the most state of the art machinery at that time. The Empire needed a great deal of raw materials for her production as well as a big market to dump her products made by the machinery. Naturally she did not have enough natural resources from her own soil of three islands only so the Royal Navy conquered those colonies which fed the Empire's appetite. On the other hand, the warships also opened up the market for her products in different continents. This is the globalization in true sense.
After the WII, the U.S. succeeded in replacing her mother to be an empire. "American Empire" exists in another form that it basically does not own colony but through its strong military muscle and the U.S. Dollar landscape the "Empire" has been ruling the world with even more (economic) colonies than her mother. Therefore the U.S. was, till this late decade, an hard core fan of globalization. People have heard her solid support on the globalization as well as free world trade over the past decades because these two advocates are the nutcracker on opening up the world market on the natural resources supplies as well as product export. Things started to change only when Trump became the president of the U.S. because he holds different view from the multiple super super wealthy families whom are the beneficiaries of the U.S.'s globalization policy. Therefore Trump does not earn their support and people see Trump has his leg being pulled more than any of his predecessors.
Just like any of the empires in the history, the British Empire fell so will the "American Empire" eventually but people is seeing a young challenger on the rise. China is eagerly trying to mimic what the Uncle Sam's defeat over his mother to replace this ageing giant. People see that China is pathing her way towards an empire by advocating the Rise of a Big Nation followed by the initiative of Belt and Road. She is actively stretching her legs and arms over the world. Therefore people is not surprised to see China became the most solid supporter of the free world trade and globalization than is the U.S. now.
Globalization is the way empires pillage the world so as long as there is empire in the world, there will always be globalization out of question.
Some people said the once flourish globalization is nearly destroyed overnight along with the onset of the outbreak. Alongside the lockdowns and shutdown on the national borders on many nations across the major continents human traffic, especially cross-border, literally came to a complete halt. Cargo traffic is equally hit as well because when lockdowns on cities as well as on some nations kicked in the production is unavoidably severely impacted. Globalization means production of all the parts within a product scattered throughout different countries, if not continents. The Domino effect further hammers the normal operation in production when one or some imported parts is out of stock due to the lockdowns. This is particularly true for those enterprises who practice JIT (Just in Time) inventory system. The world suddenly realizes that how fragile the existing system is so people can't help but just question whether we should keep the existing system running.
Naturally the concern on the stability issue arising from the logistic problem is quite valid. The view is rather monotone though. The argument rests mainly on economic which focuses on the disruption on production and the economic losses arising from it. Despite there are also some western countries have political concern that some strategic essentials which are now produced overseas. This raises the concern up to the national security level when supplies are interrupted just like what has happened on the face masks. Naturally it is almost for sure that governments around the world will raise an agenda for the procurement on such strategic essentials but after all, these items are just a very small fraction of the total world trade volume so the retreat of these items from the world trade will not pose a significant impact on the globalization status.
Perhaps before we go further on the assessment on the survival of globalization, a look back on how the globalization is born can help. Most people see globalization a rather modern thing meaning it happened quite lately. Many people relate it to the industrialization and the modern management theory of labour division. It is true that only after the industrial revolution that production mode changed from manually to inception of machinery so efficiency was gradually increased and so was the output. As the technologies advanced over time but not all countries progressed in the same pace and the same direction, some countries outperformed others in the production of some particular products so labour division emerged among nations and that was the background of the birth of globalization.
Nevertheless, industrialization and labour division just provided a breeding ground of globalization but they do not necessarily cultivate it without a key drive. There must be someone giving them a big push to facilitate the onset of globalization. In fact industrialization and labour division were something very revolutionary by themselves at their birth but they were just the means of the underlying end, ie., profit maximization. By the employment of sophisticated production technologies and having the products made in a low costs country yields the highest profit. Profit maximization is the ultimate goal, or the single goal, if a business must choose from. Yet this is the economic drive only.
In the earlier paragraph I mentioned that most people think that globalization is a rather contemporary concept but in fact perhaps it happened as earlier as in the heyday of the British Empire who was once described as the empire on which sun never sets. The Empire earned this title because she once had colonies where the sun would always shine on one of her colonies. She owned so many colonies not for fun but for profit maximization. People should remember that the Empire was the birthplace of the industrial revolution so she had the most state of the art machinery at that time. The Empire needed a great deal of raw materials for her production as well as a big market to dump her products made by the machinery. Naturally she did not have enough natural resources from her own soil of three islands only so the Royal Navy conquered those colonies which fed the Empire's appetite. On the other hand, the warships also opened up the market for her products in different continents. This is the globalization in true sense.
After the WII, the U.S. succeeded in replacing her mother to be an empire. "American Empire" exists in another form that it basically does not own colony but through its strong military muscle and the U.S. Dollar landscape the "Empire" has been ruling the world with even more (economic) colonies than her mother. Therefore the U.S. was, till this late decade, an hard core fan of globalization. People have heard her solid support on the globalization as well as free world trade over the past decades because these two advocates are the nutcracker on opening up the world market on the natural resources supplies as well as product export. Things started to change only when Trump became the president of the U.S. because he holds different view from the multiple super super wealthy families whom are the beneficiaries of the U.S.'s globalization policy. Therefore Trump does not earn their support and people see Trump has his leg being pulled more than any of his predecessors.
Just like any of the empires in the history, the British Empire fell so will the "American Empire" eventually but people is seeing a young challenger on the rise. China is eagerly trying to mimic what the Uncle Sam's defeat over his mother to replace this ageing giant. People see that China is pathing her way towards an empire by advocating the Rise of a Big Nation followed by the initiative of Belt and Road. She is actively stretching her legs and arms over the world. Therefore people is not surprised to see China became the most solid supporter of the free world trade and globalization than is the U.S. now.
Globalization is the way empires pillage the world so as long as there is empire in the world, there will always be globalization out of question.
2020年4月13日 星期一
Wild thoughts amid the novel coronavirus pandemic
A tiny creature turned the human being's world upside down. Despite the recent news shows that it seems the death tolls due to the novel coronavirus became a little bit leveling off in these few days but the worldwide infection, except that in the origin of this pandemic China, still remains at a high level. Some optimistic people think the infection rate will drop when summer draws near. However, these people are just far too optimistic or just with too much wishful thinking. They simply forget that this is a global pandemic meaning that there are infection even in the African countries and tropical countries like Singapore and Thailand where summer is all year around. This coronavirus is just not another SARS which subsided along with the warm weather. Unfortunately the forecast made by medical experts as I mentioned in my post Did we go too far? a month ago seems becoming more and more evidenced.
In the same post I also had query that the lockdown, especially nationwide, is an appropriate measure in dealing with the outbreak because such handling is devastating in economy for those countries which practice it. Apparently as what I put it a herd behaviour is proven to be a brainless mimicking now. Despite the U.S. has the highest death tolls and infections so it became the worst hit country yet it only implements patchwork lockdown and people should note that the U.S. is also a vast country and with strong economy like China who can withstand the harsh economic consequences of the lockdown. Smaller nations are just committing economic suicide when they blindly mimic such controversial measure.
In fact as strong as they are yet China has withdrawn the lockdown on her Hubei province already and Trump is looking forward eagerly to resuming the nation in normal in order to keep their economy engine running. When we consider seriously the forecast that made by the medical experts that this coronavirus will most likely with us for good and in the meantime vaccine is not going to be available in this 1-2 years time that we know that locking down in the hope to buy time to stop the spreading is virtually impractical.
Locking down in the short run can really stop the spreading within the locked area because social contact is cut completely but at one hand lockdown is just impossible to be permanent so spreading will just resume as soon as lockdown is lifted as long as the virus still exists in that area. On the other hand, the whole world now is living in a global village so as long as this virus exists in one corner of the world then it will just spread to the other parts of the world even if a specific nation has successfully eliminated this virus in its soil. The effort and economic loss for the lockdown just went in vain.
The U.K. once considered tackling measure, herd immunity, was under big attack and Boris Johnson also became a laughing stock when he himself contracted the disease as well. This idea looks outrageous in the first glance because it puts the lives of the whole nation under serious test. Many weak and vulnerable people could die if not treated properly and timely. So the point is not the idea of herd immunity but the execution of this idea. The key point is an organized fashion of herd infection that will not flood the public health system to crash. Man-made vaccine takes at least 4-5 years to be developed but the antibody can be generated one week after the infection. An organized fashion of herd infection within the capacity of the public health system not only let the community generate antibody in the quickest time but also keep the patients in good looking-after condition to minimize the death toll due to complication. Let alone the salvation on the economic impasse arising from the lockdown.
Whether lockdown is effective in combating the spreading is still controversial and only time can tell. One thing for sure is that many people around the world have already lost their jobs or at least some of their income. When the outbreak persists as well as the lockdown then there will be even more people than is now in serious financial hit. They do not die from the disease but just from financial unwell.
Herd immunity is outrageous? In extraordinary time people need thinking out-of-the-box.
In the same post I also had query that the lockdown, especially nationwide, is an appropriate measure in dealing with the outbreak because such handling is devastating in economy for those countries which practice it. Apparently as what I put it a herd behaviour is proven to be a brainless mimicking now. Despite the U.S. has the highest death tolls and infections so it became the worst hit country yet it only implements patchwork lockdown and people should note that the U.S. is also a vast country and with strong economy like China who can withstand the harsh economic consequences of the lockdown. Smaller nations are just committing economic suicide when they blindly mimic such controversial measure.
In fact as strong as they are yet China has withdrawn the lockdown on her Hubei province already and Trump is looking forward eagerly to resuming the nation in normal in order to keep their economy engine running. When we consider seriously the forecast that made by the medical experts that this coronavirus will most likely with us for good and in the meantime vaccine is not going to be available in this 1-2 years time that we know that locking down in the hope to buy time to stop the spreading is virtually impractical.
Locking down in the short run can really stop the spreading within the locked area because social contact is cut completely but at one hand lockdown is just impossible to be permanent so spreading will just resume as soon as lockdown is lifted as long as the virus still exists in that area. On the other hand, the whole world now is living in a global village so as long as this virus exists in one corner of the world then it will just spread to the other parts of the world even if a specific nation has successfully eliminated this virus in its soil. The effort and economic loss for the lockdown just went in vain.
The U.K. once considered tackling measure, herd immunity, was under big attack and Boris Johnson also became a laughing stock when he himself contracted the disease as well. This idea looks outrageous in the first glance because it puts the lives of the whole nation under serious test. Many weak and vulnerable people could die if not treated properly and timely. So the point is not the idea of herd immunity but the execution of this idea. The key point is an organized fashion of herd infection that will not flood the public health system to crash. Man-made vaccine takes at least 4-5 years to be developed but the antibody can be generated one week after the infection. An organized fashion of herd infection within the capacity of the public health system not only let the community generate antibody in the quickest time but also keep the patients in good looking-after condition to minimize the death toll due to complication. Let alone the salvation on the economic impasse arising from the lockdown.
Whether lockdown is effective in combating the spreading is still controversial and only time can tell. One thing for sure is that many people around the world have already lost their jobs or at least some of their income. When the outbreak persists as well as the lockdown then there will be even more people than is now in serious financial hit. They do not die from the disease but just from financial unwell.
Herd immunity is outrageous? In extraordinary time people need thinking out-of-the-box.
2020年3月23日 星期一
Does it upset you?
Yesterday the HSI lost more than 1100 points again and totally wiped out the 1096 points surge in last Friday. In fact speculation on re-bounce in a down trend market is a very risky business like the attempt to catch a falling knife. So far the HSI has fallen 25.6% and 35.2% from the latest peak or the historic peak respectively. The biggest trigger of the plunge is out of question the outbreak of the global pandemic. As it is event driven so no one can tell where the bottom will be until the global infection rate and most of all, the death toll, are stabilized. However, it is pretty sure that a lower level is yet to come.
As what I put in my post Correction or crash?(3) that if the HSI breaks the last foothold of 19400 level then it is very likely the Wave C is on its way. Anything below 19400 means a more than 42% plummet from the historic peak. Not all stocks, in fact most of them not, are synchronized with the HSI on the magnitude of plummet. Again the history is a good reference. The valley of 10676 in 2008 October is the departure of the past uptrend. The prior peak of this valley is 31958 in 2007 October. The valley was a 66.6% fall from its peak. However, many stocks have suffered more, or much more, loss than was the then HSI lowest point. For example, SHK property(0016) was -72%, HSBC(0005) was -78%, Galaxy(0027) was -90%, Great Wall Motor(2333) was even -97% meaning its lowest point was only 3% of its peak! A nearly total loss!
A casual glance on most of the optionable stocks revealed a current fall of a roughly average of 40% from their 52 weeks peak now. If the HSI is going to fall further then very likely some of the individual stocks are going to be suffered a further loss from their 52 weeks peak. The record from the crash in 2008 showed the randomly chosen 60 optionable stocks have suffered an average 80% loss from their peaks. If there will be a crash and if the magnitude is same as the last one, one can reasonably expect there will be another 40% fall from their peaks for most of the stocks. This can explain why catching a falling knife now is a very risky business.
Despite the fall in stock prices in 2008 was scary but in last year some of the big cap stocks have re-bounced and even surpassed their previous peak in 2007 like CLP(0002), Hang Seng(0011), Henderson Land(0012), MTR(0066). These big cap stocks tally what Buffet's saying that in long run buy and hold on good quality stocks could be a good strategy. Having said, interestingly there are also some big cap stocks failed to return to their peaks in 2007 even amid the HSI historic peak in last year like SHK(0016), China Life(2628), PetroChina(0857) and China Mobile(0941) etc. Surprisingly these underdogs are also, or at least once, regarded as star stocks.
It seems choosing the right stocks is still the key point in terms of Buffet's buy and hold strategy but it is easier said than done. A Monday morning quarterback is of course always right. Without a crystal ball, one can only rely on the historic trend of the stocks for clue. In my post stock picking make easy I raised the idea of picking stocks with a long upward trend, say, 15 years in the hope the trend can continue even after a crash.
Apart from a track record of upward trend, if a stock is giving out a steady growing dividend payout every year in the past 10 years. If there will not be a big change in its fundamentals then it is likely that it will keep paying a promising dividend in the years to come. Naturally nobody likes to see his/her portfolio's value is cut by half or even by 80% but when a crash happened then this is the life that investor has to live with when he/she does not has a crystal ball to cash the portfolio before the crash.
While the fall in stock prices in a crash is substantive but one can choose to change the mentality to perceive it in another way. Perhaps people can imagine they are the owners of the businesses which they have stock holdings. I believe Li Ka Shing is not bothered at all even the stock prices of his companies fell in any of the past crashes because he knows his companies are still making money for him, disregard the stock price level. So as long as the portfolio of their stocks are with a solid business model that can survive this crash then people can just leave them alone and just wait to let them to climb to, hopefully, an even higher peak after this drought.
Rather than focusing on the fluctuation of the stock prices in their portfolio, perhaps one should spend more time on scrutinizing the business model of their stock holdings instead. If your stock holding displayed an upward trend in the past 15-20 years, giving you an annual 5%+ dividend and a growth on the absolute dividend amount over the years, and most of all, it shows a track record that it could make an even higher peak than that before this crash, then does it upset you?
As what I put in my post Correction or crash?(3) that if the HSI breaks the last foothold of 19400 level then it is very likely the Wave C is on its way. Anything below 19400 means a more than 42% plummet from the historic peak. Not all stocks, in fact most of them not, are synchronized with the HSI on the magnitude of plummet. Again the history is a good reference. The valley of 10676 in 2008 October is the departure of the past uptrend. The prior peak of this valley is 31958 in 2007 October. The valley was a 66.6% fall from its peak. However, many stocks have suffered more, or much more, loss than was the then HSI lowest point. For example, SHK property(0016) was -72%, HSBC(0005) was -78%, Galaxy(0027) was -90%, Great Wall Motor(2333) was even -97% meaning its lowest point was only 3% of its peak! A nearly total loss!
A casual glance on most of the optionable stocks revealed a current fall of a roughly average of 40% from their 52 weeks peak now. If the HSI is going to fall further then very likely some of the individual stocks are going to be suffered a further loss from their 52 weeks peak. The record from the crash in 2008 showed the randomly chosen 60 optionable stocks have suffered an average 80% loss from their peaks. If there will be a crash and if the magnitude is same as the last one, one can reasonably expect there will be another 40% fall from their peaks for most of the stocks. This can explain why catching a falling knife now is a very risky business.
Despite the fall in stock prices in 2008 was scary but in last year some of the big cap stocks have re-bounced and even surpassed their previous peak in 2007 like CLP(0002), Hang Seng(0011), Henderson Land(0012), MTR(0066). These big cap stocks tally what Buffet's saying that in long run buy and hold on good quality stocks could be a good strategy. Having said, interestingly there are also some big cap stocks failed to return to their peaks in 2007 even amid the HSI historic peak in last year like SHK(0016), China Life(2628), PetroChina(0857) and China Mobile(0941) etc. Surprisingly these underdogs are also, or at least once, regarded as star stocks.
It seems choosing the right stocks is still the key point in terms of Buffet's buy and hold strategy but it is easier said than done. A Monday morning quarterback is of course always right. Without a crystal ball, one can only rely on the historic trend of the stocks for clue. In my post stock picking make easy I raised the idea of picking stocks with a long upward trend, say, 15 years in the hope the trend can continue even after a crash.
Apart from a track record of upward trend, if a stock is giving out a steady growing dividend payout every year in the past 10 years. If there will not be a big change in its fundamentals then it is likely that it will keep paying a promising dividend in the years to come. Naturally nobody likes to see his/her portfolio's value is cut by half or even by 80% but when a crash happened then this is the life that investor has to live with when he/she does not has a crystal ball to cash the portfolio before the crash.
While the fall in stock prices in a crash is substantive but one can choose to change the mentality to perceive it in another way. Perhaps people can imagine they are the owners of the businesses which they have stock holdings. I believe Li Ka Shing is not bothered at all even the stock prices of his companies fell in any of the past crashes because he knows his companies are still making money for him, disregard the stock price level. So as long as the portfolio of their stocks are with a solid business model that can survive this crash then people can just leave them alone and just wait to let them to climb to, hopefully, an even higher peak after this drought.
Rather than focusing on the fluctuation of the stock prices in their portfolio, perhaps one should spend more time on scrutinizing the business model of their stock holdings instead. If your stock holding displayed an upward trend in the past 15-20 years, giving you an annual 5%+ dividend and a growth on the absolute dividend amount over the years, and most of all, it shows a track record that it could make an even higher peak than that before this crash, then does it upset you?
2020年3月18日 星期三
Correction or crash?(3)
Right after my second post with the same title Correction or crash?(2) in Mar 12, the stock markets allover the world experienced a horrible Friday in the following day and days of whipsaw fluctuation. The HSI even saw the 22500 level when it hit the day lowest point.
As mentioned in the second post, three technical analysis suggest a very likely southward development for the HSI. The three technical analysis, ranging from short to long term, are the Head and Shoulder formation, supportive line formed after resisting two attempts and the possible Wave C according to Elliot Wave Theory.
Having said, it is still too early to conclude a crash is definitely on its way and there is still hope despite the recent plunge, 22.7% low of the latest peak, looks really in bad shape. The main reason lies on the hypothesis that despite of the divergence between the DJI and HSI since 2018 but in most of the time the two indexes are synchronized in direction. The recent whipsaw in the U.S. market is mainly profit-taking driven and partly event triggered by the global pandemic that sparkle the worry of worldwide recession if the pandemic persists for a long time, say a year or even longer.
The conspiracy in the U.S. market is that Trump will do everything he can to restore the three major indexes in the U.S. back to a relatively high level for the sake of his second term of presidency. The performance of the stock markets was used by Trump as the score of his office of presidency. There is about half year to go prior to the election, as long as the pandemic can be contained and compounded with the global monetary and fiscal stimulation measures that floods the financial world with excessive liquidity, the U.S. market could be saved, perhaps. The liquidity spillage over the Hong Kong bourse might save the HSI as well.
There are several footholds to gauge the possible development of the HSI. As the Index has already dipped below the first foothold of the supportive line formed after the two attempts in 2018 October and 2019 August at 24800 then the next foothold is the target of the head and shoulder formation which is around 23000 where the HSI is nagging in these past two days. A further drop below this level could mean the test of the last foothold of being a correction at the 61.8% adjustment of the total rise from the valley in 2008 till the historic peak in 2018 which is around 19400.
As long as the HSI can stay above the 19400 level, despite it is a huge fall from the historic peak but it will still be a correction because it will rise again and theoretically there should be an even higher record in the future. However, if this last foothold is lost then a true crash is really unavoidable as it is quite evidential that Wave C is really on its way. Judging from the record in HSI except the first ever crash in 1974 that the Index has dropped from 1774 to 150, the following 10 crashes since then ranged from -48% to -103% of the total hike with the average around -80% as elaborated in my first post Correction or crash?.
Will the HSI be back to or even fall below the 10676 in 2008? Let's wait and see!
As mentioned in the second post, three technical analysis suggest a very likely southward development for the HSI. The three technical analysis, ranging from short to long term, are the Head and Shoulder formation, supportive line formed after resisting two attempts and the possible Wave C according to Elliot Wave Theory.
Having said, it is still too early to conclude a crash is definitely on its way and there is still hope despite the recent plunge, 22.7% low of the latest peak, looks really in bad shape. The main reason lies on the hypothesis that despite of the divergence between the DJI and HSI since 2018 but in most of the time the two indexes are synchronized in direction. The recent whipsaw in the U.S. market is mainly profit-taking driven and partly event triggered by the global pandemic that sparkle the worry of worldwide recession if the pandemic persists for a long time, say a year or even longer.
The conspiracy in the U.S. market is that Trump will do everything he can to restore the three major indexes in the U.S. back to a relatively high level for the sake of his second term of presidency. The performance of the stock markets was used by Trump as the score of his office of presidency. There is about half year to go prior to the election, as long as the pandemic can be contained and compounded with the global monetary and fiscal stimulation measures that floods the financial world with excessive liquidity, the U.S. market could be saved, perhaps. The liquidity spillage over the Hong Kong bourse might save the HSI as well.
There are several footholds to gauge the possible development of the HSI. As the Index has already dipped below the first foothold of the supportive line formed after the two attempts in 2018 October and 2019 August at 24800 then the next foothold is the target of the head and shoulder formation which is around 23000 where the HSI is nagging in these past two days. A further drop below this level could mean the test of the last foothold of being a correction at the 61.8% adjustment of the total rise from the valley in 2008 till the historic peak in 2018 which is around 19400.
As long as the HSI can stay above the 19400 level, despite it is a huge fall from the historic peak but it will still be a correction because it will rise again and theoretically there should be an even higher record in the future. However, if this last foothold is lost then a true crash is really unavoidable as it is quite evidential that Wave C is really on its way. Judging from the record in HSI except the first ever crash in 1974 that the Index has dropped from 1774 to 150, the following 10 crashes since then ranged from -48% to -103% of the total hike with the average around -80% as elaborated in my first post Correction or crash?.
Will the HSI be back to or even fall below the 10676 in 2008? Let's wait and see!
2020年3月14日 星期六
Did we go too far?
As many other countries, apart from the epicenter China, were infected with the novel coronavirus, the WHO finally admitted that it is a global pandemic and truly it is that despite not every nation in the world but all continents with human habitat have become infected areas now. Interestingly it seems China not only "exported" the disease but also the way of the public health handling. Many countries now mimic the sealing up of districts or even cities with outbreak. Some like Italy and Spain even went to next level to seal up the whole country and imposed residential quarantine in the whole nation. It seems Herd Behaviour is in play again now, and as usual.
There is a word of wisdom saying that one's tonic could be the poison of other. Sealing up the entire city or even a nation could do more harm than good when without a thorough examination on the long term effect but just brainlessly and blindly follow what China did on the blockage in the Hubei province where the Wuhan City is as well as the outcome. So far it seems China has contained the outbreak within the Hubei province by sealing up and imposing residential quarantine over the 59.2 millions of population. The success is indeed a Pyrrhic victory and it was the last resort of the lesser evil option when the patients are way much more than the capacity of the local medical system. Most of all, this measure would not has become effective without a powerful central government, or in other name, a totalitarian administration. This is exactly what the democratic nations are lack of.
The effectiveness of the Hubei blockage also lies on the China context that she is a vast country with 13+ billions of population. The powerful central government can coordinate its resources other than the Hubei province effectively and efficiently to implement whatever measure deemed to be necessary to deal with the outbreak in a relatively small fraction of the whole nation. Sealing up an entire province with 59.2 millions of population could be a detrimental hit on its economy but it is still not up to an arm or leg to the whole nation. Without such background the sheep nations who brainlessly follow what China did could just put themselves into an economical impasse. Residential quarantine means no productivity at all for the entire nation or the related district, without the effective and efficient support from an outside source, their economy could quickly be suffocated. Revenue lost during the sealing up is gone forever like barber shops, cinemas, restaurants, gyms, amusement parks and transportation of all sorts...etc and even after the outbreak the future consumption just cannot compensate the already lost revenue so recession in those countries or districts is literally something for sure.
As what I put in my post Is A Trade Worthwhile that we should examine the probability as well as the payout whenever we decide to bet or invest. The same theory holds true when facing a risk that consideration should be put on how likely and what the damage will be. This novel coronavirus is said to be highly infectious so if there is no enough protective gears for everybody then the probability of contracting the disease is very high. This is exactly the case allover the world but the key point lies on the extent of the damage even if infected. The mortality rate, according to the WHO and the factual statistic from most of the infected countries also show that it is around 3-4% as a whole. This mortality rate is based on death toll against the confirmed infection but it is quite sure that the actual infection rate must be much higher than what it is known because many countries are just in shortage of the testing capability to verify all the vectors, especially for those asymptomatic. The disease could be less fatal than it appears to be, definitely far less than a common flu.
We must admit that we are living in an imperfect world that we cannot have the cake and eat it too. The experience for those areas with earlier outbreak could be a good reference to the late comers. China is the epicentre and Hong Kong is indeed very much synchronized on the infection. Despite there is no statutory citywide residential quarantine here in Hong Kong yet some businesses have virtually nearly come to a halt like the tourism, hospitality, dining and most retailing except grocery. So the impact on those nationwide and citywide sealed up is unavoidably comprehensive and even bigger than that on Hong Kong. Some medical experts already hinted that this virus is not going to subside soon or even probably to be with us for good. In that case, is the world really sustainable with the current mode of counter measures?
Did we go too far in light of the economic damage vs the public health crisis?
There is a word of wisdom saying that one's tonic could be the poison of other. Sealing up the entire city or even a nation could do more harm than good when without a thorough examination on the long term effect but just brainlessly and blindly follow what China did on the blockage in the Hubei province where the Wuhan City is as well as the outcome. So far it seems China has contained the outbreak within the Hubei province by sealing up and imposing residential quarantine over the 59.2 millions of population. The success is indeed a Pyrrhic victory and it was the last resort of the lesser evil option when the patients are way much more than the capacity of the local medical system. Most of all, this measure would not has become effective without a powerful central government, or in other name, a totalitarian administration. This is exactly what the democratic nations are lack of.
The effectiveness of the Hubei blockage also lies on the China context that she is a vast country with 13+ billions of population. The powerful central government can coordinate its resources other than the Hubei province effectively and efficiently to implement whatever measure deemed to be necessary to deal with the outbreak in a relatively small fraction of the whole nation. Sealing up an entire province with 59.2 millions of population could be a detrimental hit on its economy but it is still not up to an arm or leg to the whole nation. Without such background the sheep nations who brainlessly follow what China did could just put themselves into an economical impasse. Residential quarantine means no productivity at all for the entire nation or the related district, without the effective and efficient support from an outside source, their economy could quickly be suffocated. Revenue lost during the sealing up is gone forever like barber shops, cinemas, restaurants, gyms, amusement parks and transportation of all sorts...etc and even after the outbreak the future consumption just cannot compensate the already lost revenue so recession in those countries or districts is literally something for sure.
As what I put in my post Is A Trade Worthwhile that we should examine the probability as well as the payout whenever we decide to bet or invest. The same theory holds true when facing a risk that consideration should be put on how likely and what the damage will be. This novel coronavirus is said to be highly infectious so if there is no enough protective gears for everybody then the probability of contracting the disease is very high. This is exactly the case allover the world but the key point lies on the extent of the damage even if infected. The mortality rate, according to the WHO and the factual statistic from most of the infected countries also show that it is around 3-4% as a whole. This mortality rate is based on death toll against the confirmed infection but it is quite sure that the actual infection rate must be much higher than what it is known because many countries are just in shortage of the testing capability to verify all the vectors, especially for those asymptomatic. The disease could be less fatal than it appears to be, definitely far less than a common flu.
We must admit that we are living in an imperfect world that we cannot have the cake and eat it too. The experience for those areas with earlier outbreak could be a good reference to the late comers. China is the epicentre and Hong Kong is indeed very much synchronized on the infection. Despite there is no statutory citywide residential quarantine here in Hong Kong yet some businesses have virtually nearly come to a halt like the tourism, hospitality, dining and most retailing except grocery. So the impact on those nationwide and citywide sealed up is unavoidably comprehensive and even bigger than that on Hong Kong. Some medical experts already hinted that this virus is not going to subside soon or even probably to be with us for good. In that case, is the world really sustainable with the current mode of counter measures?
Did we go too far in light of the economic damage vs the public health crisis?
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