Strategies

Most books on Sector Rotation have one strategy so it is easy to follow. I recommend glancing thru the entire book. Then select the recommended strategy depending on your knowledge, your risk tolerance and available time for research.

My book has 10 strategies in sector rotation from simple market timing to rotate between SPY and cash to the more complicated ones. You can combine the strategies such as Strategy #1 (Market Timing) and #8 (Calendar). Many strategies share common topics such as ETF Analysis. Because of this, the flow of the book is not linear and appears to be more complicated. However, this book tries to flow as linear as possible.

Besides market timing and finding last month’s (or last 60 days or last 90 days) best-performed sector, some sectors reverse their trend very fast. From my limited testing, I found using 60 days is better than using last month. To limit market loss, use stop orders (i.e. when the price falls into a specific value, sell it via a market order). When the market is peaking, I prefer not to own it or am more cautious. Many learned it the hard way during the internet crash in 2000 and the recent bio tech crash.

Most are short-term strategies and it means you should not keep the selected ETFs or starts for too long (one to three months for me). It would take from one to three years to recover from a market crash. Hence, maintain cash (or buy contra ETFs for speculative investors) in the beginning. Buying stocks in Early Recovery (specified by me) is a long-term strategy.

Start with one (rotate between SPY and cash recommended) and use a virtual account from one of the free sites such as Investopedia. Some strategies may be repeated in the book on Investing Strategies.

Strategy 1: Market Timing

The Power of Market Timing” should convince you to rotate an ETF such as SPY and cash (or an ETF for short-term bonds) would give an incredible return. In you are aggressive, replace part of the cash with a contra ETF such as SH. All other strategies should follow this strategy. When the market tanks, most stocks will tank. Refer to Common Tools #1.

Strategy 2: Rotation of 4 Sectors

Rotate sectors via ETFs and/or mutual funds. When the market is risky, move them to cash, short-term bond ETF/mutual fund, money market fund or a combination of the above and reenter when the market is not risky.

We can beat the market by rotating one ETF that represents the market such as SPY and cash (or short-term bond ETF) via market timing.

During market uptrend, rotate the following four ETFs could be more profitable. Be warned that short-term capital gain in taxable accounts is not treated as favorably as the long-term capital gain; check current tax laws.

The allocation percentages depend on individual risk tolerance. You can use indexed mutual funds. Compare their expenses and restrictions. Some mutual funds charge you if you withdraw within a specific period.

Select the best performer of last month (from Seeking Alpha, cnnFn, or the ETF/mutual fund site). I prefer 45 days instead of one month as they are not too volatile. Add sector ETFs to the four ETFs such as XLY, XLP, XLE, XLF, XLU, IYW, XHB, IYM, OIL and XLU to expand your selection.

ETFs	Money Market	US	International	Bond
Fidelity		Spartan Total Market	Spartan Global Market	Spartan US Bond
Vanguard		Total Stock Market	Total International Market	Total Bond Market
My choice	Fidelity	SPY	Vanguard	Fidelity

Suggest %
During Market plunge	90%	0%	0%	10%
After plunge	10%	60%	10%	20%

Explanation

· The above are suggestions only. If your broker offers similar ETFs, consider using them.

· Check out any restrictions of the ETFs.

· 4 ETFs (one actually is a money market fund) are enough for most starters. They are diversified, low-cost and you do not need balancing except during market plunge (refer the chapter on Detecting Market Plunges).

· The percentages are suggestion only. If you are less risk tolerance, allocate more on money market fund and/or bond ETF.

· Have at least 10% allocated to the money market fund. When there is a mild market dip, move the money market fund to the US equity fund. Move it back to money market when there is a mild market upsurge. If you do not have time to check the market, allocate this 10% to the bond ETF.

· When the market is risky, reduce stock equities (i.e. increase money market and bond allocations).

· The symbols for Fidelity ETFs are FSTMX, FSGDX and FBIDX.

· The symbols for Vanguard ETFs are VTSMX, VGTSX and VBMFX.

· To boost performance, add GLD, the gold ETF.

· Again, do not invest during market plunge as indicated by my market timing techniques.

If you are more advanced, use additional sector ETFs to rotate. Find out the current winners from many sources including CNNfn.com. Also buy long-term bond funds (such as 30-year Treasury) when the interest rates is 10% or more. I have covered the basics in sector rotation.

# Filler: Victims of our own success

A higher living standard means higher wages, more protections to our workers and more regulations for our environment. All these will make us less competitive.

Strategy 3: Rotation of more Sectors

It is similar to the Strategy 2 but includes more basic sectors. Add a contra ETF such as SH to take advantage of a falling market. Add the following sector ETFs to the four sectors described in Strategy 2: XLY, XLP, XLE, XLF, XLU, IYW, XHB, IYM, OIL and XLU. They should cover most of the sectors.

Start keeping the top two sectors to start. The allocation percentages depend on individual risk tolerance. You can use indexed mutual funds. Compare their expenses and restrictions.

Select the best performer of last month. Besides cnnfn.com and Finviz.com, the current, favorable sectors can be found in many web sites including SeekingAlpha.com and Fidelity.com (customers only). Following the top performer(s) for the last month is following the short-term trend. In addition to the last month, following the top performer(s) for the last 3 months is following the trend for the intermediate trend.

As of Feb., 2016, the utility index within S&P 500 has been up about 8% year-to-date while S&P 500 was down by about 8%. It is another example that the correct sector rotation is profitable.

The primary sectors are: Basic Materials, Consumer Discretionary, Consumer Staples, Energy, Financial, Health Care, Industrial, Technology and Utilities. Click the links or search from Wikipedia for description of these sectors.

https://www.fidelity.com/sector-investing/overview

We can sub divide a sector into industries. For example, Technology can be divided into Computer and Software. When computer industry is good, it does not mean software industry is also good. Some industries such as banking software can cross more than one sector.

The above links describe sectors pretty good by Fidelity with the exception of Technology, which is divided into several sectors such as Software, Computer and Telecom by Fidelity. Here are my views on the major sectors. Many vendors including IBD provide industry rankings. Here is my additional description to cover the basic sectors and some will be described in the appropriate chapters.

Consumer Staples and Discretionary

Consumer Staples are food, beverages, household products and the products we buy as necessity. They are recession-proof. The US products have demonstrated high quality and safety. With the growing middle class in developing countries such as China and India, we expect they should grow outside the USA. Currently it is not due to tariffs.

Consumer Discretionary are just the opposite.

Besides introducing the sectors and their corresponding mutual funds and ETFs, I introduce how to evaluate sectors fundamentally and technically. For beginners, skip the rest of this section.

Reference

ETFs / Mutual Funds in Appendix

Quick Analysis of ETFs in Common Tools

Sectors to be Cautious in Book: Finding Stocks

Technical Analysis for Sector Rotation in Book: Technical Analysis

Links

A list of sectors.

http://www.investorguide.com/sector-list.php

Check’s sector analysis.

http://seekingalpha.com/article/2806655-the-stock-market-2015-a-sector-by-sector-valuation-perspective-part-1-an-overview

Strategy 4: Sectors in market cycle

Here are the favorable sectors in different phases of a market cycle. Here is my suggestion

Market Phase	Favorable	Unfavorable
Early Recovery	Financial, Technology, Industrial	Energy, Telecom, Utilities
Up	Technology, Industrial, Housing
Peak	Mineral, Health Care, Energy, Long-Term Bond, Consumer Discretionary
Bottom	Consumer Staples, Utilities	Consumer Discretionary, Technology, Industrial, Long-Term & high-yield Bond

The sectors that cause the recession usually take longer time to recover. In 2000, the technology sector was not favorable in the Early Recovery phase, contrary to the above table. In 2007, the financial sector was not favorable in the Early Recovery phase. These are the “offending” sectors that cause the plunges.

In a recession, we usually cannot cut down on consumer staples and utilities, but we can cut down buying consumer gadgets. Companies usually postpone investing in equipment and systems during a recession and expand when the economy is humming.

All the description in Section I and III apply here. The next chapter describes the market cycle and how I define he phases of a market cycle.

Sectors according to the business cycle

Market Cycle is usually ahead of the Business (economic) cycle by 6 months as a rough prediction. In the 2008 market cycle, it is not due to the excessive printing of money.

During a recession some sectors such as Consumer Staples and Health Care work better than other sectors such as Technology. They will oppose their roles during the go-go era.

Some sectors are more volatile than others. Some sectors such as Health Care would be benefited by the growing and aging global population.

Sectors	Major Industries	Favorable
Basic Materials	Metals, Mining, Chemicals	High inflation / Growing economy
Consumer Discretionary	Auto, Building, High-end Retail	Low interest rates
Consumer Staples	Food	Recession
Energy	Oil, Gas, Exploration	Growing economy
Industrial	Machines	Economic recovery
Health Care	Delivery, Drugs, Biotech	Recession for Delivery
Financial	Bank, Insurance	High interest, Growing economy
Technology	Computer, software	Growing economy
Utilities	Electricity, Gas	Recession

Reference

Market Cycle in Book: Market Timing

Actions for different stages of a market phase in Book: Market Timing

Strategy 5: Country sectors

The current events as of 5/2014, Russia (Ukraine incident) and S.E. Asia (the Vietnam riots) are not good countries to invest at least for the next two or three years. However, Vietnam with low wages could be the next China. As of 2016, the US is still a good place to invest. Again Section I and Section III apply here also. For example, use the P/E to evaluate an ETF corresponding to this country.

1 Aging global population

The aging of the global population is due to the proliferation of baby boomers after WW2.

· India will suffer from the population explosion despite the abundance of younger citizens.

They will eat up all the limited food and consume most of its limited natural resources. They will run out of water in 100 years which is also controlled by China as more water will be directed to the north of Tibet. There are too many problems that cannot be resolved easily. There is no bright future for India. I wish I were wrong as a poor India would affect the rest of the world.

http://en.wikipedia.org/wiki/South-North_Water_Diversion_Project

They classify themselves literate if they can write their name in any language compared to 1,500 Chinese characters for China. Chinese have nine years of compulsory education. These statistics are just being manipulated.

Source: Ted Talk.
http://www.ted.com/talks/yasheng_huang.html

The brain drain is alarming as the most privileged / educated do not want to wait for India’s infrastructure, its economy and its governance to be fixed.

I hope rich countries like the U.S. will not take too many doctors / nurses from poor countries such as India as we’re doing now. This is the worst disservice to a poor country. We deprive thousands from medical care for each doctor we import. Why do we send our doctors to help the poor while we take their doctors? It just does not make sense. There should be more foreign aid allocated to medical training to poor countries.

Just compare the sub way system and the number of high-rises in India to any Tier 3 city in China. The top Indian city just built its sub way recently in 2011 while Hong Kong has developed into a modern metropolitan with a modern and extensive sub way system many years ago. As of 2012, more than half of India’s population live in less than $2.50 a day (the UN definition of poverty is $2.50 / day).

India has to understand its problems first before they can fix them. It has to fight inefficiency, corruption (partly due to inefficiency) and protectionism (to improve quality and encourage foreign investment). Copying China’s model is a good idea. China’s model is to create specific economic zones close to a port with the essential infrastructure for that area. You need to build infrastructure like highway, electricity… for that area first. It should target its products first to the foreign market and then include the home market.

The 2011 Indian Kolkata airport has limited road access while the 1980 Hong Kong airport is supported by extensive suspension bridges. Without the road access support, any airport would not be world-class as demonstrated by all major airports in the world. Documentaries on both projects are available from Netflix.

Some told me it could be old, wealthy families controls India's economy and they do not want changes. I argue the opposite is true. Expensive projects usually allow the corrupt rich and the local governments to steal money from public projects.

· China still has plenty of cheap labor.

Cheap labor will be minor but education will be important as they need to move up to the next level of industrialization with higher-value products. China is already there in many areas.

China has its own problems, and plenty of them, but demographics are not the major one. Gender imbalance, pollution and corruption are many among others.

Click this link http://bit.ly/ybAnoW to compare India and China.

· Russia and Brazil still thrive on commodities and oil as long as global economy grows.

Russians fit my Coconut Theory. They become lazier (and more intoxicated with Vodka LOL) as the economy continually grows from its wealth of natural resources including oil. As long as the global economy is humming, there are demands for these resources, and vice versa.

· Africa and some S. American countries.

The explosive population will bring miseries to their worlds. There will be more wars for food and life expectancies are already lowered. The citizens will migrate legally and illegally to richer countries like the U.S. for a better living. If the farming technology to produce more food with less farm land did not improve drastically over the last 50 years, the world's supply of food now would not meet the demand. As 2012 closes, there are higher food prices due to the floods and droughts all over the world. It will continually be rougher for the poor countries that cannot afford to pay for it especially when China and India have more cash from their exports.

· The U.S.

In 2023, the U.S. may look like Japan is today as most developed countries whose populations shrunk to below zero growth. However, the U.S.'s black and Hispanics have a higher fertility rate and the U.S. has more immigrants than all other countries combined. The U.S. will have its different problems / advantages as below.

The U.S. welcomes immigrants (as opposed to Japan). Most qualified Indians are welcome and so are Chinese (who come for economic reasons, to escape from pollution, or because of corruption prosecutions).

In the U.S., today's minorities will become the majority. If you look at their high school dropout rate, social welfare recipient percent, prisoner percent, etc., we do not have a bright future. There will be more political leaders from these groups as we usually vote for politicians that belong to the same race as ours. These are facts and it might be offensive to you if you're a minority.

When we do not have jobs for everyone, a large population is a big burden. We have recent college graduates begging for any job for years, lines for unemployment and welfare offices are getting busier. Why we encourage illegal aliens to come here for jobs and welfare is beyond my comprehension.

The brightest future for us is agriculture and its demand from many countries grows by leaps and bounds. The other is American culture, like movies and music since English is, and will be, the most popular language. The recent discoveries in shale gas and oil are very promising. It could lead us to be a major energy exporter in the next 50 years. Military weapons are a big seller that I do not think it is good for the rest of the world.

Starting in 2012, the baby boomers are retiring (those who were born after the WW2). Hence, we will have about 20 years of increased entitlements such as Social Security considering the average life expectancy of about 82 years. Now we should have a boom in health care delivery.

· Japan.

Japan does not have a lot of natural resources, and the educated citizen is their most important resource. Japan will suffer the most due to aging population. However, most of us will still drive a car from a Japanese company, play video game on Wii or PlayStation… Its competitors (now Korea and later China) will share their market. Japan will continue its lost decades to another decade. Japan seems turning around in 2013 but it could be just “the dead cat bounces”. Only time can tell. Depreciating its currency further stimulates its export at least in the short term.

Conclusion

Investors should look at the sectors that will be benefitted from the aging population for the next 20 years. They are health care delivery, medical equipment, drugs, elderly housing and all sectors that cater to this growing age group.

Afterthoughts

http://ebmyth.blogspot.com/2013/11/more-on-aging-population.html

Links

Water re-directed.

http://en.wikipedia.org/wiki/South-North_Water_Diversion_Project

Ted Talk.

http://www.ted.com/talks/yasheng_huang.html

Filler:

###

Aging population with baby booms makes a lot of sectors and industries grow such as health care, drugs, materials, energy… The impact of the growing middle class in China will be huge.

2 EU’s mess

We follow the similar procedure in finding the reentry points and use VGK, an ETF for European countries.

There are two sectors that bring down the financial crisis in 2007 (or 2008 for some). We should reenter the European market via technical analysis (TA) and via fundamental analysis.

Technical Analysis

There are two ways to find the reenter points after 2007.

1. Use the same chart in described in TA chapter as follows. Bring up Yahoo! And then Finance from the browser. Enter VGK, an ETF for Europe. Select Chart, then SMA (single moving average), and enter 350 days for reenter points (different from our usual 30, 60, 90 or 120 days).

Loosely we have two major reenter/exit sets: 08/31/09 to 08/01/11 and 08/20/2012 to 01/13/14. Without considering compounding, we calculate the averages of these two sets of data.

2. From the Market Timing chapter, reenter the market 2 years after the initial plunge for offending sectors. They are not the offending sector but the sovereign debt is partly the culprit. Hence we use 18 months instead of 1 year for the general market or 2 years for the offending sector.

Assuming 01/14/2008 the market starting plunging, the reenter date is 07/14/2009.

Source: Yahoo!Finance (http://ebmyth.blogspot.com/2013/11/screen-vgk-350-day-sma.html)

The 350-day Single Moving Average could be a good guide to trade VGK, an ETF for European countries. Buy when it is above the moving average line and sell when it is below.

The following table summarizes the returns based on reenter points to 01/13/2014.

	Reenter Date	Return	Annualized Return	Beat SPY
Chart	08/10/09	-9%	-5%	-185%
	08/20/12	29%	21%	0%

Average		10%	8%	-93%

18 months	07/14/09	59%	13%	-42%

If you have a time machine, you may not want to invest in VGK at all as SPY beats both strategies by a wide margin. However, the annualized return is 8% and 13%, not too far away from XHB’s 21% and 21% respectively. It seems Europe had more ups and downs during the recovery and the recovery is slower than the US market.

Fundamental analysis

Here are my personal thoughts as of 2009. I prefer to stick with the technical analysis and fundamental analysis is used to further analyze the housing market such as the cities that may have better recoveries. By the time you read this article, the information may be obsolete. Use it as a reference for future guidance.

As of 1/1/2012, my predication about EU’s mess that we talked about more than two years ago (my blog mentioned it long before most media). Even today (9/2013), there are not a lot of changes and EU is still on its early stage to recovery. Here are my random remarks.

· EU will be dissolved or will at least kick out the cheaters, free loaders and parasites such as Greece. In any case, Euro will depreciate a lot compared to gold [Update as of 2013: It has]. Germany wants to keep Greece in the union despite of all the problems and little to gain. Germany have to compromise to the opposition from her own citizens in not giving up their own money.

· After that, a default is not a bad option.

· There will be conflicts in the citizens in Greece between those who have (still a lot collecting over $40,000 USD pension) and those (especially the young generation) who have to suffer due to passing the debts / miseries to them.

· Greece will recover faster if it has its own currency and it can default its debts. At that time, it would be profitable to invest in Greece.

Their government will be halved and the salaries / pension obligations will also be halved. To conclude, it will run the country about ¼ of the original cost. Tax revenues will come back with tourists looking for bargains. When the other industries such as shipping (when global trade improves) and processing olive return, the investment will have a good chance to gain 100% in a year. Timing is everything.

· The days living off from the treasures / commodities they stole from their colonies have been long, long gone. Most European countries need to live within their means.

· The lesson of having a good life without working hard (short work week and long vacation) is learned again and again. First it is Ireland, Iceland, then Greece, then Spain/Italy and now the USA.

· When they learn so many bitter lessons, they will not repeat them for a long while. The USA should learn the same lessons as we seem to be heading to the same direction unless the shale energy rescues us.

· EU will be a problem for years to come. When the country has that high debt with regard to GDP, they will not be competitive especially the drain of their best citizens to other countries.

· Decoupling is the solution. The U.S. and China will not be stupid or big enough to rescue a sinking ship.

Afterthoughts

· Update on Greece as of 1/2013.

Greece should be bottom out in a year. Investing in Greek stocks at that time would double your investment for the following reasons.

1. Greece is small, so it may not be a big deal to recover as Iceland did. It is better than Iceland with its nice climate and many attractions for tourists.

2. Besides attractions for tourists, Greece has beautiful beaches. They need to cut down protests before the tourists would return.

3. The government could be mean and small with about 1/4 of the previous expenses to run it.

4. The olive industry and the shipping industry will return big time after the global recession.

However, there are no cures for laziness and stupidity; another living proof on my Coconut Theory. The major hurdle is that there is a brain drain of able citizens and the retirees suck up the resources of the country.

· Roots of the problem.

1. Euro is initially a good idea especially for tourists. However, it forces the rich countries to pay for the free loaders.

2. Laziness is a human nature. When you work 30 hours (even less if you consider the long vacation) a week, you cannot compete with folks who work 50 hours a week.

3. The loots from the days being colonial masters were long gone except the displays in museums.

4. Socialism encourages folks to be parasites until the host dies.

3 The myths on China

"China as a sleeping lion whose roar would one day shake the world." - Napoleon.

Yes, China is roaring in this decade and the roar is getting louder and louder.

The most successful story in the last two decades

When the USA played the China card against Russia, it took away the embargo. Deng Xiaoping started an economic zone to build infrastructure (electricity, road, etc.) in a fishing village in South China and the rest is history. It is my Coconut Theory that when hard working folks have a chance to sell their 'coconuts', they will prosper. Lifting millions from starving to death is no small task. To me, Deng and Nixon should receive a Nobel Prize. However, since China has dominated the world, except the last three centuries, it is no surprise to me.

The Myths on China

Sam Walton was a patriot. He preferred to make less money by not selling Chinese goods. He estimated wrongly the profits from the Chinese products. When he died, the company turned into stores for Chinese products making his heirs the richest family and many of his investors millionaires.

Investors should not follow these myths that have been spread by TV networks and even professors.

· A TV network advocates "Made in USA" in a series.

· A professor from a prestigious university believed India would replace China as their population is younger.

· A professor from one of our top universities believed colonization is good using Hong Kong as an example.

· China is evil and they are communists.

· They're stealing our jobs, technologies and movies.

· All Chinese products are inferior products.

All the above are wrong or not totally correct and I will dispute them one by one.

Globalization

China is one country in the chain of the global economy which promotes free trade. Buy the product from the country that produces the best product at the least cost. Globalization works and debunks the myths.

· China is moving up the product-value ladder. Some manufactured products, such as garments, will be moved to countries such as Vietnam and Burma with wages lower than China. This TV series “Made in USA” makes you feel good and hence makes it easy for them to sell their advertising.

In reality, manufacturing in many products will not come back to the USA due to our high wages, regulations, taxes and robots. In a sentence, we're hurt by our own success that leads to higher living standard, protecting our workers, stricter environment controls… We need to give up these industries that we cannot possibly compete in and concentrate our efforts on high-value industries and industries we can compete in.

· Product quality is controlled by outsourcers. Do you find product quality problems in Apple's products with most of them manufactured in China?

· When you have a new technical product, you may want to assemble in South China, where most other components such as cable and battery are available

· In many cases we are copying China’s mobile technology where China depends on. China has been in the frontier of several industries.

· From 2013 to September, 2016, China has only one failed rocket launch. It is the cheapest and most reliable launch platform. We cannot use it due to security argument. However, it provides a good incentive for the space station that China is building one themselves. By 2025, China could be the only nation on earth that has a space station. Europeans are learning Chinese.

· China has never wanted to be number one. From Opium Wars to 30 years or so ago, China had been bullied by foreigners helping Brits pushing opium to China. China built the Great Wall to keep the invaders away. They could have colonized many countries in the 1400s, but they did not.

· China is not stealing our jobs, but globalization does. Most companies can outsource all functions of the company to other countries where they can find the best workers at the least costs.

· China is polluting the world. Aside from the pollution from factories producing products for export, energy consumption per capita is far less than ours. China is #1 or #2 in implementing most green energy technologies. Unfortunately, China is blessed with coal, but not blessed with the less-polluting gas and oil.

· China is stealing our movies and intellectual properties. It is the same for most developing countries. China will enforce intellectual properties before it can move up to the next phase to a developed country. Our companies have to protect our secrets. Even the US had been in that stage briefly. Charles Dickens was so angry that he did not want to visit the US.

· China is a closer to a developed country by now. Its previous 10% growth is not sustainable but it has been impressive. China will stay in the 5% range for a while

· Yes, China does have many problems that most countries are facing such as pollution, regulations, corruption…

We can shut ourselves out from all foreign trades, but it will harm us more than help us. We have to enjoy a $100 toaster to start. All the chicken feet, a delicacy for the Chinese, will be dumped into the ocean. Our high-tech companies, farmers, movie industry will suffer.

Communism and China

China is only communist in the second "C" of CCP, China Communist Party. Chinese are more capitalist than us. If you do not work, you do not eat well. This simple rule motivates its citizens to work hard. The safety net is improving, but it is a long way from our social security system; our system may be too generous as it has encouraged too many free loaders and cheaters (also in the corporation level too). It explains why they have a high savings rate. Most companies in China do not have unions, inconveniences of labor laws and sometimes companies even receive help from corrupt officials. After a taste of capitalism, China will never return to communism, which encourages folks to be lazy.

Human rights and Tibet

When you compare present day China to the China 30 years, 20 years or even 10 years ago, human rights have grown by leaps and bounds. To me, food and shelter come first before human freedom. Human freedom should be allowed gradually and it requires educated citizens that China has but not in the rural areas. Allowing freedom too fast would cause chaos (my thought and is debatable).

Before the 'liberation' of Tibet, only monks could get an education. One-child policy does not apply to Tibetans and other minorities. Their culture is maintained throughout from the experiences in my two visits in the last 10 years.

Hong Kong

Present and past, Hong Kong's wealth depends on its proximity to China, contrary to the colonialism theory a professor had stated. I had bet on the iShares MSCI Hong Kong ETF (NYSEARCA:EWH) (an ETF for Hong Kong) at the start of the Umbrella Protest. My order had not been executed due to my low price. The reason that the stock market did not drop further could be the plan allowing citizens in China and Hong Kong to buy stocks from the opposite exchanges. It will materialize soon after they finalize the tax and regulation details. Hence, the Chinese have more investment choices instead of investing in ghost cities.

India

Indians compare themselves with Chinese, but Chinese usually compare themselves with the USA. India will not catch up with China in this decade. It is more corrupt than China, more protective than China, and has more social inequality than China. The Tier I cities in India cannot even compete with the Tier II cities in China when you compare the infrastructure, high rises, subway, airport, etc.

The growing population of India eats up all the limited resources of the country. As a Chinese saying goes, you get rich by making fewer babies and building more roads.

China's advantages

· Huge internal market. The scale of economies is quite obvious.

· An educated and hard-working work force.

· Relatively low wages for qualified engineers and researchers. The wage of an average US engineer is about the total wages of four Chinese engineers from my rough estimate. It is giving some technology companies problems, such as Cisco.

· Government incentives and subsidies.

· Most big projects and major purchases to foreign countries have a clause of technology transfer. If we do not oblige, they buy them from your competitor. The trick is to use the money for research (not bonuses to the management) and hold out the top technology.

· Bitter tough lessons in the past 250 years starting from the Opium Wars to WW2.

· One-party political system is not a bad thing. By the time China connects most, if not all, the Tier I cities with high speed trains, we're still arguing about which political party is on top for the first one.

I’m not naïve to believe that China does not have their problems. For starter, they need to control air pollution, water pollution and food quality sometimes at the expense of jobs. They need to have more regulations to protect their citizens.

The success of China is good to the world

After the last earthquake struck China, Chinese and the overseas Chinese helped to rebuild the disaster region without asking other nations for help. If China is as poor as before, you may have 20% of the world population begging for money.

When you need a drug to cure a terminal disease, do you care whether it is from the USA or from China? It is too expensive to develop a new drug in the USA.

China has rescued many US companies such as GM from go bankrupt. So is Volvo. China will buy many bankrupted US companies if we allow them. Some bankrupted US companies do not have much salvage values, but we argue not to sell them to China based on national security. Most do not make sense.

Vietnam is copying China's model and it is at least 15 years behind. Eventually, many factory jobs will be replaced by robots and countries such as Vietnam with labor cost even far lower than China. It already has attracted many industries such as textile that cannot afford the rising wages in China. The latest riot against foreign factories (mostly from Taiwan) is more political and not against the Chinese. The Chinese there have been more integrated with the Vietnamese than most other SE Asian countries.

Resource-rich countries such as Brazil and Australia benefit from the demand in China. They will return to the normal trade levels when the global economy improves. Macau and Hong Kong have been benefiting from Chinese tourists. With the suppression of corruption, the gambling industry in Macau will suffer. Due to the recent Umbrella Protest, Hong Kong will suffer from fewer Chinese tourists.

China has become number one in tourist spending in France. It is similar to many other countries. Most companies producing luxury products benefit. The myth of an average Chinese citizen making less than $5,000 is debunked by these tourists. First, the median salary is not $5,000 and the size of the middle class is huge. Most countries benefit with the rise of China today, except Japan, which has an islet dispute with China. Philippines, backed up by the USA, has similar problems with China. Hope they will resolve the problem diplomatically by sharing resources.

Not too long we will compete with China on higher-value products as we’re competing with Western Europe now. There are many recent examples that worry me more. A Chinese company captures 70% market of the consumer drone that was invented by our military. Chinese military drones cost about one quarter (or half by some estimate) of ours and they have little restrictions to whom they sell to. Chinese has a monster machine to build bridges. They have more than the high-speed rail than all other countries combined. These are a few of many examples. When the average Chinese student spends at least two more hours in studying than ours, they will achieve more in life and catch up fast.

Afterthoughts

Being born in Hong Kong, I am naturally biased. I try to present this article with facts. China has a lot of problems and they are common to most developing countries.

The following data are obtained from Barron’s article dated on Nov. 17. 2014.

	Vietnam	Cambodia	Laos	Thailand	Myanmar
GDP Growth	5%	7%	8%	3%	8%
Export Growth	12%	13%	17%	0%	16%
Population	93 M	16 M	7 M	68 M	56 M
Monthly MFG Wage	$250	$130	$140	$370	$110

ETF	VNM			THD

Thailand is the most developed with a thriving tourist industry. However, political unrest would take it several steps back. This article was published in Seeking Alpha on 11-2014, a site for investors.

http://seekingalpha.com/article/2644635-debunk-the-myths-on-china

China 4/2018 YouTube: 1 2 3

4 The states of the United States

Contrary to popular belief, we DO make and build something especially per capita wise. We're still the largest economy on earth and are number one in most disciplines in science and technology. We have a stable government with an enviable constitution, workable regulations, highly-educated citizens and the strongest defense (or offense to me).

Our government and the private citizens (Gates and Buffett for example) donate funds and assistance to poor countries more than the other five richest countries combined. We provide food to the world. We export our culture via movies and music. We accept foreign students to enrich our culture, fund our colleges, and provide us with skilled workers when they graduate.

We have a lot of innovations such as Facebook. Most of our products have high profit margins such as airplanes, heavy equipment, high tech products including Apple's consumer products and medical equipment. Nobody can deny that.

Our success leads to higher living standard. Naturally the higher labor cost and more regulations to protect us and our environment follow. Too many regulations would restrict businesses in taking risks (such as developing new drugs and nuclear reactor technologies) and add costs to product developments.

We have to leave the low-end products to low-wage countries such as China. It is called free trade and globalization, which would benefit all participants if they play the game fairly. China's 1.35 billion citizens would not be able to buy our expensive products if they do not have the cash from selling their products to the world.

We have to protect those products that we have an edge. It is not an easy job just by comparing the quality of our high school education to the rest of the world. Japan and S. Korea have passed us in auto and consumer electronic industries. China is at the gate with bigger impact in the future. China is catching up with us. In addition, it has a large internal market, plenty of qualified engineers / scientists, low-wage workers and incentives / guidance from the government. The most important is their desire and spirit to succeed after three centuries of humiliation.

God still blesses us with the new discoveries of shale energy that could extend our prosperity to another 50 years. It gives us more time to fix our problems, but time is running out. The benefits of the shale energy will be clearer by 2015. It could turn out to be a pure fantasy or even a sham. We are still a net natural gas importer (most from Canada) and our gas industry is currently sitting on heavy losses.

Compared to China, we have far, far more farm land and natural resources especially per capita wise.

Our welfare system is too generous due to our previous economic booms. If the able welfare recipients lose the free medical care for taking a job, do they work? They're lazy but not stupid. With the long dependence on this welfare system, they cannot break the viscous cycle of poverty. Multi generation of teenage mothers is one among many examples.

The new immigration bill could be a disaster. If it is passed, how many new legal residents will collect welfare (they can't today as they're illegal) and how many illegals are encouraged to cross the defenseless border. I hope the new immigrants will contribute more than burden our society. Only time can tell. However, protecting the border is easy by severely punishing the employers. When there are no jobs, they will not come. The USA is still the best country for immigrates.

There are many frauds and fats that the government can trim. The government employees are assigned to tiny work load and they are overly compensated. Should we assign them to chase after the frauds in Medicare, food stamp and cheatings in disability entitlements that are so common?

The two wars are bankrupting this country and we need to prevent starting future wars and end the current wars. As of 2013, our military budget is larger than the total of the next top five countries combined.

From this article, you know the government can fix a lot of our problems. Printing money is not the solution, but the problem by itself.

We need to encourage productivity and discourage consumption. Buying a car is consumption and building a bridge is improving productivity. Welfare to the able poor is consumption and teaching work skills to the poor is improving productivity that leads to production increase.

What worries me most is: We’re declining while many developing countries (China in particular) are surging up.

The future will be decided by our high school system which is falling apart. Our society is too permissive from gun controls to legalizing drugs, which may bring infant defects. Our lawyers sue every one for profit no matter how ridiculous the cases are.

Solutions are quite simple

To summarize, we should cut most expenses and balance the budget. It is hard to implement as most do not want to bite the bullet. We're a nation of free loaders with over 40% not working.

1. No illegals to legal. When they become legal, they will collect welfare legally and bring their families in for the same reason.

2. Train and encourage the able welfare recipients to work. Cutting their benefits in taking a job will not encourage them to work. Clinton's Initiative has more holes than Swiss cheese.

3. Cut down our generous welfare. That's why we have three generations of teen age mothers. Laziness is a human nature.

4. End the endless wars. If they do not want to fight for their own freedom, why should we (suckers in their eyes)?

5. We cannot borrow forever and pass our debts to next generations. USD will not be a reserve currency in 10 years. Printing money excessively is a short-term solution but a problem long-term problem.

6. Invest in our infrastructure.

7. Cut down foreign aids. A big brother is only in the mind of our leaders.

8. We need a small and efficient government. Guard changing when another party takes over is expensive.

Afterthoughts

· Will the new immigrants strengthen our society?

http://www.americanprogress.org/issues/immigration/news/2012/12/10/47406/progressive-immigration-policies-will-strengthen-the-american-economy/

· Immigration reform will likely depress the average wage over the next 10 years, according to the Congressional Budget Office and also will likely increase our burden in our welfare and entitlement systems.

· Paul said:

This WAS a country where government did not buy votes. When my grandparents came to the U.S., there were no Federal social programs, no Social Security, no Medicare, no welfare and no income taxes. Millions poured into this country looking for opportunity -- not a safety net…

· From ZeroHedge: (http://www.zerohedge.com/)

The only recovery you'll see this summer is after a night of heavy drinking...

Nothing has changed since 2008, nobody was arrested, no laws put in place, nobody held accountable. We all know that companies like JP Morgan and Goldman Sachs bundled toxic sub-prime mortgages into securities and paid off the ratings agencies to rate them AAA then bet against them using CDS with companies like AIG. So what does the government do? Reward their criminal and fraudulent behavior by completely bailing them out and then giving them oodles of cheap credit.

· The government needs to encourage folks and/or train them to work. Raising minimum wage is making the problem worse. The government should encourage businesses to stay in the USA and not to tax the very rich excessively.

· My recent blogs.

My update. http://tonyp4idea.blogspot.com/2014/08/good-deeds-and-bad-deeds.html

Immigration and Racism. http://tonyp4idea.blogspot.com/2014/08/immigration-and-racisim.html

Legalized drugs. http://tonyp4idea.blogspot.com/2014/08/drug-kills.html

The Constitution.

http://tonyp4idea.blogspot.com/2014/08/change-constitution.html

Links:

Military budgets:

http://247wallst.com/2013/06/27/countries-spending-the-most-on-the-military/?link=mktw

5 Issues that could change the US economy

With expensive parking fees, it is quite cost effective to commute to the city on Saturdays. On our way back at about 4 pm, the bus was full of Spanish-speaking workers. I bet most if not all are illegals working in the suburb such as our Mall, the hospital and many restaurants. Why illegals? I bet most legal citizens would get welfare instead of working in that shift. If you work, they will take out the freebies such as health care in Mass. They are lazy but not stupid. The illegals do not have this option.

What will happen if the politicians turn the illegals to be legal? There will be nobody doing these jobs. No one in the right mind wants these jobs as it is far better to collect welfare. Why politicians would make this stupidest decision? They want to buy Hispanic votes.

In addition, more politicians side with the welfare recipients. Since 40% of the population do not pay Federal taxes, they have to satisfy their needs in order to buy votes. Representation without taxation is worse than taxation without representation.

That's why our taxes are so high and the good jobs are outsourced as we're no longer competitive. That's why we have a high exodus of the top 1% as they do not care about the entitlements but their taxes. Also, that's why we have the highest exodus of corporate headquarters recently so they can lower or in many cases do not pay their taxes.

When one is allowed in, they can bring their entire family in. The US will become a welfare state. On their first day in the US, they will ask for the direction to the welfare office. If you have an elderly, you can collect a nice salary for taking care of him/her. What a country! Great for the immigrants, bad for most workers and incentive for the rich to give up citizenship.

The middle class who cannot go away is squeezed from both ends.

Strategy 6: Asset class

It includes house, oil, commodities and precious metals.

1 Market timing by asset class

Two major trading strategies are:

· Buy high and sell higher.

It is a kind of momentum play. You may keep these stocks for less time (say, less than three months). The momentum could change very fast. In my momentum portfolio, I keep most of my stocks not more than a month.

· Buy low and sell high.

When the asset class is totally out-of-favor and it has high value, buy. It is a value play. You are swimming against the tide. You need to hold these stocks longer (say, longer than 6 months) for the market to realize its value.

It is not possible to predict correctly the peaks and bottoms of any asset class consistently. However, #1 usually starts first and followed by #2. The holding period is just a suggestion.

Your success will be improved by using Technical Analysis correctly. Try the 60-day moving average to start. Buy when it is above the average and sell when it is below. Next, try the 30-day moving average and many other technical analysis indicators such as exponential moving average and different days for the moving averages. Basically there is a tradeoff on switching too frequently and reacting too lately.

Try out different asset classes such as gold and oil. To illustrate, no one can predict that gold price at $1800 is the peak. If you buy coin coins at $1000 and ride the gold wagon to $1600, you're doing quite well. However, the gold price at $1000 could be interpreted as the peak unless you have a time machine. J

My experience in gold

I had gold coins at about $400 each. Gold did not appreciate much for over 20 years. When its price rose to $800, I sold some. I made 100% return, but it did not even beat inflation. If I invested in stocks instead of gold coins, I would be far better off especially with dividends. When gold rose to $1000, I sold more. Our rational thinking (part of human nature) would not allow us to hold these coins until 1,800. The moral is no one can predict the peak value of an asset and act accordingly.

Trading coins in your local shops would take a lot of commission even if it is safer to do so. The coin shops will not report your sales to IRS if the sell is below a certain amount as of 2011. Check the current rule.

Afterthoughts

· A case of ‘Buy High and Sell Higher’ or ‘Buy High and Sell Low’.

Today 8/6/13, my buy order on TA was executed in the morning after the earnings conference. The stock plunged about 30%. The lessons are:

o The stock was up to $12 form $3 in last two years. It has appreciated a lot already. I should avoid this stock as I prefer ‘Buy Low and Sell High’ strategy.

o Should have checked the recent earnings revisions. It has not scored well in this aspect. I have ignored this indicator that is available in one of my subscriptions.

o It is still a value stock. The stock price has been priced in. When the earning does not meet the expected, it plunges.

2 Housing recovery?

There are two sectors (housing finance) that caused the financial crisis in 2007 (or 2008 for some). We should reenter the housing market via technical analysis (TA) and via fundamental analysis.

Technical Analysis

There are two ways to find the reenter points after 2007.

1. Use the same chart in described in TA chapter as follows. Bring up Yahoo! And then Finance from the browser. Enter XLB, an ETF for housing construction. Select Chart, then SMA (single moving average), and enter 350 days for reenter points (different from our usual 30, 60, 90 or 120 days).

There are 2 or 3 exit points and followed by brief reenter points. They are noises and they do not change the final performance.

2. From the Market Timing chapter, reenter the market 2 years after the initial plunge for offending sectors (they are Finance and Construction for 2007). Assuming 10/12/07 the market starting plunging, the reenter date is 10/12/09.

The following table summarizes the returns based on reenter points to 01/13/2014.

	Reenter Date	Return	Annualized Return	Beat SPY
Chart	08/10/09	-9%	-5%	-185%
	08/20/12	29%	21%	0%

Average		10%	8%	-93%

18 months	07/14/09	59%	13%	-42%

The Chart method makes more money but the annualized return is the same. However, the ‘2-Year’ strategy beats SPY 100% better than the Chart strategy.

Fundamental analysis

· Location.

NYC does not lose a lot in housing values. Las Vegas, many cities in Florida and sunny area does. Cities that are going to bankrupt such as Detroit and a few cities in California are great bargain but too risky.

A well-maintained house in a good neighborhood at 2002 price is a good bargain when you compare to build the same house with both increased material cost and eventually labor cost. You may get a newer and modern house, but the location is usually better and is less pricy.

· Inventory still high.

We do not have a lot of building since 2008. The inventory is very low now but some banks are still holding a lot of foreclosed properties and properties that should be foreclosed. Some properties are in very bad shape and they should be demolished.

· Who drives the housing market.

If we have a W-shaped recession and/or a lost decade similar to Japan's, the housing recovery will take longer than two years. The builders will be profitable if they can manage their resources and projects on smaller houses for today’s smaller and / or less affluent families and more elderly housing for the aging population.

One of the major forces that trigger the housing boom is the college graduates. When they have children, it is time to buy a house. It does not look good today as most are under-employed or unemployed with large college loans. The U.S. economy may recover without job recovering. Many jobs have been outsourced and most lost jobs will not return. The rosiest sector is energy. We may have 2.5 million new jobs in this sector in 3 years. The house prices in these selected cities skyrocket.

Are today’s houses affordable? You can afford a house costing 2 ½ of your yearly income. I would use 3 times today especially with the low interest rates and today’s rent alternative. As of 5/2013, the basic housing is on the cheap side for potential buyers especially for those who are still employed and it will remain so as long as the interest rates remains low.

Interest rates.

The housing market depends on interest rates more than most other industries. Low interest rates would make housing more affordable. That’s what happened in June, 2013 when the interest rates moved up from the bottom and the housing recovery came to a halt.

I bet the interest rates would be less a factor when the economy is fully recovered.

· Foreigner purchase is the key.

On the bright side, there are foreigners (a lot from China and some with money from questionable sources) want to buy them in cash. Finally we encourage rich immigrants who invest in the US. It also helps a lot of corrupt officials to escape prosecution by buying residency in the US. Some initial purchases have lost more than 25% of their investment, but some later ones have experienced more than 100% return. Timing is everything!

Compared to Hong Kong and most big cities in China, the US houses are bargains. Many cost about half a million to buy a 500 square feet apartment in a desirable area compared to some 3000-square feet mansions (relative to 500 square feet) in Southern states.

The quality in life is far better here in terms of air quality, water quality, food quality, education (ease to go to colleges) and opportunities.

Most Chinese and many Asians do not buy a house with street number 4 (pronounced ‘dead’ in Chinese) and bad Feng Shui that many sellers in Vancouver and Toronto have found out. Cities with better culture and well-known colleges such as Boston attract rich foreigners sending their children there. When I was in NYC, I (and 1.3 billion Chinese) would tell you Pam Am Building had bad Feng Shui as the road was running through the building. There are some locations where businesses fell one after. I can explain most are due to very bad Feng Shui. I am not superstitious, but good Feng Shui provides a relaxing living place.

Afterthoughts

· Is the recent (1/2013) rise in housing stocks justified? There are two camps of opposing arguments. Only time can tell which one is right.

For the low housing inventory and the slowly improving economy, it could be time to buy on construction stocks and REITs (especially the hospital REITs but not the REITs on mortgages). The recent recovery could be temporary due to lower inventory and the interest rates is climbing.

· If you believe the housing will be recovered soon and you do not want to buy specific construction stocks, try the ETF XHB.

· The housing market is irrational. ‘Buy Low and Sell High’ applies here. From an economist as of 5/2013: Comparing to rents and incomes, the overall housing market is still under-valued by Rabout 7% from the bottom of 15%. It was over-valued by about 40% in 2006.

· Before the takeover of Hong Kong by China, Vancouver properties doubled in values very fast. It is happening in some cities in the US by Chinese buyers this time. However, we do not see this effect here as Vancouver is small compared to the entire USA. It is a double-edged sword. The sellers are happy and the potential local buyers are not as they have to compete with foreigners who pay more and in cash.

· The average house has been increased excessively since 2000. As many times in this book, excessive valuation will bring down to the average value. Compare to Hong Kong and most big cities in China, our houses are still underpriced.

Depending on which yardstick you're using, you get different conclusions. The better one should be: The average house price should not be more than three times the average annual income.

· I remember Uncle Ben told us not to worry and four months later the housing market crashed. Cheat me twice, shame on me.

· When the economy returns, there will be more jobs and more folks buying homes. It is good for the housing sector. It even beats out the disadvantage of the higher interest rates, which is no longer needed to be lowered to stimulate the economy.

3 Commodities: bottom or mirage?

Most authors reveal a statement first and then illustrate with examples to substantiate that statement. Hence, such writers are always right. I am doing something just the opposite in this article. In analyzing what coal stocks to buy (the example) and you help me to verify the bottom for coal stocks (the statement).

This process has its risks, as I try to emphasize that investing is a prediction, which will not be 100% certainty. However, the better educated the guesses are, the better chances the predictions will be materialized. Even if that prediction is wrong, there is nothing wrong with the logic here.

Actually the recommended stocks should be bought in the future as it may not be the bottom today (7/4/13). Confusing? Read on.

Several articles convince me that commodity especially coal should be close to the bottom. Here are the links to these articles. That’s the reason why you want to read economic news to take advantage of any new opportunity.

1. The coming rebound of coal and coal stocks.

http://seekingalpha.com/article/1530202-the-coming-rebound-in-commodities-coal-and-coal-stocks

2. A credit analysis of coal mining companies.

http://seekingalpha.com/article/1509622-a-credit-analysis-for-coal-mining-companies

Is the bottom near for commodities?

For the last three years, the bottoms of coals stocks have been predicted several times. Nevertheless the coal stocks went up temporarily and then continued its bearish trend. Many coal companies could go bankrupt. I bet most of them will not and offer one of the best appreciation potential, but I do not go that far to proclaim it is one of the best deals in our generation.

Many experts believe natural gas would replace coal to generate electricity. The impact of natural gas will be even clearer by 2016. That may be true in the USA, but not in China and many countries. Even with all the nuclear generators on-line in ten years (2023), China will still depend on coal to generate more than 60% of its electricity.

The following tables may not look good on small screens. You can enter the link below to display it on a larger screen of your PC.

(http://ebmyth.blogspot.com/2013/07/screens-on-commodity-chapter.html)

The stocks

I include 15 stocks and one ETF for analysis. After the initial analysis, I classify them into the following groups.

	Coal	Gold miner ETF	General Mining	Steel	Petroleum w Nat Gas
No.	11	1	1	1	2
Stock	ACI,ANR,ARLP, BTU,CLD,CNX, JRCC,NRP, WLB,WLT, YZC	GDX	RIO	SID	CHK,DVN

Value

These stocks have very high potential for appreciation. However, they are risky. Nothing risked, nothing gained. Most have high debts (the average debt/equity is 133% in this group) and their survival depends on many factors such as the prices of the commodities. The following table concentrates on their values.

Stock	Price (7/4/13)	Forward Yield	Cash Flow	P/B	Debt/ Equity	P- Score
ACI	3.69	-35%	Worst	.3	184%	-4
ANR	5.33	-75%	Worst	.2	70%	-6
ARLP	71.06	10%	Average	3.6	109%	8
BTU	14.86	3%	Worst	.8	126%	-2
CHK	20.92	5%	Worst	1.1	106%	1
CLD	16.19	5%	Worst	1.0	83%	-2
CNX	27.12	10%	Worst	1.6	81%	-1
DVN	53.05	5%	Worst	1.1	82%	-2
JRCC	1.82	-80%	Worst	.3	255%	-5
NRP	20.48	10%	Average	3.4	172%	3
RIO	40.69	10%	Average	1.6	57%	0
SID	2.61	15%	Worst	5.6	329%	2
WLB	11.4	5%	Best			-1
WLT	10.79	-35%	Worst	.5	276%	-2
YZC	7.03	15%	Best	.5	90%	4

BTU has coal mines in Australia, which is closer to its primary customer, China. RIO has mines of different ores all over the world. ARLP and NRP are partnerships.

If you do not want to deal with extra effort in filing the tax returns, do not buy partnerships. I have not checked out the requirements for filing tax returns for ARLP and NRP.

GDX, an ETF for gold miners, is not included in the above table. It has a huge non-correlation between GLD, the ETF for gold, so I believe there is good value in gold miners. GDXJ (not included in this article) is a similar one for junior miners, which is too risky for me.

Most data are obtained from Finviz.com. Forward yield is my estimate and it is defined as forward E/P. Cash Flow is based on the free site Blue Chip Growth. Cash Flow and Debt / Equity measure whether the company will survive. The table does not include all the metrics. P-Score is based on my book Scoring Stocks and 3 is the passing grade.

I have two scoring systems. One is described in my book Scoring Stocks and the other one uses information from several subscription services. In general, the two systems are quite compatible. When the commodities are in the market bottom, the scores for these stocks would not be good. Actually most of them do not pass (the passing grade is 3).

YZC scores the highest and it has the high dividend yield.

ACI and ANR though risky have the most upside potential and both prices are less than 30% of their book values.

Risk levels

The following table summarizes how safe are the stocks.

	Safer	Middle	Risky
No.	3	6	7
Stocks	ARLP, NRP, YZC	CHK, BTU, GDX, RIO, SID, WLB	ACI, ANR, CLD, CNX, DVN, JRCC, WLT

My contradiction

I contradict myself in the following statements.

1. I do not trust the financial sheet of emerging countries including China. However, when many miners are foreign companies, I do not have a good option.

2. Mining is a sector I try to avoid.

It is extremely difficult to estimate how much ores (sometimes a miner owns several different ores of different grades in same or different mines) the company has; complicated by the complexities to extract and transport them. When those costs are greater its production price, the company will not be profitable. Understanding the market for ore futures is another discipline.

One potential problem of mining companies from many emerging countries is nationalization.

Timing

Besides ARLP, NRP and YZC as of 7/4/2013, I would select the following to purchase after another analysis in Nov. 1, 2013: CHK, BTU, GDX, RIO, SID and WLB. I would skip the worst scored stocks, which are too risky for me but they may have the highest appreciation. ACI and ANR are very tempting though.

Why November? Most of these stocks have been down for the year and there is more pressure to sell them for window dressing for fund managers in Nov. (even earlier) and for tax write-offs for retail investors in Dec.

Technical analysis will not detect the bottom, but the trend. When the trend is up, the risk is less but the opportunity to buy at the bottom is gone. Today, the trends of most of these stocks are down. I will explore whether there is a correlation of the bottom with the percentage from the last peak.

Timing is a suggestion and you buy the stocks at your own risk and risk tolerance.

My plunge into commodities

I could not resist and bought two stocks from the above list. As of 8/9/13, the performances are quite good.

Stocks	Buy Date	Return	Annualized return
BTU	06/24/13	18%	140%
GDX	07/15/13	14%	150%
FCX	07/31/13	21%	850%
DBC	08/08/13	2%	Too early
NGD	09/12/13	14%	Too early

FCX is too good a price to pass and the insiders bought many shares. Annualized returns usually have no meaning when the holding period is less than 30 days. The annualized return is calculated by the formula: Return * 365 / (days between the buy date and today’s date). For example, the annualized return for FCX = 21% * 365 (8-9-13 minus 7-31-13). The 850% return is not sustainable.

The return of DBC, an ETF for commodities, is tracked today 8/12/13. The above are actual and verifiable trades from my largest account. NGD, a gold miner, is added most recently and the return is calculated on 9/18/2013.

4 The fair price of oil

Oil will not run out at least in our generation especially with the new-found shale energy. However, peak oil has come and passed. The easy oil (closer to the surface and lighter) is getting scarcer. The heavy oil, the oil from the ocean and the shale oil (depending on the region) are more expensive to extract.

As of 1/2015, the fair price of oil to me is $85 (down from $95 two years ago). It is due to the abundance of shale oil and the slow demand in a poor global economy. When the production cost is over $80 (today it is about $65), it will not be profitable for many productions (the difference of $5 is for profit). As of 1/2015, there are two camps: 1. Believe the oil price will drop below $60 (from today’s $65) and 2. Believe the oil price will return above $80 soon.

I believe it will be back above $80 in a year. Many operations such as from oil sand to produce oil at the current price will not be profitable even in my optimistic prediction.

For this year, I would stay away from drillers and explorers and I am picking up those oil companies that have good expected P/E, low debts and have the production facilities to produce oil at around $80 per barrel. Even with all the safety measures, they’re still risky buy for my predicted oil price at $85. However, the potential appreciation could be huge.

I expect there will be higher demand due to the higher living standard in China and India, and the larger global population. It is also higher due to the depreciation of USD and inflation. Hence, we need to adjust its fair price every six months or so.

OPEC would like to maintain the oil price at about $100 at today's USD for longer-term profit. Every country within OPEC has its own agenda, political issues and economic issues and they most likely would not consistently agree on a specific price.

However, when oil is higher than $125 for a long time in today’s dollar, the alternative energies will be more feasible economically and conservation becomes more important. If oil price is a run-away to $150, we'll have another recession and that would bring the price back to the normal range. Economy adjusts the oil price to some extent and sometimes works better than OPEC.

Oil price has been fluctuating a lot in the last five years. It is purely due to speculation. The ease of money should cause inflation and inflates the oil price in particular. QE2 played a role, and so would be QEn if it will be materialized. The current restrictions in speculating commodities reduce the speculating on oil and could be the reason why oil price drops even with better economic outlook.

I do not trade oil unless it is priced to either extreme. When it was $35 per barrel, it was time to buy. When it was $140, it was time to sell. Adjust the numbers to today’s dollar. It is an example of “Buy Low and Sell High”. As of 1/2013, for the past 10 years, oil has an annualized return of 2.6% while inflation is 2.4%. The average return is negative after taxes and inflation. Unless you’ve a keen eye on oil, do not speculate on it. If you do, try the ETF Oil.

The biggest threat on oil and its producing countries is shale energy. From my prediction on 2/2013, oil price would rise until the shale energy will solve its extraction and transportation problems. At that time, oil prices would be under $100 in today’s dollar for years to come [as of 1/2015, the oil price is about $65].

Retail investors should stick on fundamentals: Buy low and sell high.

Afterthoughts

· The real competitor to oil is shale gas and the shale oil. The U.S. has found enough to supply the country for the next 50 years. We have to see how the events such as pipeline construction and environment damages are being developed.

· Some believe all the US interventions in the Middle East, including the recent turmoil in N. Africa and the counter attacks, are due to oil and its transportation to the U.S. At one time we only enforced no-fly zone on countries that have oil. If so, shame on us. If it is the modern Crusade, shame on us in misinterpreting religions’ preaching and the Congress which is controlled by Israel.

If we have enough shale oil and shale gas, we do not need to protect the oil route and we should have a peaceful world.

· Oil prices are moved short term by traders, midterm by expectation and longer term by supply and demand.

· GLD is an ETF similar to OIL with a different commodity. I wonder where they store the physical gold for GLD. Most likely they use derivatives. If so, it reminds of the derivatives created by Lehman Brothers.

· The price of every commodity is defined by supply and demand. When the global economy improves, prices of most industrial commodities will increase.

· The impact of China due to the improvement of their economy cannot be ignored. It will drive up the demand of most commodities – India to a smaller extent. Per capita wise, they still use far less commodities than the U.S. citizens after deducting the resources to build trinkets for export. However, their population is about 4 times larger than the U.S.

· To summarize as of 6/2013, commodities prices are affected by 2 major factors:

1. The USD. If we use a basket of commodities to measure the value of USD. A decrease in value of the USD will increase the commodities prices. The USD has been in a temporary peak.

2. Supply and demand. With poor global economies and the slowing down of China's internal growth (infrastructure and building...), the demand of industrial and construction commodities are decreasing and so are the prices. However, the US housing market is starting to boom (it could be a mirage and/or due to the shrinking inventory).

There are many other minor factors such as speculation...

· Unimaginable not too long ago, the U.S. will be the largest energy producer by 2017, according to IEA, but a net exporter by 2030 and energy independent by 2035.

· My view as of 1/2015. No one (except God and the Middle East terrorists) can really predict the short-term direction of oil correctly. However, the long-term direction is clear. It will be up. When? One year, two years or three years. I can tell you exactly “when” when I fix my time machine.

Links

Click here for a similar article.

http://seekingalpha.com/article/975661-how-oil-really-gets-priced

Peak Oil:

http://en.wikipedia.org/wiki/Peak_oil

Energy boom?

http://finance.yahoo.com/blogs/the-exchange/play-america-energy-boom-160057023.html

Bottom for commodities?

http://seekingalpha.com/article/1530202-the-coming-rebound-in-commodities-coal-and-coal-stocks?v=1372760509&source=tracking_notify

A list of commodity ETFs:

http://etfdb.com/type/commodity/all/

Direction indicator of gold price.http://seekingalpha.com/article/2374965-8-indicators-that-tell-us-where-gold-might-go-next

There are many articles on both camps predicting the oil price in SeekingAlpha.com. Here is one.

5 Falling oil price as of 1/2016

The oil price has plunged to $28.76 (peaking over $50 and $45 as of 7/2017) per barrel today. Trade USO, an ETN (for simplicity treat it as ETF) stimulating the price of oil. Oil price for the last 10 years from Nasdaq.com:

My predictions

Prediction #1

For the year, it will be in $25 to $40 per barrel. Personally I do not wait for $25 as it may never materialize.

Reasons:

· Global economies have not recovered yet.

· Iran's oil will add more supply.

· OPEC and Russia cannot trim supply as their economies depend on oil export.

Prediction #2

For years later, it will return to $50 and on its way to $100.

Reasons:

· Global economies will recover (they always do). Do not know when.

· OPEC will trim supply.

· Supply will be reduced due to the current cutting down on drilling and exploration.

· Global population growth.

· Inflation (about 3% per year).

· Historical price. Recently we had oil price below $30 and then it went up to $140. Adjusted for inflation, the current price is even less than the then $30.

· As a rough estimate (depending on individual oil fields), it takes about $50 to extract, market and explore one barrel of oil (i.e. the cost of goods).

It is better to shut down many of the oil fields such as ocean fields and oil sands at today’s $30 range. OPEC cannot cut due to the payments to the loans on many on-going ventures but they should in the future.

To supply the oil with the depressed prices is the same as spending all the money without caring about retirement.

Summary

It is a supply and demand play. It could also be a case of commodity dumping and the U.S. may try to protect its own energy industry – you hear it here first. Oil price will be lowered if the market plunges.

The Losers: OPEC. They tried to cut the price to bankrupt the shale energy ventures. You do not want to shake a baby too hard or drop a big stone on your own toe. Many lose the jobs in energy fields and railroad industry due to shipping less coal.

The Winners: Investors who buy at low price now and wait patiently for the long term. I hope we’re in this role. As history shown, crisis most likely is a profit potential.

Oil and the market

Today the consumers benefit from low gas prices. Airlines benefit too if they have not hedged on fuels or are not forced to buy at fixed prices from foreign countries. However, the stocks tank with the fall of oil price, so the saving in driving for most is not worth it.

Some still argue that oil price will go to $10. If it does, I will keep on buying. As from today's $28 to $10, you lose about $18 or about 65%. However, it has the potential to go back to $120 that would be more than 400% return from $28 and 1,200% return from $10. I'm buying OIL, an ETN (similar to ETF) that is supposed to float with oil price. UWTI (3X leverage) can triple your money in either direction. I do not recommend UWTI as in one day it could wipe up their entire investment. Ignore the weekly fluctuations due to speculation by traders and look for the long term.

Usually falling oil price would benefit the market in general. However, falling too much as today is not good for the economy. Usually the market is opposite of the oil price. Today it is an exception due to the oil producing countries including the Saudis and Russia dumping foreign equities to meet their obligations. I predicted when the oil price is at $85 per barrel, then there will be less dumping of foreign equities and the high oil will affect the market (or the market will be in opposite direction of the oil price again). The world economies are interconnected today better than before. When the U.S. market suffers, most other global markets suffer too. In addition, when there are major withdrawals from the U.S. funds, the fund managers have to sell their foreign holdings.

China cannot build storage fast enough. They need the oil as they're blessed with polluting coal but not with oil (even oil does not generate a lot of electricity). I recommend China to buy the futures of n years at y price. This will resolve the current fluctuation and bring back the market not to correlate with the oil price. Some argued that oil price has reached its peak and its average price is $35 for the last 70 years. He did not consider inflation. It is a big deal for 70 years – I remember I paid $1 for a Big Mac dinner 35 years ago and today it is about $7. He also did not consider all the easy oil has been gone – those oil that can be extracted without much drilling. Today $35 costs more than the production cost such as in off-shore drilling and oil sand.

There are many articles on the topic. Just google “Oil Price”. Here is one: 1.

Update as of 2/8/2016: Barron’s predicts the price will fall to $20 by April, 2016 and return to $55 by year-end of 2016. Buy OIL when it falls again and do not panic to sell. If the prediction is right, one can make over 100% in 6 months.

Update as of 5/2016: Barron’s prediction is mostly wrong as oil has passed $45 per barrel. It is due to unexpected events such as the fire in Canada.

I bought OIL in Jan. 19, 2016 (one of my purchases in this period). I expected to increase in price by 50% as the oil does, but it only increased 25%. What happened to half of my profit? Consider USO as an alternative to OIL.

Expecting oil price will appreciate, it is better to bet on oil service companies instead of OIL. Here is an article on how to play the oil commodity and a site on energy ETFs. I have the annualized returns of energy ETFs and CVX from Jan. 19, 2016 to May, 12, 2016.

Symbol	Description	Ann. Return
OIL	Crude oil	33%
USO	US Oil Fund ETF	112%
OIH	Oil services	80%
XOP	SPDR Oil & Gas	138%
IYE	iShr DJ US Energy	75%
XLE	S&P Energy	76%
CVX	Chevron	81%
Average		85%
SPY		32%

http://seekingalpha.com/article/3826986-buy-oil-sell-oil-instead-put-oil-pair-trade

http://www.etf.com/channels/oil-etfs

Exploring uranium

China will have 25 or so nuclear generators on-line by 2020, 4 years away from this writing. I hope it would give this metal a boost. With Japan’s problem, uranium demand was at its historical low after inflation adjustment. We need to account for the old (more than 30 years) nuclear generators that will be decommissioned. However, the net gain is still substantial.

Source: Index Mundi

The price fell from 60 to 27 and rebounded to the current 35. The Monday quarterback would tell you to buy it at 27. Similar with oil, it is not unreasonable to double the price. The question is when. It could be 3 years or as high as 15 years.

Mining could be a different story as they need to survive from this depressed price. URA is the only ETF I can find with uranium and over 100 M. URA has many mining companies included. I will evaluate the companies in the future and at the current time frame, it is too risky for me.

Update 4/2/2019

Crude oil is about $62 today, more than double the $30 I recommended. After reading articles on uranium in 2019, I think uranium is risky but could be highly profitable

An updated article on uranium.

https://seekingalpha.com/article/4252305-uranium-market-background-potential-investment-cameco

Strategy 7: Market correction

We have about 1 to 2 corrections every year – the frequency fluctuates. It provides a good time to enter. It is a great strategy in a sideways market: Buy at dip and sell at temporary surge.

Refer to Market Correction in Book: Market Timing (included in this book).

Strategy 8: Using calendar

Refer to Market timing by calendar in Book: Market Timing (included in this book).

There is no need to time the market from 1970 to 2000. From 2000 to 2014, the market crashed two times with an average loss of about 45%.

The apples you picked are sour but some other times are tasty from the same tree. You pick them the bad ones in the wrong time or the right ones in the right time.

Market timing is about educated guesses unless you have a time machineJ. Hopefully we will have more rights than wrongs when we follow general guidelines. It would reduce risk and could benefit us financially in the long run.

I divide the market timing in three categories by durations as follows. All time durations are estimates.

· Secular Cycle. Duration: 20 years.

· Market Cycle. Duration: 5 years.

· Correction. Duration: 1 year for 10% corrections and ½ year for 5% corrections.

Strategy 9: Interest sensitive

Buy long-term bond ETFs when the interest rates is high (say > 5%) and short-term bond ETFs when the interest rates is low (say < 2%).

As of 2016, high interest stocks and ETFs lose some of its previous luster.

Reference in this book:

My A.B.C. on bonds in Book: Trade

Muni Bonds in Book: Trade

Dividend stocks in Book: Dividend Stocks

Strategy 10: Sector subscription

1 Subscription services on sectors

When your sector portfolio is over a certain threshold (say 100,000), you may want to subscribe a sector service for your primary tool or just a second opinion.

There are many subscription services to advise us to switch between sectors, but you have to pay a fee. Most subscription services such as Zacks.com rank sectors include ranks for sectors.

The following is on sector funds (select funds in Fidelity’s terms). It also indicates that Fidelity is the leader in sector funds.

In 2013 most are doing quite good beating SPY by a good margin. Here are some of them.

1. AI Stock Forecast. 39% in 2013.

2. AlphaProfit Sector Investors’ Newsletter. 46%.

3. Fidelity Independent Advisor Sector Momentum. 39%.

4. Fidelity Monitor and Insight. 38%.

5. Fidelity Sector Investor. 46%.

It seems their returns are quite compatible to each other. It could be they use the same technique described in this book.

The above info is based on a MarketWatch article on sector rotation.

(http://www.marketwatch.com/story/the-top-5-fidelity-sector-strategies-of-2013-2014-01-15?link=MW_popular)

I have tried a fund that rotates sectors for you. At that time, the performance was not too good.

Additional resources

· Fidelity Sector Fund

Without doubt, Fidelity provides a lot of sector funds and some sector ETFs. That’s why there are so many investment newsletters on their sector offerings.

From AlphaProfit, the average Fidelity Select (same as sector) fund has outperformed the S&P 500 index by 4.7% annually over the last 20 years. Individual performances would be far, far better if you pick the right select funds.

I recommend picking 3 top select funds and rotating them every 3 months. There would be no need to rotate them if they are still in the top five. Sell all the owned funds if the market is. If you rotate funds in your taxable account, be warned to pay higher taxes if they’re profitable – check the current tax laws. This would be the least effort in implementing sector fund rotation using a proven newsletter such as AlphaProfit.

· Finviz.com.

It has the recent sector performance. Vector Vest selects the most timely sectors and industries. So are IBD, cnnfn.com and Zacks.

Links

There are three articles in Seeking Alpha on this topic.

Developing a Rotation Strategy Using Highly Diversified ETFs:

Part I, Part II and Part III.

http://seekingalpha.com/article/2045483-developing-a-rotation-strategy-using-highly-diversified-etfs

Sectors as of 7/2014.

http://seekingalpha.com/article/2322765-sector-rankings-for-etfs-and-mutual-funds

AlphaProfit: http://www.alphaprofit.com/

Strategy: http://etfdb.com/2013/3-sector-rotation-strategies-etf-investors-must-know/

Strategy 11: Top-down

Basically you pick the best sector and buy the best stocks within the sector. It is the more time-consuming task and the rest of the book is devoted to this strategy.

1 Top-Down Investing

Only buy stocks when the market is favorable. Find the best sector (better with subsector as explained later) and then the best stock(s) within the selected subsector. In doing so, our chance of successful investing is substantially increased.

It is so simple and it has been proven by many including myself. I just wonder why it has not been extensively practiced. I offer a simple trade plan as follows:

1. Do not invest when the market is plunging. I have a simple way to detect market plunges without any expensive subscriptions or tools. They have been proven in the last two market plunges since 2000. It will work in the future as it depends on falling market prices but I cannot tell whether it gives us the same, ample time to prepare.

2. Select the best sector (better with subsector which is the same as industry). For example, Technology is a sector. Computer and Software are subsectors under Technology. One could be a better timely than the other. For illustration purposes, I use sector for simplicity and most free sites do not sub divide the sectors into subsectors.

The best sector can be found in many free sites such as cnnfn.com and SeekingAlpha.com. Some sites use the equivalent ETFs. Many sites requiring subscriptions identify the best industries such as IBD (which also identifies the industry leaders), Vector Vest and Zacks.

If you’re a value investor, you may not want to choose the most-timely sector but the most under-valued sector. Value investors should hold the sectors/stocks longer (such as 6 months or even longer) for the market to recognize their values.

In addition, you need to detect sector/stock rotation by the institutional investors who control over 75% of all trades (i.e. smart trade or smart money). They will rotate sector/stock when they find better profit potential in another sector/stock.

If you do not have time to research on stocks, trade ETFs for sectors and skip the next step.

Many sites including Fidelity compare the metrics of the stock against similar stocks in the same sector. To illustrate, it makes more sense to compare the Debt/Equity in utility stocks than this metric to the general market.

3. The final step is to select the best stock(s) within the sector via fundamental analysis (including intangible analysis), insider trading analysis, institutional trading analysis and technical analysis.

Do not let the terms scare you. We will start with the simplest approach without any subscription and a lot of effort. The more time-consuming approaches and some even requiring subscription (not from me) will be described for future study.

4. The next step is when to reevaluate and sell the stocks when conditions change or you meet your objectives. If the market is plunging, sell all stocks.

Stick and repeat the entire process.

2 An example using Finviz.com

The following is an example. Fine tune the selection criteria according to your personal criteria and risk tolerance. You can select the specific Industry and/or Country.

· Bring up Finviz.com from your browser. Select Screener, the third tab. As of 3/24/2015, we have 7066 stocks.

· For illustration purposes, we would like to find stocks with double bottoms, a positive technical indicator. If not using the All tab, select the Technical tab. Select Pattern and then Double Bottom. Now we have 257 stocks.

· Select the Fundamental tab (next to the Technical tab). Select Forward P/E and then select “under 20”. Now, we have 86 stocks.

· Select Debt/Equity less than .5. Now, we have 45 stocks. Some industries are traditionally high in debts, so you can use ‘less than 1’.

· Select EPS growth Q-to-Q over 10%. Now, we have 19 stocks.

· Select the Description tab. Select Country to USA. Now, we have 17 stocks.

· Select Price > 1. Select Avg. Volume “Over 100K”. Select Float Short “Under 10%. Select Analyst Recs. “Buy or better”. Now we have 9 stocks.

Now we can evaluate them one by one using Fundamental Analysis, Intangible Analysis, Qualitative Analysis and Technical Analysis. The purpose of screening is to filter the 7000 stocks to a small number (9 stocks in this case).

Skip the stocks that have the Earnings Date within 2 weeks. If you already have too many stocks in the same industry, skip that stock. You can save the screen when you register with Finviz.com. It is free. Check the performance in 3 months or so.

Modify the screen with the Pattern changed from “Double Bottom” to “Head and Shoulder” and run the screen to demonstrate how we use different technical patterns for about the same parameters. The following table summarizes our common parameters.

	Descriptions	Fundamentals	Technical
1	Country = USA	Forward P/E <20	Pattern= Double Down
2	Float Short < 10%	Earning Growth Q-Q > 10%
3	Analyst Rec. Buy or better	Debt / Equity < .5
4	Avg. Vol. > 100K
5	Price > $1

This is a sample. Use it as a frame work to other screens. Here are my explanations on the selected metrics.

Description

· Most should stick with the three major exchanges. Indexes would limit you to blue chip stocks.

· From my top down investing, your stock appreciation is determined by the market, the sector and then the stock.

It gives you 8 sectors to select. Check out the best performance (I prefer 3 months) from the Group from the Home bar. Industry gives you the industries within the sector.

You can trade foreign stocks. I do not trust most financial statements of foreign stocks, esp. the smaller ones. For the last few years (as of 2015), the US stock market has better.

3 Using TA on sectors

There are 3 uses of TA for sector rotation.

1. Detect sector plunge and when to reenter the market after plunges.

2. Regular use (usually after its recovery from a plunge).

3. Detect market plunges and/or sector plunges.

#3 has been described on the chapter Spotting Market Plunges and it will not be repeated here.

The difference in #1 and #2 is in the number of days in SMA (Single Moving Average). Use 350 for sector plunge and reentry.

Use 30, 60, 90 or 120 for regular use (i.e. after the reentry from a market plunge) depending on how frequently you rotate. If you rotate in 60 days, use 60 for the average of number of days.

Exit / Reenter a sector ETF

To illustrate, the following example uses XHB (an ETF for the housing sector). Use the same chart for other sector ETFs such as VGK for Europe.

Produce the following chart by using Yahoo!Finance. Enter XHB and select Interactive Chart. Select SMA and then 350 days. Select Max for ‘From’.

Source: Yahoo!Finance. XHB on 350 SMA.

· Exit when the price falls below the red, single-moving average (the SMA) and enter when it is over the SMA. All the dates and prices are approximate and for illustration only.

· I use Max for the period. Let’s assume the chart instructed us to exit at $45 around 2006 and reenter on August, 2009 missing a loss of about $30 per share. Not too bad!

· There are brief exits and reentries before 2012. I call it noises. The gains and losses are negligible. However, make sure you exit and also reenter. If you use 60 days instead of 350 days in this example, you have more noises. If you trade the ETF more often, then you use 60 or 90 days. It depends on your risk tolerance and your time to trade. Sometimes the performance makes a difference in selecting shorter days, but not all the time.

· From the end of 2012 to today (10-2013), it gains more than 40% compared to -32% for the period for buy-and-hold. A difference of 62%! Even a difference of 10% would be great.

· The chart works at least for this period. It is every one’s guess whether it will still work in the future. I bet it will but as in life nothing is guaranteed.

· When a housing stock, the housing sector (XHB) and the general stock market all above their respective SMAs, the stock most likely will appreciate (again nothing is guaranteed).

· From my other chapters, the offending sector (housing and finance for 2007 market plunge) takes about two years to recover from the bottom.

I interpreted the bottom was 10-2007, so the recovery would start in 10-2009. If you bought XHB in 10-2009, you would have gained about 100% today (10-22-2013).

· Some sectors never recover such as the internet and some high tech companies in 2000.

Now, it is your turn to try out the chart. This time, use 60 for the number of days in SMA.

Debunk Myths in Investing

Sunday, January 12, 2020

Book 8 Sector Rotation: Strategies

Strategies

Strategy 1: Market Timing

Strategy 2: Rotation of 4 Sectors

Strategy 3: Rotation of more Sectors

Strategy 4: Sectors in market cycle

Sectors according to the business cycle

Strategy 5: Country sectors

1 Aging global population

2 EU’s mess

4 The states of the United States

5 Issues that could change the US economy

Strategy 6: Asset class

1 Market timing by asset class

2 Housing recovery?

3 Commodities: bottom or mirage?

4 The fair price of oil

5 Falling oil price as of 1/2016

Exploring uranium

Strategy 7: Market correction

Strategy 8: Using calendar

Strategy 9: Interest sensitive

Strategy 10: Sector subscription

1 Subscription services on sectors

Strategy 11: Top-down

1 Top-Down Investing

2 An example using Finviz.com

3 Using TA on sectors

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