The Fang Commentary

Behavioral Finance Presentation

2011-04-25T07:37:00.000-07:00

Confessions of a Value Investor- A Few Lessons in Behavioral Finance Here is one of the best presentation on investing and behavioral finance I've seen. Learning about our intrinsic biases is the first step towards making disciplined and rational decisions in any investment.

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Marc Faber's Investment Advice

2011-04-25T07:16:00.000-07:00

Today I come across a page called "What Every Investor Ought to Know" from Marc Faber's GloomBoomDoom.com. It puts a historical perspective on many "popular" beliefs which are flawed or simply wrong. It shows how "investment rules" that come from "studying the winners" is subject to the survival bias, which means the study often neglects the...

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Budget Cuts, Really?

2011-04-08T22:16:00.000-07:00

Finally Washington has reached a deal to avoid a government shutdown. After days of drama and a scare of a potential government shutdown, the law makers finally "compromised" to settle for a $39 billion cut for this year's federal budget. While president Obama hailed the deal as "the biggest annual spending cut in history," let me put...

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Japan's Nuclear Crisis and Uranium

2011-03-16T07:22:00.000-07:00

One of the lessons we learned from history is that whenever a disaster happened, investors panicked and oversold. One of the opportunities that stems from the recent nuclear crisis in Japan is the dumping of uranium shares by investors. No doubt, governments throughout the world would rethink the development of their nuclear power...

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A Correction in the Stock Market is Imminent

2011-01-31T00:58:00.001-08:00

After a nice run-up, the buying in the stock market seems exhausted. Current investor sentiments are as bullish as those in 2005. Therefore, from a contrarian point of view, a stock market correction is imminent. On one hand, the FED, lead by Bernanke, seems to be determined to support stock prices. Therefore, the...

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ESI: A Value Play

2011-01-26T07:48:00.000-08:00

ESI is a provider of postsecondary degree programs in the United States. With unemployment hovering around 10% persistently, more and more people are looking for further education to sharpen their skills and to become more competitive in the job market. Currently the education sector is very much ignored by investors, yielding great...

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Gold Correction and Buying Opportunity

2011-01-21T01:16:00.000-08:00

(Source: StockCharts.com) After the powerful running in the second half of 2010, gold price is undergoing a correction. How deep this correction would go depend on how determined emerging market central bankers are about raising interest rates. All the money printing over the past two years is manifesting in rising food and...

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Bob Farrell's 10 Rules of Investing

2010-11-26T13:07:00.003-08:00

Bob Farrell, the chief stock market analyst for Merrill Lynch and a wall street legend had 10 rules for investing. As the increasing volatility in the markets often takes us on an emotional roller-coaster, these 10 rules can serve as a guidance to bring us to reality. Let's see what the rules are and how they apply to the current...

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Who is the currency manipulator?

2010-11-20T20:21:00.003-08:00

Everyone. Last Friday morning, FED chairman Bernanke delivered a speech accusing China of being a currency manipulator, which threatens the global economic recovery. Ironically, he went on to defend his QE 2.0, which prints another $600 billion dollars to support the ever growing national debt. It appears that in the face of...

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A Market Correction Is Overdue

2010-11-09T22:30:00.001-08:00

With the advent of QE 2.0 and strong earnings of companies, the risk of the much expected double-dip is reduced. Although stocks offer some protection against inflation caused by money printing, the market gains are often offset by the loss of purchasing power of the currency. In case of hyper-inflation, money would flow out of the country...

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Is Gold In A Bubble?

2010-11-09T06:35:00.001-08:00

Recently Gold price has surged above $1400, and silver has made an 30-year high. Many people may ask, "is gold and precious metal in a bubble?" (Source: StockCharts.com) To answer this question, we first need to define what a bubble is. In generalizing the financial bubbles in history, I come up with the following...

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The Commodity Bull Market

2010-11-01T21:27:00.001-07:00

Recently commodities have been rallying in response to the FED's second round of Quantitative Easing (QE 2.0). In the short term, the commodities market might be over-bought and have a correction should QE 2.0 turn out to be more conservative than expected. In addition, a very possible Republican victory over the election for...

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Japanese Export Stocks

2010-10-05T20:33:00.001-07:00

Recently, the Japanese central bank interfered the market and announced plan for quantitative easing. The reason for such action is simple: A strong Yen is hurting the Japanese economy, which is primarily driven by exports. In a world of competitive devaluation, every country (including the U.S.) want to achieve growth through...

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Money Printing and Stock Rally

2010-09-25T20:37:00.001-07:00

The world is wonderful again. After all, the stock market pulled of a strong rally in the mist of extremely bearish expectations from the investment community. But contrary to many believers, the recent rally did not happen because the economy is improving. The real reason behind the recent rally is very simple: Money...

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Two High Potential Stocks: LOGM and QLIK

2010-09-22T19:45:00.001-07:00

Here are two high-tech stocks that I believe have great growth potential. LogMeIn, Inc (ticker: LOGM) - This company is providing remote desktop functionalities for computers. When installed with LogMeIn, a computer can be remotely controlled in any browser, even behind firewalls or routers. In addition, LogMeIn provides its...

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The Rise of the Global Consumer

2010-09-13T23:44:00.001-07:00

Over the past two decades, the driver of global economic growth has been the rise of the American consumer. With interest rate in a perpetual down trend, credit growth has become the dominant trend behind American consumers. Credit cards, Mortgages, Equity Lines, Car Loans and bunch of other financial gimmicks have drove the American...

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The Bond Bubble

2010-09-09T00:27:00.001-07:00

If I have to identify one bubble in the world right now, I would certainly point to the U.S. Treasury bond bubble. As investors and central banks pile their money into treasury bonds for safe haven, they are overlooking the fact that the bond market is in fact most dangerous. Let's put treasury yields into a historical...

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Hindenburg Omen, end of summer rally

2010-08-26T19:19:00.001-07:00

The summer rally is officially over, and it is marked by the appearance of the Hindenburg Omen. If you have not heard of the Hindenburg Omen before, let's just say it is fairly accurate in preceding market crashes. After days of closing lower, the market index is short term over-sold, which might present a brief rebound in the...

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The collapse of US middle class

2010-07-26T22:18:00.001-07:00

Recently there is a Yahoo tech ticker article listing 22 statistics proving the collapse of U.S. middle class: 83 percent of all U.S. stocks are in the hands of 1 percent of the people. 61 percent of Americans "always or usually" live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.66 percent of...

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A case for investing in Vietnam

2010-07-20T22:25:00.001-07:00

The current global financial slump surely produce some interesting investment opportunities in emerging markets. While the BRIC countries (Brazil, Russia, India, China) becomes popular investment destinations, they are too well-known for my taste. This is not to say that the BRIC countries are not good investments, in my opinion there...

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Biggest Academic Blunder in Finance

2010-07-16T03:20:00.001-07:00

During the height of the real estate bubble, people used to think that housing prices would NEVER fall. During the height of the dot-com bubble, economists and investors thought that stock prices would go up FOREVER due to the "new economy" It is such delusions of "100%" certainty that fuel the development of great bubbles...

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An upward correction to entice the hopefuls

2010-07-07T07:52:00.000-07:00

Stock price never fall straight down during a bear market. There are always little rallies that sucks in the optimistic hopefuls. I believe we are at that point now. Short term stocks are very oversold right now and a convincing rebound might be ahead of us. I expect this coming rally to be stronger than the last one, and might open some...

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Market resumes its down trend

2010-06-30T22:19:00.001-07:00

The cup-and-handle pattern is finally completed. I hope everyone reduced their equity holdings during the June rally as I recommended. The downward pressure is amazing, as the rally I expected shows up as a little upward correction. It was so short-lived that I did not even get a chance to short the market. (Source:...

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Short Term Rally and Medium Term Top

2010-06-16T01:45:00.001-07:00

The stock market is poised to rally in the short term, as I predicted. The first indication, is my TFC Oscillator: The indicator (red line) is bouncing up from the bottom, indicating that the recent up movements in the S&P has increasing bullish backing. Then as we look at the number of S&P 500 stocks trading above their...

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A Wall of Uncertainties

2010-06-13T09:19:00.001-07:00

Looking into the medium term future, there is a wall of uncertainties in the global macro picture that is putting a glass ceiling on investors' risk appetite. Let see the major ones: 1. Euro-mess. Although the EU has come up with a $1 Trillion dollar shock-and-awe rescue package, Euro would still face extreme pressure. The...

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