Preparing for The North Korea Crisis Dilemma

The North Korea crisis can bring out nuclear war and eventually a nuclear disaster and a nuclear fall-out.


If war were to eventually happen, the further you are from the conflict zone - the better you are. This is because all the above 3 problems become less and less significant when you are further.


The only worrisome part is the nuclear fall-out which will eventually lead to "nuclear winter" or in other words ozone crashing down on earth, leading to blindness to all that come to its path. What's the use of all the wealth in the world, if we lost our ability to see the wonders of life.


However, that is beyond my comprehension. I would like to discuss the economic consequences.


If a nuclear war were to happen in North Korea. The war will be short, maybe a week and if the US really need to attack, they will attack first the military, communication, and air-base in North Korea. This would basically make North Korea paralyzed. There, will not be an "all-out" war with North Korea.

North Korea would retaliate by sacrificing South Korea, Japan and maybe Guam. A caveat here, Malaysia is within firing-range of North Korea missile and we have no defense to counter such offensives. So, pray that the inevitable does not happen, as North Korea is known to do a surprise attack on the unprepared.

A silver-lightning is that North Korea has only around 15 nuclear ICBM and he will definitely attack South Korea, Japan, and the Pacific. The most that North Korea will send here is only a normal ICBM. So, we should be more afraid of nuclear fallout and need to prepare our "hide-out"

So, back to investment. The stock market might drop 50 points consecutively for 5 days. Bring it down to its knees at 1500. This is an opportunity for us to buy undervalued stock. Always remember our duty in stock-market is only to convert "graphite to diamonds." It's, okay to lose, but convert your high alpha stock to those battered beta stock.  Therefore, my sincere advice is to reduce "margin or contra" by 25 percent or if your stock is too low to be sold, buy a lot of "HSI put" that expire in 2018 as insurance. So, you can cushion the down-fall.


After a week, the stock will go up, but prepare for the "after-shock." This is my observation, based on the Iraq war. It will not be a protracted war. I might be right or wrong.  Unless Russia and China decided to join the frenzy and attack American.

That will need "parallel economies" to deal with...but basically, it will still be safe to have the basic necessity of life prepared - ground, grab, gasoline, gun, and gold.


Sir Winston Churchill, sum it best "The more we delve to the past, the more we can predict the future!"     


After that, a new set of economics will prevail in the Pacific and the world over.


"Faith favored those who are prepared"

Good Luck! Amigo!

Yours sincerely,

Dr. Lion.

Surviving the "Everything Collapse" Environment.

If "Everything bubble" were to collapse eventually. What will we do?


Everything bubble:

1) Derivatives market - 500 Trillion.

2) Sovereign debt crisis - 200 Trillion.

3) Housing market - more than 100 Trillion.

4) Stock market - more than 100 Trillion.

5) Credit Card bubble - more than 100 Trillion

6) Automobile bubble - more than 100 Trillion.

7)Cryptocurrency bubble - more than 1 Trillion


Caveat: "We have run out of people to borrow! and the only way out is to print our currency to oblivion."


If this were to happen and it will happen eventually, everyone will have a very hard time, making 1929 or 2008 - pale in comparison.

But, is there a way to build a "Financial Ark" and prepare us for the "Perfect Storm."

Yes, there is hope - "Faith favored those who are prepared."



Basically, I will go to the same basic "Something of Everything" and "the leanest will survive best!"


So, what is the something?

Robert Kiyosaki - sum it best "Ground, Grab, Gasoline, Gun and Gold." Which in other words the necessity to survive in an eventual crisis.

 
Its the same with investment. Invest in all these categories.

 1) Physical - Gold and silver (mobile and valuable)

2) Institutional - Stock of property and preferably "up-stream" food company which is plantation (a food commodity). Peter Lynch, sum it best "Put your money, where your food is"

3) Cash - Preferably cash in local and foreign denominations, in case of emergency.

4) A hide-out - look-out for your favorite "hide-out" and prepare all the necessary.

5) Pray - You really need to pray for being alive.

6) Attitude - Think and act rationally.


Good Luck! Amigo!


Yours Sincerely,

Dr. Lion.
 

"Paranoid Investor" is the best investor strategy ever existed.

What is paranoid?


Paranoid means you are afraid of everything.


You are afraid of dying, losing out to competitor...etc.


Tom Peter, sum it best in his book..."In Search of Excellent." - "Only the Paranoid Survive." Do look upon the book, a classical book on management and marketing.


This philosophy is used by the greatest thinker of our time - Jack Welch, to bring General Electric founded by "Thomas Alva Edison" to a greater height, imagine GE as a mammoth "sun-setting" enterprise, still being able to chuck up, more than 10 percent growth a year under him.


In fact, Warren Buffet, the greatest investor ever alive, used such a philosophy. He has his rule of investment.

Buffet success rule:

Rule 1: Never lose money

Rule 2: If u disagree with me, refer again rule number 1.



Yup, I am a paranoid investor. So, I will have my rules for investing.

Investing means trading. So, I will have my buying and selling rules.



My buying rules or more accurately my buying indicator would be as follow. I need a lot of margin of safety.


So, my Buying Indicator is:


A) Fundamental:

1) I need a profitable company (the more the better) - preferably on the uptrend. "Dead meat attract no flies."

2) I need a debt-free company or preferably debt is less than 50 percent of assets.

3) A high dividend company - dividend preferably more than 3 percent.

4) No or negligible receivable, creditor or goodwill - Neither a borrower or lender.

5) A company with PE (Price Earning ratio) less than 5 or maximum of 10.

6) A company with P/BV (Price to Book Value ratio) less than 0.5.    


B) Technical:

1) The stock needs to have increased in market strength (increase in price)  and breath (increase in volume)

2) Just breakout from the base-line or long-term resistant.


Comments:

1) If there is such stock, buy at all means and wait.

2) Cos, short term, the stock market is a voting machine. Long Term, the stock market is a weighing machine - Warren Buffet.

3) Its the sitting that makes the money - Jesse Livermore.


So, my Selling Indicator is:

1) My reason of buying is not there.

2) Going for better investment.


Always go for "big movements" and not "small movements." As "small changes in trend" is too difficult to decipher.


Do, you know that the derivatives market is now so big - "500 trillions." If u really, really need to gamble. Go, gamble there. 4 American biggest bank, gamble 25 percent of their assets there. If, you can profit by just 1 percent of the derivatives market, it will make u trillion and probably, the richest man on earth.


In conclusion "Its the end that makes the means"


Good Luck! Amigo!


Yours Sincerely,

Dr Lion.

Ultimate Investment: Dollar for Penny.

Everyone looks for the ultimate investment concepts.

The best investment concept is to buy "dollar for the price of a penny."

If this is your investment philosophy, you will never lose.

Why? This is because you have a big margin of safety.

Say, if you buy a new Proton Saga for 1K. Dollar for penny right? You will never lose, cause you can always sell above 5K. This show how true is the concept of "dollar for a penny" and the adherence "margin of safety" that comes with it.

So, everything that you do, any business, always go for "dollar for a penny" and sooner enough you will be rewarded, handsomely.

A lot of people say that "diamond is girl best friend" but, to be honest, "security" is what a woman and her parents look in her future husband - be it money, caring, patience and wits."

That's how Graham come out with the concept of "margin of safety" in his famous book "The Intelligent Investor."

Good Luck! Amigo!

Yours sincerely,

Dr. Lion.

How to Get Income? - Study, Get a Good Job and Get Paid.

Since time immemorial, We need income to survive, improve our well-being and as a storage of value.


Income is divided into 3:

1) Active Income - Income that you work hard for eg. being an employee

2) Passive Income - Income that comes from the leasing of an asset that you have eg. Money, Stocks, Machinery and Real Estates.

3) Royalty Income - Income that comes from producing a masterpiece that others want eg. songs, books, arts and infomercials.


The 3 above income is akin to planting paddy, planting strawberry and planting teas.

1) Paddy needs to be planted every season. That is active income.

2) Strawberry need to be planted every time the source dies. That is passive income.

3) While, teas only need tender care and pruning from generation to generation and bare in mind, since time immemorial "Tea worth more than Gold." That is royalty, income


So, plan wisely: "If we failed to plan, we planned to fail."


God Bless Us.


"Lord, Let your' will be done."


Good Luck! Amigo!


Yours sincerely,

Dr. Lion

The Economic Basis of "Good Assets"

Economics Theory is based on "Wealth of Nation" written by Adam Smith.

Adam Smith stated that "A thing is worth how much a buyer willing to pay."

Put it in laymen terms "The Price of a thing depends on the demand or more accurate the demand relative to supply."

So, "Good Assets is something with high demand and low or diminishing supply."

Therefore, we have it - "Ground, Grab and Gold."


A) The ground represents the house, land, and estates.


B) Grab represents food - "Anyone that control food, control the world."


C) Gold represents valuable.


However, it is very difficult to define valuable. If the valuable asset, is the only one available on earth, theoretically the value of the value is infinity.

So, we want valuable that is diminishing in supply and demand continue to increase: -

1) Gold, palladium, platinum, and silver.

A sure winner for the future.


 2) Precious stone

Second, valuable that will be diminishing in supply but have sentimental value due to its beauty, elegant as well as fashion.


3) Antiques.

While antique is value for its rarity and pristine condition at such old age. People would call it Vintage, Gothic or even National Treasure.


4) Arts

Arts are subjective in manner. As art is based on "the beauty and uniqueness of the eye of the beholder."


5) Ancient folk arts and amulets

This is similar to the ancients arts of the past generation.


Based on antiques and arts, the lifestyle, culture, and belief of a lost generation would show itself up for us to appreciate.

In the future, collectible' valuable' will appreciate a lot at the price. This is because most of the artefact would be lost, in time memorial and more people will be more appreciative of "Fine Arts" in the future. Hence, the existence of a museum of fine arts.

Like what owners of Patek Phillipe's watch always joke "Nobody owns a Patek Phillipe, we are the mere keeper of the next generation."

By the way, have you seen any antiques suffer a drop in price? Never. It only goes higher and higher and being sold only when someone is in need of money or fail to appreciate the value of it.   

Everyone must realize that our past is our teacher, that guide us, to a better tomorrow.

Winston Churchill sum it best "the more we delve into the past, the more we can see the future."

Good Luck! Amigo!

Sincerely,

Dr Lion. 

Rich Man's Dilemma in Economics: New Equilibrium during Disaster.

In Economic, some of the most important components are Aggregate Demand (AD) and Aggregate Supply (AS).


Why?



It determines the equilibrium point under normal conditions or "ceteris paribus."



Say, if an economic or a humanitarian disaster were to occur, this would definitely change the status quo of "ceteris paribus" and special sets of economic rules sets in such as parallel economies.

Say, you are a rich man with USD 100 million. But, suddenly an economic disaster occurs. Will u still be worth 100 million? Most probably no.


This is because your buying power will deteriorate as aggregate supply (AS) will be reduced drastically as well as there is no demand for USD and you need to pay up the price which is most of the time higher than the loss of volume of supply on normal curve of AS (due to hoarding nature of supplier) and reduction in demand on normal curve of aggregate demand (AD) as "AD have an inverse relationship between price and quantity demanded".

That's how currency or fiat money comes into oblivion in a crisis.


This causes your buying power to diminished rapidly leading to the acronym "selling a dollar for pennies." If you are definitely in need of resources in a crisis - Ground, Grab, Gas, Guns, and Gold.

So, make sure you are well diversified in all the five asset class stated above during a crisis and profit from it.


Avoid, from having to "sell dollars for pennies" and instead profit from it, in an eventual disaster.


As the saying goes "Anyone with excess is always an investor - whether he or she realized and make good use of it"


"Faith favors those who are prepared."

Good Luck! Amigo!

Yours sincerely,

Dr. Lion.

Theory of Reflexivity

Do you know that whatever small things that we do, somehow or another we can change the world?

Here are 2 examples:

1) Alexander Flemings's discovery of Penicillin after WW1  saved millions of life in WW2.

2) The flipping of the wings of a butterfly can cause a tornado. (Any weatherman are aware of such strange phenomena)


Therefore, whatever we do will be reflected in the community, that we lived and the earth, somehow or another.


"That's the basis of Theory of Reflexivity."

The theory said that "The results of the equation change when new variables were added to the equations"


That's why we must be receptive to new pieces of information, new changes and adapt as well as transform to be ahead of the pack and always try to be the "trend-setter" and not the "trend-follower"


The following scenarios show how important "response time" is for us to transforms and adopt.

1) Seconds: Decisions during a fire in a building.

2) Minutes: A stock transaction or treating patients during an emergency.

3) Hour: Business Evaluation for tenders.

4) Day: A new business opportunity or affiliates.

5) Month: Changing business or consumer trend.

6) Year: Decision on our personal health and wealth.


"The only constant is Change"

Good Luck! Amigo!

Sincerely,

Dr. Lion      

Stages of Learning a New Skill

Human need to be taught by learning or experience to be competent in a certain subject matter.

Learning take shape through these 4 stages:

1) Dunno what we dunno - we really at odd with something that is totally new.

2) Know what we dunno - know that we are ignorant and needs help

3) Know what we know - we are becoming competent and stored in our short term memory

4) Dunno what we know - we are becoming expert and can identify that something is wrong by a certain pattern that repeats itself, we develop a hunch or gut feeling from our stored long term memory.

"That's why an experienced businessman always have the hunch that something is wrong and walk out from the deal before something turn nasty and will "go for the jugular" if he know that his "killer instinct" in a deal is right."

Good Luck Amigo!

Sincerely,
Dr Lion

The Next Era of Human Revolution

Revolution means something that changes mankind - thinking, concepts and lifestyles forever.

Archimedes always joke "If he had enough leverage, he can move the world."
True, from the sense of invention that changes the world forever.

1) Human starts with stone age - tool revolution.

2) Metal Revolution - metal tool.

3) Renaissance age - artistic and radical thinking as well as philosophy.

4) Agricultural age - food for the masses, with surplus bought to the marketplace for a profit.

5)Industrial revolution - creating mechanical devices at a cheaper cost with the concept of  "division of labor"

6)Electrical revolution - Light bulbs allowing us to work till twilight.

7)Automobile revolution - mobility improve

8)Airplane revolution - anyone can fly

9)Computer revolution - a machine that can store information

10)Internet revolution - communication faster and cheaper

11)Robotic revolution - cheaper and more efficient way of doing a task

12)Artificial Intelligent revolution - robots that are able to think and decide without emotion attached

13)Human capital revolution - Knowledge-Based Economy.

14)More revolution to come - space revolution, deep sea revolution, quantum physics revolution?


"A lot of People have profited and fortune was made from the first 9 revolutions. Are we ready for the future revolution - embrace the internet, robotics, A.I. and human capital revolution?................ for the betterment of yourself, family, society and finally mankind."

Good Luck Amigo

Sincerely,
Dr Lion 

Competition between Wealth, Skill and Knowledge for the "Supreme Title of Everlasting Success."

In the time before time, lived three different kings with utmost wealth, skill and knowledge.

We will call them Mr. Wealth, Mr. Skill and Mr. Knowledge.

All three of them would like to fight for the title of Mr. Everlasting Success.

So, they decided to hold a competition to see who is most successful in their generation, their future generation and their descendants at the end of time.

In the first generation, Mr. Wealth will be the most successful, because he controls all the wealth. He had all the resources and all those with skill and knowledge works for him.

In the second generation, the transference of wealth occurs from Mr. Wealth's family to those with skill, but, less to those with knowledge. So, the skillful craftsman rules and compiled their wealth and become an advisor to Mr. Wealth. While those in knowledge also gained but to a limited extent.

At the end of time, its a time of war and turbulence. Money get you nowhere. So, Mr. Wealth money was transferred to Mr. Skill's and Mr. Knowledge's family and the rest stored in a safe vault. Mr. Skill's children, on the other hand, developed great skills but their ability is limited to the skill that they have been taught and trained with (like father like son). However, Mr. Knowledge's children, on the other hand, thrive very very wealth cos they are prepared to adapt, to change and be prepared at the first sign of trouble.

Therefore, you see we need money to make money. But, eventually, is those with the knowledge that is able to adapt to the wave of change. Change is inevitable in this new border-less world - be it business, occupation, learning or even consumerism - embrace it with brave, dignity, confident and most importantly have faith in our mighty creator.

 "Which one you choose to the citadel of wealth - Wealth? Skill? Knowledge?"

Be My guest.

Good Luck! Amigo!

Sincerely,
Dr. Lion

The Allure of a Million Dollar - The Baby Steps to Investments

Say, I tell you I have a very great investment to invest - Mining Uranium in Antartica!

If I were to ask you for a million dollar. You will say are you mad? Where do I have such amount of money?

If I were to ask you for a hundred thousand, you will be more receptive, but,  you will still say that will be too much of an asking.

If I were to ask you for ten thousand, then, you are ready to listen. You will ask me what's the deal?

If I were to ask you for a thousand. You will say u feel right to invest, with this amount of money and don't mind losing it all.


We always lose, why?

We always like to go for the Giants' steps to investments and not slow and steady.

We should always go for the baby steps instead,  a few drops at a time make the mighty ocean.

Lets me prove it to you mathematically how 1 million is possible mathematically.

Say, your final objective or destination is to profit with a million.

You have a few options as follows:

1) Get a 1 million dollar profit deal.

2) Get a 10 times a hundred thousand dollars profit deals

3) Get 100 times a ten thousand dollars profit deals

4) Get 1000 times a thousand dollars profit deals

5) Get 10000 times a hundred dollars profit deals

6) Get 100000 times a ten dollars profit deals

7) Get 1000000 times a one dollar profit deals

Choose the million dollars deal that suits you or maybe the next one dollar profit that will bring you the next million.

"So, don't look down upon the next penny that is lying on the floor, it can be the next billion in the making" - Warren Buffet.

Hope this helps you in your citadel of wealth!

Good luck! Amigo!

Sincerely,
Dr. Lion