How to survive the apocalypse of everything collapse.

 Say one day a person saw a black cat and he decided to sell all his stock because he associate black cat as a bad omen.

His selling result in a stampede in the stock market leading to more selling, margin call, limit down and suspension of the stock. 

This is theory of reflexity by George Soros. 

If malaysian stock collapse the winner will be those who are flush in ringgit or what we say cash is king. 

If say, a financial crisis happen in malaysia and people start running for safe heaven and start leaving malaysia in trove. The winner will be foreign currency.

If the world were to enter a financial crisis, be in subprime mortgage or covid. The next safe heaven is US dollar. US dollar is known as the american gold or the ultimate safe heaven. 

If US dollar collapse then the financial world will enter dark ages, whereby only commodity, gold and crypto survived as they are people's food, God's money and people's money respectively. 

However, when money or more exact USD is no more in existence there will not be buyer for your food, gold or crypto as people will not accept a demoted US dollar as a medium of exchange.

But, people still need to eat, stay and continue with their daily life. So, they will resort to barter trade. In barter trade, we need a coincidence of wants. 

If there is no coincidence of wants, we need a medium of exchange. During this trying time when the USD collapse the best medium of exchange would be gold, silver and crypto. 

Gold and silver had stood the test of time since the eqyptian as a medium of exchange. So no doubt, it will still be relevant during the everything collapse environment. 

Crypto on the other hand is the new revolution in cash technology as a medium of payment. Which can hopefully withstand the test of time. However, crypto is not tangible as it will be lost if the world wide web or Internet when down or not functioning making crypto a high risk investment during this trying time.

During this time of financial tribulation, investment such as automobile, mansion, antique, watches, precious gems and everything that glitters will not be gold and will enter as rubbish grade investment. In WW2, everyone is only interested in survival which is food and shelter, making demand for luxury goods non existence all together. 

Therefore, during this trying time the best investment is a safe place to stay, food supply and precious metal such as gold and silver. We must thank God for the good days and also the bad days as we know God creat one and another.

The best advice is to depend on God's grace and mercy. God's mercy on our wrongdoing and sin as we repent and God's grace on our lifes during financial tribulation. 

Moral of the story: It is better to be 20 years earlier than one day late when everything collapse occurs.

May God's Mercy be with you now and forever.

Be Bless, 

Dr. Lion. 

Ugly effect of inflation on our purchasing power

 Inflation is the monster in the bag in our daily lives.

Based on such premise, inflation in Malaysia will double every 10 to 12 years. 

Say, we will to live for another 48 years that is around the year 2070. How much inflation would be and how much we would need to survive on a minimum income?

The more we delve into the past, the more we can see the future as expounded by Sir Winston Churchill.

Let us go back to 1990. In the year 1990 the price of a bowl of mee is 2 ringgit. Now in 2023 it is around 8 ringgit. So, for the span of 30 years the price of food increased by 4x.

Based on such premise, inflation multiply by 2x every 12 to 15 years with ceteris paribus whereby everything else remain constant. 

So, back to our projection from 2023 to 2070. That would be 48 years or 4 cycle of 12 years each. This means inflation is going to multiply by 16x.

So, the price of a bowl of mee which is 8 ringgit multiply by 16 would be 128 ringgit. Someone who need to survive on 2k ringgit per month, will be in need of 32k per month to survive in 2070.

However, this calculation is flaw and will not predict accurately as price of some of the goods and service we consume in life will not be elastic to inflation such as telephone bills, bank loans, house rental and medical bills and insurance . Therefore, we are partially safe from the ills of inflation due to time factors. 

Back to such scenario, it would be wise and prudence to divide the price of food and monthly expenses into half for 2070. Therefore we would need 16k ringgit per month to survive and a bowl of mee would cost us 64 ringgit per bowl. 

Making cash the worst investment. Therefore, it is advisable to invest more in asset class that fall under the acronym Grab, Ground, Gasoline, Gold, Gourd and Gun. 

But one thing for sure, inflation will show her ugly face and eat our saving if we cannot multiply our asset by 6 percent per year on average.

Why is this so? This is because if it take 12 years to double on inflation, this means, inflation would grow at a rate of 6 percent per year making investment that earn less than 6 percent per year negative return if inflation is taken into account.

That's why the best is to leave our future in the hand of God and build treasure in heaven where moth cannot destroy and thieves cannot steal, whereby where our heart is there is also our future. 

Charlie Munger, said that if we know where we are going to die and we stop going there, we will definitely going to be safe. 

Moral of the story: Fear God the begining of wisdom and Fate favor those who are prepared. 

In God we trust, 

God bless you, 

Dr. Lion. 

The Generational End Game of different asset class.

 "A thing is worth how much a buyer willing to pay"

Based on the above statement coin by Adam Smith, we can see the stimulation effect of different economic cycle and the effect of the generational endgame of different asset class.

Asset class are something that people see of monetary value. 

The asset class can be cowry shell, cows, tulip, salt, silver coin or paper money  depending on the hype and demand for them by the people living during a particular era.

Currently the asset class that i will discuss about will be mainly stock, gold and precious metal, crypto, property and REITS, antique, arts as well as cash. 

Stock will be a certificate that we partly own a company. Stock will have buyer and seller but they will be subjected to extreme price due to bipolar nature of stock participants which is bullish due to greed and bearish due to fear. We should be greedy when others were fearful and fearful when others will greedy. 

Recession: Stock will drop extensively. 

Inflation: Stock that have good asset backing will go up extensively.

Hyperinflation: Inflation proof stock such as Grab, Ground, Gasoline, Gold, Gourd and Gun will do extensively well.

End game: Every eighty years there will be a superbear and superbull due to the primary cycle or debt cycle. There will be bearish for one to two years or bullish every two to four years due to secondary cycle. The tertiary or yearly cycle will make the stock on uptrend or downtrend. No matter how good or how bad we are at stock picking we will be wiped off during the superbear cycle like the great depression in 1920s, asian financial crisis in 1998s, dotcom bubble in 2000s, subprime crisis in 2010s, Covid pandemic in 2020s. Stock can drop from few hundred to few dollar in 2000s dotcom bubble and 2010s subprime crisis whereby AIG and Citibank drop till 1 dollar. During Covid pandemic in 2020s stock drop from few dollars to few cents or go bankrupt all together like JC Penny stock. In conclusion, stock is gambling due to extreme greed and fear of participants and cash is king. If we are trapped in the great superbear stampede our result is that we will lose all our saving and worse of all become insolvent, emotional stress and suicidal whereby many people commit suicide during the great depression in 1920s and asian financial crisis in 1998. The only way to overcome this problem is by buying only good investment grade stock and not buying stock hype at the moment as all that glitters is not gold, diversify across the board and diversify across asset class. Just remember price is what we pay and value is what we get. 

Gold and precious matter on the other hand will always remain the status quo during inflation which means gold is good as a storage of value but not a good medium of speculation. If interest rates drop demand of gold would increase and vice versa. 

Recession: Price of Gold will drop due to lower demand. 

Inflation: Price of Gold will go up with inflation due to the nature as a storage of value. 

Hyperinflation: Price of Gold will remain their purchasing power even when paper currency is useless.

End game: Gold had been able to withstand the test of time, but we cannot fill our stomach with gold during war, pestilence or famine. Price of Gold drop during covid pandemic and rose dramatically due to quantitative easing.

Crypto is akin to nasdaq or technology stock but crypto have higher risk to reward ratio that is ten time more volatile than stock. 

Crypto can drop from hundred dollar to less than 0.000001 sen for each crypto like what happen to an infamous crypto term luna. Making billionaire become pauper with less than a thousand dollar in the span of few days. 

End game: Crypto is more like russian roulette if stock is more like gambling on the roulette wheel. In russian roulette either you win the spoilt or you kill yourself in the process. Many people commit suicide due to loss in luna. 

Property on the othet hand have a good storage value buy will depends on the personal disposable income of the citizen. If the PDI is high there will be high demand for property and property price will rise. If the PDI drop there will not be demand for property and price will drop.

REITS are the same as property but is easily tradeable without the need to sell as a piecemeal, high administrative fees, banking loans and repair as REITS is manage by professional with yearly income of 85 percent distributed as dividend. 

Recession: PDI drop and people will have problem servicing their loan. Property price will drop extensively due to low demand as there will be more motivated seller than buyer. 

Inflation: Property will go up depending on location and buyer ability to get bank loan with a ceiling price due to PDI. 

Hyperinflation: Property price will hyperinflate extensively. However, there will be price but no buyer as there is not much motivated buyer with PDI to buy from you at hyperinflated price unless your property is at prime location that foreigners with foreign currency would be happy to invest in.

Antiques and arts stand by itself as many people like to reminiscent of the past. The value of antique will increase overtime as there is more awareness and demand but supply reduce extensively. 

Here, a thing is worth how much a buyer willing to pay and when there is a motivated buyer the price will be higher and the price will be lower when there is motivated seller. 

So, price fluctuate alot on the short horizon of every boom and bust cycle depends on the general economy. However, if we take the long term horizon of more than 5 years the price will be usually on the upcycle. Price will usually go up by then as new generation and new player enter the market. Therefore, arts and antique is a patience game and only suitable for those with deep pockets as it will go up extensively when there is massive increase in PDI during good times and vice versa. 

Recession: Price will drop extensively as demand dried up and there will be mostly motivated seller during this time.

Inflation: Price will up depend on the rarity of the items and availability of PDI. There will be more newcomer becoming motivated buyer as they will be buying the items as collection. 

Hyperinflation: During this time, arts will be hyperinflated as well but there will be difficulty to find buyer as there will be price but no demand. If you live in a hyperinflated country it is better to sell your items in a neighbouring country that can better appreciate the price of your art or collectible antique.

Endgame: If you are in need of cash, this is not an asset class to keep as it is very difficult to find buyer and during bad times buyer will press you for a very low price, you might need to sell at a loss.

Lastly, we will talk bout cash. Cash is the heart of every transaction that we use for pricing. Without cash all that we can do is barter trade. 

Recession: Cash will be in high demand and cash is king. 

Inflation: Cash will be in demand but the purchasing power will drop, making more money required to buy the same item of desire. 

Hyperinflation: Cash will be useless as a medium of exchange and this makes lives difficult for the citizen of the country such as what happen to Wilmar Republic, Hungary, Federated United States and recently Zimbabwe and Venezuela. Honestly, there is and will not be any currency that survived more than two hundred years in the history of mankind. In a hyperinflated country, the citizen will spend the money as fast as they obtained it as price will increased more than 50 percent every other months.

Endgame: There is no currency that survive more than 200 years in the history of mankind as currency will soon be printed to oblivion. 

Moral of the story: Diversify your asset class and remember to build your asset in heaven where moth cannot destroy and thieves cannot steal. 

Bon Voyage, 

Dr. Lion. 

Survival mentality in the dark days to come.

 If we look into the past, it is more about regret.

If we look into the future, it is more about fear of the unknown. 

So, how we overcome fear of the unknown?

We overcome fear of the unknown by quantifying the fear. 

Say, we are fearful of our future. What we can do?

First, if the thing is left to chance, we assume the worse case scenario. 

If the thing is left to decision, we assume that we will make the best decision. 

Based on these two premise, our decision and emotional make up during a disaster will eventually make us or break us.

How do we make the best decision?

It is by having wisdom to quantify the risk and to be fearful of God and surrender to God.

Wise man eye is in the head and if God is for you, nobody can be against you.

So, we will quantify the risks that can happen to us and our nation in the future.

There are a few bad  disaster that can happen to the world in the declining order:

1.apocalypse

2. Nuclear war and nuclear winter

3.Regional war

4. Natural disaster like earthquake, flood, meteorite attack

5.Pestilence

6.Famine

7. Anarchy

8. Hyperinflation 

9. Depression. 

10. Inflation. 

All this might or might not happen to us and our country in the future, but the probability of these things happening will be more higher with the end times with the adverse effect from such disaster reduce in declining order.

After we have, quantified risk. We must have a plan to survive if such disaster were to strike. 

For apocalypse, there is not much we can do except to surrender our life to God. 

In a nuclear attack, if we survive the nuclear winter, we need to look for basic necessity and barter trade.

In a regional war, we need to migrate to other peaceful nation and to rebuild our life there.

In a natural disaster, if we survive, we need to rebuild our life and savage what is left.

In pestilence, we need to take preventive measures and seek medical care where appropriate.

In famine, we need to find place to plant and harvest our own crops or migrate to other better place.

In anarchy, we need to defend ourself with weapons and seek protection from local authority. 

In hyperinflation, we need to work or export goods to neighbouring country that have stable currency. During Good days we can prepare for hyperinflation by investing in God's money which is Gold or silver as well as People's money which is crypto. 

If recession strike, we need to reduce our consumption or best is to live one or two strata of cheaper lifestyle. 

In inflation, we spend only on the necessity, save in Gold or silver  or crypto for a raining days and if possible plant our own foods. 

Most important of all, we need God to shine his face on our life. 

If God is for us nobody can be against us. 

Moral of the story: It is better to be 20 years early than a day late. 

God's Mercy Endures Forever, 

Dr. Lion. 

The more we delve into the past, the more we can see the future.

 In the current technological advance civilization, the more we delve into the past, the more we can see the future.

Based on such premise, the modern world is facinated about the new technology for instance there is a craze about the newest iPhone that we can set our eyes on.

However, technology will reach a level whereby there will not be much difference between the previous and latest model, whereby, handphone that is smaller than our palm will not be technologically feasible. Maybe a phone watch or hologram phone will be more feadible with satelite communication present in the film terminator. 

Back to commerce, paper currency make it easier for us to fulfil all our needs and wants.

However, digital currency will take over paper currency with the might of google pay, samsung pay, apple pay or touch and go.

With the demise of the paper currency and adoptation of digital currency, civilization will change forever.

One group of people, will then adopt crypto sooner or later as no more will our money be in control of central bank or the government. This will happen to the masses. 

Another group of people will be reminiscent of the past and collect paper currency as an art. The rich and mighty are advent art collector because art is rare and price increase from time to time.

There will be a time, whereby central bank will stop producing paper currency all together and we will be force to digitalise our currency. When that time occur paper currency will be an art and their price rise tremendously. 

Take for example raleigh bicycle or motorcycle with pedals in the 1940s, when they become obsolete the price rise tremendously. An antique pedal bike can worth 50k in today's money. Same with antique radio, iron and gramma phone.

Therefore, the more we delve into the past the more we can predict the future. 

Bless is those who can predict the future accurately and win. 

Bless 2023,

Dr. Lion

A thing is worth how much a buyer willing to pay.

 Adam Smith coin the adage, "A thing is worth how much a buyer willing to pay."

Based on the premise, lets us see all the asset class that we posses and the valuation of those asset. 

Say, we are an investor. Our nominator is stock and our denominator is ringgit. If stock drop, ringgit will go up. 

If ringgit go down, foreign currency, gold, silver and crypto respectively will go up.

If foreign currency will go down, US dollar will go up.

If US dollar go up, then recession will set in and Quantitative Easing will happen when there is recession. 

With Quantitative Easing, US dollar and interest rates will drop, this will spur the growth cycle and more commerce and trading activity will be in demand. 

With demand, people will be richer and they buy more goods, more stock and inflationary goods such as Gold, Silver, house, automobile and antique will be more in demand. 

Then the cycle of stock-ringgit-foreign currency-USD-inflationary goods will repeat itself. 

Moral of the story: Those who can predict the trend of the market win. 

The more we delve into the past the more we can see the future.

Bless 2023,

Dr. Lion

The determination of Price and Golden Price in economics.

 What determine the price of goods such as shares, gold, crypto, property, arts, and food and what is the golden price? 

Price can be affected by:

1. Intrinsic factor, Pi

2. Rarity due to aging, Pa

3. Seasonal, Ps

4. Random, Pr.

5. Discount, Pd. 

6.Confident index, Pc

Seller Price = Pi + Pa +Ps +Pr + Pc - Pd. 

The price of a stock depends on the intrinsic value of a stock, seasonal depending on the trend, random event such as war or act of god, confidence in the economy and the discount the seller willing to give. However stock is not affected by year of aging unless it is a derivative or no more of a going concern. 

Gold on the other hand is depending on intrinsic factor, seasonal trend, random event such as war or act of god, confidence in the economy and discount based on fluidity.  Ages does not much affected the price of gold as gold is a generic product in nature. Unless it is a limited item that will increase over time. 

While, crypto depend on the intrinsic factor or application, seasonal trend, random event such as war or act of god, confident index and discount based on number in circulation or rarity. As crypto is generic in nature, as one type of crypto is the same as the other, due to adherence digital in nature and hence not affected by aging.

Next, property depend on intrinsic value which is location, seasonal trend, random event such as war or act of god, confident in the economy and discounted based on the availability of credit or motivated seller. Property will rise with time as properties are scarcity in nature. 

On the other hand, arts have intrinsic value depending on artist or creator as well as rarity, aging due to years, seasonal trend, random event such as awareness on the art or confident in the economy such as act of god as well as availability of credit and discounted based on motivated seller.

Food will have intrinsic value as it is a necessity to live on, seasonal trend such as festivals, random events such as war or act of god, confident in the economy as well as availability of credit as well as discounted to due to perishability over time.

Cars will have intrinsic value as transport and branding, random event such as war or act of god, confident in the economy and availability of credit and discounted based on condition and ageing parts over time. 

Golden price refer to a ceiling price, whereby, buyer is not willing to pay for the product at a higher ceiling price depending on affordability and availablity of credit. As a things is worth how much a buyer willing to pay. 

Stock can be hundred, Gold can be ten thousand, Crypto can be hundred thousand, arts can be millions, property can be ten of millions. Cars can be hundreds of thousands and food can be hundred.

Bless day ahead. 

Regards, 

Dr. Lion.