Blog My Brain

Here is a comparison of the amount of searches in google for “economic recession” and “economic recovery” with the stock market (QQQQ is the nasdaq index fund).   A peak in interest about economic recession along with a peak in interest about economic recovery calls for the March bottom in stock prices.  This makes sense in that the crash stops when lots of people is worrying about a recession and more people start to see recovery.

You can access the most updated comparison Here.

admin :: Sep.10.2009 :: Market Analysis, Finance/Investment :: No Comments »

Today I developed a new tool to identify potential investment opportunities.  The idea is to use Google Insights for Search to identify increasing popular awareness for a product.   Then I compare the trend of increasing searches with the stock price of the relevant company.

In the above picture, I compare the interest in “IPhone” vs Apple Inc.’s stock price in a five year basis.

The tool can be accessed here: http://www.blogmybrain.com/stock_apps/GI/

At the top of the page there is a 24 month comparison.  At the bottom of the page there is a 5-year search history.  All you have to do is click on the “5y” button in the stock chart to compare it to the 5-year search history.

admin :: Sep.09.2009 :: Investment Tools :: No Comments »

Flight Control is an extremely fun IPhone game.  The objective is to land the planes to the corresponding lanes.  Different type of planes fly at different speeds.  They also come out more frequently as time pass on.  The game terminates when two planes collide.

   

   

   

   

Here are some strategies that I found useful in playing the game:

   

   

1.  Since the entry points of the planes do not change, it is possible to design the fly path in a way that prevents unnecessary intersections:

   

   

   

   

The red planes should not go directly into the landing lane.  It is better to set them in parallel motion (see left side of the map) and direct them in to the lane one by one.

   

   

2.  When defining flight paths, it is more preferable to have two planes fly in the same direction.  The reason is that it gives you more time to react when the planes are close to collide.  If two planes are flying heads on,  the time for you to solve the crisis becomes very short.

   

   

3.  For the red planes, the bigger ones are faster then the smaller ones.  Therefore, you should always try to land the big ones first, and then you can trail the small planes right behind them.  If you do it in the opposite order, the big planes often catch up to the small ones before they land.

   

   

4.   If multiple planes of the same type are moving in the same direction, put them on the same path.  Because the same type of plane have the same speed, they will never collide if they are on the same path.   In addition, this leaves extra room for other planes to maneuver. See below:

   

   

   

   

5.  Do not fly the planes around the edge!   Even sometimes if you have to, put them back on the above track as soon as a crisis is resolved.  The reason is that if you fly the planes around the edge, it is very easy to be hit by a plane that just come out.

   

   

6.  In case of too many planes to handle, you can put some planes in rest by making circular paths.  Those planes would fly in small circles (instead of running into others) until you have time to attend to them.  See below:

   

   

   

   

Happy Gaming!!!

admin :: Sep.02.2009 :: Fun, Brain Teasers :: No Comments »

Recently there are a lot of debates between the Keynesian and Austrian economists on the skyrocketing government deficit.

My opinion is this:

In general, government spending is wasteful.  To expect governments to efficiently allocate capital is a larger mistake than to believe in Bernie Madoff.

Keynesian policies only makes sense if consistently followed.  The true Keynesian policy maker would save money during good times and spend money during bad times.  The intention of such policy is to smooth out the business cycles.  Unfortunately, our government hasn’t been saving money during good times, therefore to spend now requires the nation to elevate its debt level.  And high government debt would easily lead to money printing & hyper-inflation.  The solution to too much debt is not be accumulating more debt.  If there is no saving, there should be no spending, especially when the spender has a tendency to be very wasteful.  In the U.S. case I would side with the Austrians.

The Chinese government, on the other hand, is also spending a lot of money to stimulate the economy.  Fortunately for the Chinese, they were saving a lot of money during their economic boom.  And now in a global recession, they can snatch up assets and resources for cheap.  This investment mentality is what drives the “easy-money” policy in China right now.   Therefore, in China’s case I would side with the Keynesians.

admin :: Aug.20.2009 :: Market Analysis, The World, Business/Management, Finance/Investment :: 2 Comments »

The recent stock market rally signals a decoupling between the stock market and the economy.   The economy, given its current state, would have a L-shaped recovery at best.   As the consumers facing terrible job market, and high debt levels for households and government remains if not worsen, the economy powered by consumption is not likely to have a robust recovery.

On the other hand, aggressive cost cutting has fueled a recovery in corporate profit. However, sales trend still remains weak.  With the decline of the dollar, I expect U.S. exports to recover as foreign countries start buying up electronics, IT and capital-goods.   Foreign consumption would be the fuel for sales recovery for American companies.   Therefore, companies that sells to foreign markets would see a healthy recovery while others would continue to face a tough market.  The sales boost from foreign consumption would further increase profitability, and cause positive earning surprises which drives up market.

Another source of divergence between stock market and the real economy is inflation scare.  With the government printing so much money, and skyrocketing budget and trade deficit over the years, it is hard to be bullish in the currency.  The prospect of currency devaluation is enough to drive a lot of investors out of bonds and cash and into equity markets.

Therefore, while the real economy is struggling, the stock market might perform surprisingly well.

admin :: Aug.17.2009 :: The World, Business/Management, Finance/Investment :: No Comments »