American vs. Japanese

Toyota's head faced congress hearing the past week. Two quotes were widely used to show his attitude as well as his company: The first is "My name is on every car and you get my personal committment to fix this". The second is "I take full responsibility".

Recalling that he only took the job less than 2 years and now he said he toke full responsibility. That sounds a little strange as we usually hear this: the previous administration left us XXX of deficit and unemployment. Now we are turning around. It takes time. See the tone? We can see clearly how different in government versus private business. So letting the government run business isn't a good idea.

More implication is the way Americans handle these situation differ to the way Japanese is using. Although media in the US still grill Toyota on their wrongdoings, Japanese think Americans put Toyota in hold water pure out of politics to save their big Three. The sudden accelaration problem now trace back to 1997 model. That is more than 10 years ago. Toyota owners should have noticed that since that. Why dig it out?

Andy Grove, Intel's previous CEO, was smart enough to recall Intel's CEO promotly after they found the problem. Besides a tech savvy, he knew that competitors would be somewhere out there waiting for him if he had not done that.

A good lesson.

Investment education

Many books, seminars, and websites claim providing investing services, tips, and strategies analysis. More and more, such information focuses on trading tactics (day-trading and technical analysis). No tactics is a forever and improved all the time. Thus, no worry about drain on the demand.

The audiences of such information may not be for common investors who have their own daily jobs. These regular investors, where regular means, in a sense, simply give money to others to manage their money, should still obtain investment education. Money managers and fund managers express investing phylosophies in readable words. For example, they like IBM because of their stability and earnings. That is good. But one more thing should not be ignored, investment longevity.

Investing needs focusing less on numbers, that is, on beating on index. Many regular investors are just too short-term and their patience duration is about 3 to 5 weeks. They are ultimate short-term thinkers. In investment world, short-term thinking is tremedous detriment to investment in many ways. It is easy to say than done in this regard. Fund managers are always under pressure to achieve from their clients. Educations are important not only to the clients but also to themself because one may swing if he is not a firm believer on his picks.

Bear's volatile plays

Last week, Greek's debt became a one-day blow from the bear. But the 3-digit wipe out didn't last long, in hours more precisely, then symbolically narrowed to 2-digita loss. This week, China's reserve hike became another play for the bear. Again, a 188 loss opening ended with 45 point lower than Thursday's close.

China's reserve position isn't a secret or surprise at all. This is the second time in 2010. The blog had expected China would do this anytime. And had suggested buy the dig whenever it occurs. In fact, the chinese market reacted positively to the news as it is good to know the bottom line of the Central bank.

It seems all these plays had become wonderful buy opportunities for the bulls. Indeed, good news keeps coming in, expected or unexpected depending where you stand, unemployment is dropping. Inventory is depleting so any expansion will trigger further production. Employment bill is on the way. Big city's house prices have stabilized. So it looks good.

The bear won't give up easily. Europe zone problem, employment bill criticism (whatelse except criticism?), china's reserve, rate increase (1% for probably 2010 and 2011). They *ARE* bad news, no doubt about that. But the key is that they *ARE* expected and indicated in prices already. The bear will seek any chance to rock the market, especially before November.

So the battle is not concluded yet. Be cautious in investment.

The function of Investing

On and off, there are fuzzy argument about the function of investing. How can investing contribute to life improvement except greedy people accumulating money? We know building cars can make life easier so that the makers deserve to prosperity. But investing is just buy and sell, what has been generated? Nothing! Even money is not generated because someone's gain is some others' loss.

This argument seems trivial in investors' mind as the goal of making something and selling it and making money can be simply shortened to buy something's stock and sell the stock and make money. No physical material is involved in the food chain. Isn't it better than building plant, hiring a number of employees, and managing them? We have to agree to it that capitalism is maximizing capacity. No surprise that investors are "greedy".

Is it really sound surfacially? Probably not. Investing is catalyst to physical manufacturing. Capital accumulation is a derived product. And many businesses in our daily life don't create metarialized products, for example, the sporting business, there is nothing built when you are watching players scoring on the field and nothing is really changing whether you miss one game or two. But the entertainment business is very important in our daily life. Likewise, investing or not doesn't gaurantee that the business to be invested is on the right track. But it acts as a check for all in the business to be aware of how they are doing. Good businesses are deserved to be financially sound. Good investing is deserved to be financially rewarding too.

Are investors greedy? Yes and no, because the goal of investing is accumulating capital. This is the no part. On the other hand, there are always permutations on normal business model. Players would out compete other by drugs. These criminal acts are certainly greedy. Same applied to investing world. Crossline investing is out of greedy.

Happy investing!