TLC Weekly Update September 25, 2020

image

Roller coaster ride in the stock market continues. Nasdaq 100 rallied 5% higher from Monday low and then fell back down to Monday low right after. Such high volatility can induce even higher volatility going into election month. Investors and speculators should be more careful in coming few weeks. Powell may have very limited power in popping up the market should some kind of panic kicks in …

Learned something new here on how ants decide when and where to build bridges. Sometimes things are far more simple then we choose to believe in. One good example is the microstructure of the stock market. People cannot help themselves to make things so complicated when they look at the price movements that ultimately leading them to make bad trading decisions.

Sometimes brand building can be very bizarre because human nature is – crashing two trains to make a train company famous. As suggested by one of my staff, that I should record my trading computer 7/24 so that they can produce ASMR videos for those trading addicts on YouTube. Been thinking about it and may give it a try.

In case you do not know what ASMR videos are, you can search for “What is ASMR” on youtube to knock yourself out.

With all these riots and emotional “heated debates” among people with different viewpoints of things happening around us, maybe it is time to remember that Socrates hates democracy. My point is, you don’t need to have an opinion on things you don’t know. You don’t need to make a call on what is happening around you as if you are an expert of the subject. Listening too much to the news, which are by design to focus on extreme events to get your attention, is bad for your health.

Lately I’ve heard a lot of talks of the inevitability of the financial system breaking down. For example, Ray Dalio publicizes the idea that eventually the Fed will hit a wall with what they are doing. And some people are already thinking about bartering if “shit hits the fan”. Bartering has been around ever since human existed. Only after cash being accepted as the default form of medium for transactions that barter became less popular over time. So pay attention to the rise of bartering will give you a clue how close we are from that “wall”.

So much to get done this weekend again, got to run.

Have a great weekend all!

TLC Weekly Update September 4, 2020

image

What a week for the stock market – when everyone was talking about the market would never go lower because of the Fed policy, next thing you know we got a one day drop of more than 6% in Nasdaq 100 and 3% in S&P500. Usually September and October are the more volatile months so more fireworks is very likely in coming few weeks. On top of that, we have US election in early November. This is going to be very interesting for aggressive traders going into the end of this year.

Robert Greene just released a new video on human irrationality. It is a long video (about an hour) that I think everyone should watch and learn from it.

For those of you who grew up with the Apple II computers, you probably played the game Prince of Persia. Here is an interesting video on its creator Jordan Mechner who figured out how to break the Apple II hardware limitations. What he has accomplished shows the importance of having multiple voices in any large scale projects. If he had stayed the course of doing what he thought the game was all about, Prince of Persia would not have becoming the iconic classic games of all time.

And remember, never ask a surgeon whether you need a surgery – interesting talk of clash between Canada’s CMHC outgoing chief and Canadian real estate industry.

Looks like this weekend I will have a break from my marathon meetings. I need this badly as my biological clock is totally messed up over the past few weeks. Some “me time” for meditation and exercise sounds like a plan.

Have a great long weekend all!

TLC Weekly Update August 14, 2020

image

Finally face to face meetings after “stage 3 re-opening” is here in Toronto area. Meeting marathon still. So much changes have to be implemented in everything and everywhere. The businesses I invest in all have to change the way how things are done so that the latest health guidelines are followed. Any failure to comply with the regulations can result in hefty fine …

This week we also had a major hardware failure. Last time that happened was several years ago. There are lemon cars … now I wonder if there are lemon servers.

An interesting article about the maintenance of 747s. It definitely echo the same theme of another article I linked to back on April 17. These systems just do not die. It is a very important lesson for modern equipment makers to pay attention to – it is just irresponsible to make appliances and capital equipment that do not last.

Here is a well balanced video on Canadian real estate market now and its future. I like his data driven approach. You may want to apply his methodology to analyze the real estate market in your area in case you are interested in buying or selling a property.

It is really impossible to speculate what will happen when the relief programs introduced by all these governments coming to an end. For Canada, there are more than 4.7 million Canadians receiving government support money (CERB) at $2000 every 4 weeks as of August. Canada is a country with an estimated population of 38 million people with about 22 million people in the workforce. It is 1 out of 4 people in the country receiving support payment.

There are also many full time college students getting CESB at $1250 every 4 weeks. But these special programs are going to stop by the end of August. Mortgage deferral programs the government asked the banks to provide are 6 months long. Those will end soon too.

What it means is that by September the impact of permanent job losses due to COVID19 will finally be felt. Since new businesses would not just pop up from nowhere, and that all existing businesses are in survival mode, it is going to take a long time before new job openings are created.

Similar problems for sure happening to many other countries. It is pretty clear that a global recession is coming. How to navigate through this difficult time is a tough question. Many people asked all kinds of questions on various financial decisions. It is really a matter of personal situation thus I can’t generalize the answers here.

What it looks like to me is that we are transitioning into yet another new era driven by technology. Thus “old economy” businesses will have a tough time. Technology companies enabling work from home, remote communications and secure remote access of corporate data would do very well.

But we really don’t know much about the future at this point. Hence my best advice for my readers is to stay conservative financially if possible. Reduce unnecessary spending is always a good idea. And if you are stressed out by the pandemic, read my last weekly update. There are some materials that you can learn from to cope with this.

Stay safe, keep fit and have a wonderful weekend all!

TLC Weekly Update Aug 7, 2020

image

Another hectic week passed with me not knowing what time it was until the alarm clock fired off for the next meeting. It was not pure business meetings though. My friends who need my help called more often during this outbreak. Glad that I can give them a hand in this crazy time. Things are getting difficult everywhere in the world while the stock markets and precious metals are flying to the moon.

One thing I learned from friends with connections is that many Canadian banks are no longer willing to renew mortgages for clients who are self-employed. Or that they would tighten up the requirements so much that these self-employed individuals are forced to take on second mortgages. I never get the logic behind this line of thoughts by the Canadian banks.

Maybe, it has nothing to do with the banks because they are forced to follow a stiff guideline from Bank of Canada on all mortgages. Any irregular income makes it very difficult to satisfy the one-size-fits-all metric. At the end, Canada and other countries taking a similar approach to banking regulations are destroying their economies from within.

Latest discussion about the zero bond yield situation from Bridgewater should be useful to those who are wondering what to do with their retirement funds.

Lately, I have to help quite a number of friends with their life crisis due to COVID-19. Be that losing their jobs, businesses and lockdown depression, I found I keep referring them to this old video from Tim Ferriss on defining your fears instead of your goals. And for those who manage to find meaning from the video, I ask them to go read either The Obstacle is the Way by Ryan Holiday or a easier read, The Subtle Art of Not Giving a F*ck by Mark Manson.

If you know of anyone who may benefit from the video or the books above, spread the words.

Life is tough. But there is always hope.

Have a great weekend all!

TLC Weekly Update July 31, 2020

image

An interesting week of wild market actions that left many traders puzzling what to expect next. Well, take it one day at a time is probably the best advice I can give. There is no point to engage in trading when you do not have an understanding of the context. Take a break could be a good idea too so that you can clear your mind from fixation of specific narratives of the market.

Rarely do I find CNBC makes meaningful videos. This video is an exception – watch it to understand why Amazon has no competition in the cloud storage arena. The fight is ongoing to be the leader in this field but the second place player Microsoft has a long way to get near Amazon’s market shares.

Good read about Ida Wood, one of the most interesting persons of her time. I like the fact that she was able to handle her husband’s gambling addiction in such subtle way that otherwise the wealth would never have been preserved. As a trader, it is in fact important to learn from this lesson and save our winnings systematically so that we do not lose all our money back to the markets.

Robert Greene has been interviewed by many people but he did not have a Youtube channel until now. His first video, The Crisis Generation, is a good one. It is about 30 minutes though so enjoy it over a long break when you get the chance.

I have re-written a script for my video lesson the third round already. Still not satisfied with the result. So members of DaytradingBias may have to wait a little longer.

The week was so hectic that I did not even know that it is Friday already. Having all these phone calls from Asia to Europe scheduled at odd hours is really messing up my sense of time. My goal to build this trading power house is taking shape though. Exciting time!

Have a great weekend everyone!

TLC Weekly Update July 17, 2020

image

Ontario is going for stage 3 reopening in many areas of the province today. However, the area I live in is still stuck in stage 2 so it is still difficult to organize face to face meetings. And it seems like majority of the people have accepted the new reality after months of restricted access to, well, everything. Restaurants are still not allowed to open the dine-in area. But then many of them are getting creative and use the parking lot as a patio so that they can at least take on some businesses. From what I see, these patios are all packed in the evening.

Vaccine news have been gathering all the buzz lately. Anytime some hype about a COVID-19 vaccine is announced, the stock market indices just jump higher. I am no expert in medical science but I do know that we have no vaccine for common cold. Here is a good read why there is no such vaccine.

My take is that all these efforts wasted on making vaccines for COVID-19 should be better spent on mass scale sanitization equipment. For example, Korea and Japan are working on mass scale UV light based air filtering for indoor places like malls and office buildings that can work against not only COVID-19 but all kind of viruses. Isn’t that more practical and meaningful for the long term?

Here is a video clip with Peter Thiel commented about global investment landscape. His view is always interesting and unique. This is good video for all those who care about the future.

I will spend this weekend fixing things up and reflect on the progress of various projects. Sometime it is important to take a break from intensive mental work. The brain needs to recover too.

Have a great weekend all!

TLC Weekly Update July 10, 2020

image

Another extremely busy week has passed. For some mysterious reasons, all kinds of equipment failure has happened. From power outage to internet outage and Tradestation going crazy in last hour of trading … I can really use a break.

One good news though is that the deployment of my trading models on MultiCharts has been a success. It is working better than I anticipated. No complications at all and the automated trading works as expected. I will write about it once I gather more data.

Due to the hectic schedule I could not really sit down to do the recording for the video lessons I planned to do. Have to squeeze some time out to get that done.

I am often attracted to read all about lefty since I was young. Here is an interest read about lefty. In traditional Chinese culture, it is a bad omen to be a lefty. So, when I was young, I was persuaded (by violence, of course) to not use my left hand to hold chopsticks or to write. Well, it worked, sort of. I ended up using right hand to write and eat most of the time but then when my right hand is busy, like using the mouse on a computer, I would switch to left hand to write things down or eat.

While I am going through many meetings to raise funding for my new prop trading venture, I often came across this belief that generating north of 50% a year is too good to be true. And when I try to explain how it is possible, it often leads to rejection at once. People don’t like being lectured on what is possible because to some, it implies that you are challenging their ignorance and no one likes that. However, after I include an introduction about Renaissance Tech, it makes the meetings much more pleasant.

Here is an article about Renaissance Tech for those of you never heard of James Simons or his legendary Medallion Fund.

The stock market indices, mainly the Nasdaq 100, continue to push higher has caused quite a lot of debate in the media and on the internet. Expert opinions are all over the place. Personally, I think the broader stock market will be range bounded in the near future as Fed and other central banks reduce their presence in the markets. Without more stimulus, there will be limited upside. And the game is to wait for the US election result. I have no idea what to expect from there so no comment on that.

For those of you interested in applying AI to trading, check out this video of NVidia’s team using AI to create the PacMan game from just watching the game. Look at how far AI has improved over the past 20 years. The current iteration of AI platforms that auto create trading strategies are still very primitive in comparison. And none of that has the correct framework of price discovery built-in hence the trading strategies created are mostly useless at best.

My bet is that we will never see such a platform becoming available to the retail traders because, for a functional tool like this, the creators will work with big money instead. Serving retail traders does not make sense because retail traders are not equipped with the knowledge to appreciate the power of such tools. The theme is an echo of what I experienced with my fund raising effort.

Got to go.

Have a great weekend all!

TLC Weekly Update July 3, 2020

image

Today is a US market holiday making this a long weekend for me. Many of my friends in Toronto find it odd that I rarely take a break on Canada Day (July 1st) while enjoying my time the weekend after. Well, they are not aware of my trading mainly deal with US markets so my holiday schedule is really the American one.

Just heard the latest podcast Tim Ferriss Show with Hugh Jackman this time. A very interesting podcast packed with a lot of details that is never disclosed before. Tim Ferriss did an amazing job getting his guest to spill his guts. Enjoy the show if you have 2 hours to kill. And in case you prefer to listen to it on Youtube, here is the link for that.

A short clip with Ray Dalio summing up perfectly the kind of financial markets we are dealing with. It is difficult environment to navigate if you do not have a big picture understanding of what is going on. Mr. Dalio summary can help you pay attention to what matters most at this point in the economic cycle.

Long weekend is often a good time to reflect and contemplate what to do next. Many people tend to imagine too much and try too hard to develop a plan that they can never follow. I am a true believer in the accumulation of results. Or as Steve Jobs’ famous speech put it, “You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future.”

Dive deep into one subject or topic at a time and do your best to learn as much as you can is a very empowering experience. Don’t tell yourself you are “trying to learn as much as you can”. That framing of “to try on something” already put you in a state of not learning, or, in a state of rejecting whatever coming out of the experience. Words have power and programming yourself with the wrong words have consequence.

For those of you struggling with trading over the past few months, maybe it is time to dig deep and refine your skills related to trading. 10% better in one area within a month may not do much. But after getting better by 10% (or more) in several areas of your trading can be a game changer to your overall performance. There is always room for more improvement in our line of business, and in life too.

Have a great long weekend all!

TLC Weekly Update June 26, 2020

image

Time flies when you are having fun, or, when you keep working and lost track of time. I literally forgotten it is Friday already until this morning. Thanks to a member who pointed out an issue with daytradingbias.com, my team realized that the server upgrade indeed has broken something important. It took several days to get it fixed … hopefully this is the last glitch from the upgrade.

Many people email me wondering the status of my automation project. It is going great. Many more of my algos are converted and tested on Tradestation. If they all function as expected, I will deploy more of them.

Interesting read of someone’s attempt to create an insurance product protecting the world from the economic devastations resulted from global pandemics more than 10 years ago.

For those of you too young to know much about the financial crisis back in year 2008, and those of you who have only heard the story from mainstream media, here is an article telling us another side of the story. It has a lot of inconvenient truth there.

On the lighter side of things, watch this video on drawing Homer by an algorithm.

Another busy weekend ahead … will see how much I can get done.

Have a great weekend all!

TLC Weekly Update May 15, 2020

image

Another roller-coaster ride with the stock market when the world is trying to re-open from lockdown. It is very interesting from an observer point of view. For many traders, however, it is a difficult week to deal with.

I will be busy this weekend upgrading daytradingbias.com to support SSL connection. Significant changes to everything within the site must be done to make it fully support SSL. I am keeping my fingers crossed hoping that everything will work out smoothly.

Interesting read on the way how the antique books were made. I never thought of the implications.

Tom Bilyeu conducted an interesting talk with Ray Dalio. It is long and packed with information. If you are concerned about the near term future what’s in store like the economy and outlook of job openings, check this video out.

One important theme Ray Dalio explained in the video is that coming 3 to 5 years will be very difficult time for many. It is important to figure things out and upgrade yourself with more knowledge so that you are flexible enough to take on the future challenges.