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TLC Weekly Update August 14, 2020

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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!

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TLC Weekly Update Aug 7, 2020

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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!

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TLC Weekly Update July 31, 2020

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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!

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TLC Weekly Update July 17, 2020

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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!

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TLC Weekly Update July 10, 2020

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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!

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TLC Weekly Update July 3, 2020

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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!

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TLC Weekly Update June 26, 2020

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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!

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TLC Weekly Update May 15, 2020

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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.

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TLC Weekly Update April 10, 2020

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Easter Friday is a US market holiday. So, here I am taking my time to write this while drinking my morning coffee.

Another week of extreme market actions with US Federal Reserve going all-in with yet one more $2.3 Trillion bailout program on Thursday. We all know the claim that it is done to support the small and mid-sized businesses is just a lie. I don’t even want to guess which pockets those money will go into.

This is the fun part in watching all these news over the years on all these b.s. government aids claiming to do whatever for the economy. The money almost always ended up in the hands of those not targeted by these programs. It happens every single time. People choose to not vote for a reason – after years of disappointment in the actions of the politicians.

Can you blame them?

But US Federal Reserve governors and chairman are not even elected by the people …

I am asked about my view of the stock market. I have been bearish all along as I know the outbreak is something we cannot foretell if it is over. In addition, the end of the outbreak solves nothing. However, given the way Fed did what they did this week, I am guessing they are using the same 2019 playbook they did to print the market higher with the hope that people will turn into buyers again buying on all weaknesses.

It may not work this time, because all the stock market did was just 20% correction from year 2019 close. It is not even remotely corrected enough. That tells you how freak out the Fed really is. Remember baby boomers are not going to buy stocks from here. They are net sellers since year 2018. And the younger generations have no money in general, let alone investing in the stock market. The year 2019 run was hot-air created by the Fed and now that illusion is all gone.

The one nightmare the Fed trying to avoid is the redemption of index ETFs, once that started, it will not end well because it will exaggerate the declines that not even the Fed can put a brake on. Well, maybe they can if they start buying the stocks off the retirees now.

Switching to a happier topic here. No point grinding on doom and gloom.

Here is an article about college students constructing their colleges in the virtual world of Minecraft. Everything in scale and they even add special mods to Minecraft so that everything looks like the real things!

I am getting close to release my video lessons for TSB and ESDTC. The illustrations are taking more time to do as I am doing it myself. I used to sketch them by hand and then my staff will turn them into nice graphics magically. Well, good use of time though as we are all stuck at home until the lock-down is over.

Happy Easter!

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Back to Canada

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I came back to Canada last weekend. Lucky that I do not have jet lag since I had to jump on top of several issues that night I landed. Been ultra busy since to catch up with so many things. At 2 am Saturday, this is the first moment I have some quietness to sit down and reflect on my experience from the trip.

What I Did in Asia

For majority of people travelling to Asia from North America during the year end holiday season, they are taking a vacation break. For me, it was essentially 12 hours work day pretty much everyday since the first day my flight landed in Hong Kong. Those exceptions are taking a detour to Singapore and other destinations, attended a wedding and had a special medical check-up.

Outside of trading, I invest in start-ups and do deals that interest me. Many people want to meet with me to see if there is any business opportunities. Others are looking for macro level financial advice from someone who is well connected and really know what is going on around the world. And occasionally, there are others with special reasons that have very interesting stories worth telling when I get the chance.

Going to Singapore to meet with several DaytradingBias.com members was the highlight of the trip. Very happy to see some new faces and those I met with the year before. It is nice to get to know you all better in person!

The Dilemma of Hong Kong

Hong Kong is in a very difficult position now than ever.

The unaffordability of living spaces for the middle to lower income families continue to get worse. Imagine how difficult it is to live in the city when the lower bound of around $18,000 HKD per month for a tiny 200 to 300 sq. ft. apartment in an average location. The same amount of money in Canadian Dollar is about $3,000 which can get you a decent space in a good location for a 1,800 sq. ft. condominium or an even bigger town house. Such compression of available living space has squeezed the life out of the people in Hong Kong. The so called middle class is now long gone.

Yet Hong Kong is still ranking as one of the top cities in the world for business opportunities. However these opportunities may not be accessible easily to those who are struggling at the bottom. Hong Kong is still a good playground for people who has the right connections and the necessary capital.

Everyone there seems to be more sensitive to opportunities in making money than anywhere else I have visited on Earth.

YouTube

I did a pro bono presentation titled “Investment Outlook 2019 according to STOPD” in Hong Kong at the Rotary Club of Kowloon Tong meeting on Jan 7th. It lasts about 2 hours and I did a powerpoint presentation for the event. The participants tried to capture the session in video. However, the voice recording was not as good as we hope for. Lessons learned from the experience and next time I will use a mic for direct recording separately.

The presentation was done in Cantonese so not everyone can understand it. If you want to watch the video (it is just me talking without the powerpoint slides), follow this link.

I am having the powerpoint presentation redesigned for YouTube. Once it is ready it will be uploaded. I will write a short article to explain some of the slides that may not be self explanatory.

If this approach works out well, I will try to do more videos in the future.

Planning Ahead

I have a line up of projects to be completed this first quarter. Talking about being busy in Asia, that was mainly meetings and brainstorming sessions. Here, back home, it is actual work to be done.

The 2nd edition of Trading Success Blueprint was ready …. until it is not. The trouble with the file format issue (Thanks Microsoft!) set me back couple of weeks until the pictures in the manual are restored back to the correct places within the manual. It will be done eventually.

Trading account applications that I thought was taken care of before I leave for Asia turned out to be half done. There is no mistake on my part, just that the brokerage side somehow were in party mode by the end of the year and failed to handle the matters properly. More waiting on this front.

The last pair of VIX based real-time trading signals / day trading strategies will be released for Emini S&P. This is under testing in real-time. So far so good, everything looks on track.

The manual that I expected to publish on these VIX based trading strategies is now going to be split into two manuals as suggested by one of the early readers. I am convinced because he actually did the split up for me and showed me that I was mixing up two different things into one. Namely, there is about 100 to 150 pages of manuscript written on day trading strategy design and principles that has nothing to do with the VIX trading methodology. He suggested that I turn that part into an independent volume with day trading strategies illustrating how it is done with just price data alone.

I think it is a great idea. So back to the drawing board and more work to be done. The good thing is, this additional manual will definitely resolve many issues for traders and giving them a head start in the day trading game. I will make sure it becomes an important trading manual for all Emini traders.

Good to be Home

I was asked how can I take on so many projects at the same time. Well, first, I am not doing all these things by myself. There are many others helping me out making all these things possible.

During the trip, my exercise regime is disrupted and my diet is not optimal to say the least. And I was loaded up with coffee throughout the day making me hyper (as evident in the presentation video). I just slowly re-introduce myself back into my rigorous routines since I have several goals related to health and physical fitness that I like to achieve. Will write about this front when I get the time.

I thought I would have time during the trip to post something. I ended up taking notes that filled one whole notebook with no time to spare. Interesting experience to pick up the pace and doing as much as I can with limited amount of time.

Feels great to be home.

For those of you who celebrate the season, Happy Chinese New Year!