Appreciation of Renminbi

I think China Renminbi appreciation can help solve the world economy problem a lot. I think the world economy problem is caused by economy imbalance between China and advanced countries.

According to theory, countries who are running account surplus, their currency need to appreciate. Countries who are running account deficit, their currency have to depreciate. Considering that, USD need to be depreciate against Renminbi, Euro need to be depreciate against Renminbi. Obviously, both USD and Euro depreciation rate against Renminbi are too slow. China artificially does it by selling their currency and lend to those advance countries to spend. Hence, because of the inflow of huge money, the lending rate become very low. This induce people in advance countries to spend beyond their mean.

Now that they have borrow too much. Their financial institutions have been very cautious to lend money now, because although the inflow is huge, their leverage is at all time high too. Because of this financial distress, they need to begin their long painful deleveraging process. In other word, their aggregate demand has reach limit.

China has the biggest population in the world. And they have the highest saving rate in the world. As long as Renminbi appreciate, and they feel richer and spend more, I believe they can offset the drop of demand of advance countries because of currency depreciation and deleveraging process. More over, this can restore competiveness of advance countries and solve global imbalance problem, which is the root cause of this economy turmoil.

Initial stage of stock screening

My current 1st stage of stock screening process is to find company which can grow revenue and earning simultaneously, through quarterly reports. I believe in this economy difficult time, it's hard to find, unless they are innovative, gaining market share, or small in size where growth is still abundance in it's industry wise or size wise.

Housing market

Can you smell the deal? The housing market is beginning to turn to buyer's market.
It's not just the price, it's the way the advertisement sound, luring buyer to buy like "super cheap deal", "super worth", started to loom.
One of the indicator to look for is the rising of rental yield, representing drop of property price.

How to win monopoly game

Monopoly game is a fantastic game. Its truely real life. You can view player as you or a company.

1) cash flow is the single most important thing. Build it.
2) Make sure you and the company you invest always have cash to meet daily life and daily operation, including allowance for unexpected event that need cash.
3) After fulfill step no.2 requirement, all cash are excess cash. Find place to park your excess cash at places provide highest return with tolerable risk
4) As your asset or investment generate income, reinvest the cash and find place to park the cash like step no.3.
5) Always review and repeat step no.2 to step no.4. As you have more asset, cash flow grow.

Additional tips:
6) When supply become limited, willing / not afraid of, to bid for high price or offer record high price, depending on your financial strength, (financial strength can be known by reviewing step no.2) to get asset and to grow income, but most important to gain competitive advantage.
7) Willing / not afraid of, to buy / trade with other for very high or record high price, to get asset that have potential to provide you competitive advantage, in whatever way (even mortgage)

Lesson
8) When you are strong, (most importantly you have a lot of good assets, 2ndly you have have lots of cash) you have negotiation power, you get better deal. If you are weak, you have to accept lousy deal.

Frog characteristic

Employee who likes to jump from one company to one company because they think they can have a better working environment, whether regarding money, company policy, politics, collegues; tends to change their believe easily when things go against them. They see things in short term, they are not willing to put in effort to change the working environment, they often blame others, and never look inside themselves.

If those people become employer, they will look only to profit. They will always look to change from one employee to another employee to get a better employee, they will not put in effort to train employee.

Don give up easily just because of obstacles, overcome it and you will see bright sky.

Invest in boring company

In this generally stagnant global economy growth ahead, not every business will fall into difficult situation. Some companies will continue to earn a lot of money. I see those companies fall into quite boring company. They have stable and huge margin of positive free cash flow, huge margin of earning, stable and slow growth of revenue, low debt burden.

Those companies will gain pretty much attention in difficult time and have high valuation ultimately.

人若不用脑想东西，是会变笨的

以下是说我自己。
人若不用脑想东西，是会变笨的。
不管你读多少，若照单全收，也只是人云亦云罢了。
学不贵多，多想想吧！