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Trading Why couldn't Japan do as its wish?

Discussion in 'Shares' started by wdongli, 24th Jun, 2012.

  1. wdongli

    wdongli Well-Known Member

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    Fukushima fallout was disastrous. Nuclear power is very risky. No one wants to live in the shadows of the disastrous.

    Japan should not use nuclear power. All of nuclear reactor should be closed up! It is not wrong but just could not be done in reality. How many people have the experiences to be burnt by fire? Why do we use fire everyday even some houses just are burnt down?

    We all know the reasons and get used to the reasons. However when the people see the disasters in Japan, we could not help but want not to know nuclear power instinctively but very primarily.

    ***
    It is very helpful to upgrade our own mental framework to ponder about why Japan just couldn't do as its wish and never use Nuclear Power again!

    Wisdom doesn't prove we are perfect but gives our ways to use the perfect part in our imperfection! Intelligence does confirm we can go forward with the best or better choice from a lot of options.

    Someone like to say "Never do it again." It actually is a claim to give up. However surrendering to the tyranny of nature, human kind, and stock market means no future.

    ***
    It is very painful to live in the ruins. However reality is cruel too. Sometimes you have to choose and no options are just good to you.

    Faced with electricity shortages and the prospect of rationing power supplies through the approaching summer peak, Japan reluctantly returned to nuclear power. In a decision that went against most popular polling as we could image, two nuclear reactors would be ordered to restart.

    The reality is if no enough power, the society would be deteriorated and live in ruins forever or disintegration. Few of ordinary people care about it, which is understandable.

    ***
    Global uranium industry, still bruised and battered from the Fukushima fallout, this was an important day.

    The restart of Japanese reactors plays as the first of two key steps needed to drag the sector out of the nuclear winter that descended when tsunamis overwhelmed the Fukushima nuclear plants.

    Fully understand Japan would continue to consider a long-term exit from nuclear power, but actions spoke louder than words. A nation as individual traders or investors have to be survival first and then revival!

    ***
    However it can be expected more rigid risk management would be introduced in nuclear power industrial.

    It is unrealistic to expect Uranium industrial would be recovered in days let alone EU crises have added the barriers for the recovery. It seems the uranium industry has to wait for a confirmation from China that its nuclear power expansion plans, placed on pause in the wake of Fukushima, are back under development.

    It seems true while decisions in China, Korea and Russia were more pivotal to the uranium growth story, this week's Japanese restart was still ''an important symbolic milestone''.

    ***
    It seems fundamentally Uranium industries would come back to its normal track but when it would happen depends on the mass psychologies.

    1. If the country that was affected the most by this disaster is restarting plants, then the rest of the world starts to think differently too.
    2. Markets have a psychology all their own, and the reaction on local trading was hard to interpret.
    3. GFC and EU crises have made specific risks to the uranium industries, which connected with debt and future projects that affect their valuations.
    4. Bearish investor sentiment towards the global economy had overwhelmed any good news that emerged on an industry level.
    5. There was evidence that the small end of the uranium industry was close to conceding defeat.

    ***
    It could be worse before better for Aussie uranium companies: If uranium remains a core asset to a company, its activity seems to be at tenement maintenance levels until a recovery is apparent in global sentiment for uranium.''

    With a spot uranium price hovering below $US51 ($A50) a pound, and contract prices believed to be closer to $US60 a pound, it seems there was a long way to go before vibrancy returned to the small end of the sector.

    The price that's required to give a 15 per cent return on a typical greenfield uranium project is about $US83 per pound, so at the moment it is unlikely that any of the small uranium explorers would make appropriate returns.

    ***
    Good news tend to be bad news for some times while all are losers. It is another side of the stories. Don't say never do it again but think about when you should do it again, which is the time you believe you have high odds to be profitable and would like to take the risks.

    Sometimes in life you don't have choices to take some risks and you naturally are chosen as something you like or dislike. No choice and then take it as it is! In the stock market you have all of choices for the time, and what you like to buy, hold, and sell. We are free.

    Freedom without responsibility means hell! Having all of choices but no brain to choose, means gambling in random. In the stock market, we need to know any good things happen in process. Investment or trading should be the matter to know the process and then get the best choice in the time range you like to play.
     
    Last edited by a moderator: 24th Jun, 2012
  2. wdongli

    wdongli Well-Known Member

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    Austerity, growth, and reforms in EU

    In hindsight, EU was a institute "motivated by politics and delivered in economics." It has structural problems that its members could not work together as they should to make a decision among the conflicted political and economic interests for collective good.

    Europe was being presented with either "austerity with reforms "or "growth with reforms" but needed "austerity with growth and reforms." Any one of austerity, growth, and reforms is missed in its future plan, would result in the failure of EU in tsunami.

    It is economics or business 101 that you could not just save the money, or just chase after growth without tough cost control for your economic or business goal in long term.

    1. It is similar that you cannot make good enough profit by putting the money into your vault; profit needs the plan to make the money.
    2. To get balance between austerity and growth, it is necessary to go any extreme ends even sometimes in short term you have to do so.
    3. Traders tend to be greedy in good time and be fearful in bad time, which would result in failure of most traders since it is impossible all would be lucky at the right place for their good time always.

    ***
    In bad time, we tend to save more even we have little income to save, which make life tougher. It is always right to spend under the means in good days. All need to put money aside in good days for rainy days!

    The problem is we don't save the money in good days so that we could not get enough resource to cover the losses in rains let alone the storm or tsunami. Have we focused on saving too much to the income but it is little to get life worse.

    EU has moved into austerity for years. It has helped to fulfill its self-destruction for long time. It has come to a point, death or rebirth! It seems that

    1. Germany would not accept the "pain" of bank-rolling this "grand plan" without any conditions. No one would do so.
    2. No reform to fix structural problems is pain free. No populists could lead the crowd out of ruins.
    3. Other nations struggling in a two-speed euro economy has to accept the "pain" of reforms.

    EU in next two or three months has to make its mind.

    ***
    In the ruins, warriors of the stock market have given up their hopes. They could not change anything in EU even they could change themselves to use the chances popped up due to the event in EU.

    If you don't want to give up you have to get balance between risks and chances. It is a time you must be self-aware and environment-aware. It is a time genius falls into hell and the poor becomes poorer. It needs vision and discipline plus self-reliance more than any time in the last decade. Any tiny mistakes with unaffordable risk to your total capital would put you in dire. However it could be high rewarded time if you are right.

    You have to act with your own reasons from due-diligence. You have to be ready for EU disintegration and you have to think about your last defensive lines. You have to know all of your action could be quite high-consequent.

    ***
    It is true no one would like to see EU disintegration. But if anyone was going to call on taxpayers in Germany for money, they need some guarantees that all are under control. Responsibility and control go hand in hand.

    It is the same to my warrior service business. If you want me to buy your shares, you have to lower the price enough. You were greedy in the good time. You have to pay the cost you have to pay. In the stock market, no one can destroy himself to save anyone else even your dad or mom!

    Yes, Europe's leaders are facing intense global pressure to head off a potentially catastrophic economic collapse. The summit this week is very crucial to everyone globally. EU has to solve the problems without war!

    ***
    I do feel that in the long term "the European integration project" was going to go ahead, "like it or not". It needs painful decision to reform nationally and in EU scopes.

    There should be a huge reconstruction of Europe economically not just politically. EU has reached its limitation of politics. It seems whatever the outcome, a EU collapse or a drive to greater political and economy organization in Europe.

    Europe needs to be reformed as Federal structure with greater political and economic power to let it work together as one to others in this world. It should not just mean peace to others but power. It has to be powerful enough so that it could contribute to human kind positively.

    ***
    No intention to predict the future of anything or anyone but to sharpen my mind for wisdom. Wisdom has not limitation!
     
    Last edited by a moderator: 25th Jun, 2012
  3. wdongli

    wdongli Well-Known Member

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    Window dressing and buyback

    Tactically all in the stock market sell their losses for tax deduction, which should not be used every year or normal year.

    If it is abused you would be dead sooner or later. You need to avoid the losses first and use it to reduce the impacts of your mistakes.

    However losses are inevitable and you should know this tactics deep enough to use it for your benefit.

    ***
    Generally saying a share buyback is the only way the company can legally manipulate it's share price and get a tax break at the same time.

    It is also an especially useful tool around the end of the financial year for financial companies as “window dressing”: a euphemism for sprucing up their share prices.

    All perfectly legal of course.

    ***
    It is needed to remember any company can just announce a buyback, as it has, and never buy a single share. Legally, it has no obligation to buy anything but the effect of the buyback announcement is nevertheless to put a floor under the stock price.

    This week is a vital one for the financial sector as share prices on the final day of the financial year can determine how much the managers get paid.

    So those managers would sell the losses and buy the winners around the last days of financial year. They are not linked to any fundamental reasons but for their own interests. It occurs year after year.

    ***
    If you know the fundamental or value, you could use them for your benefit even you have to do opposite to the managers.

    However it is very tricky and you need to know the risks to join the club of speculation in the end of financial year.

    No free lunch and nothing if can do, should not do but when do you do, what should you target, and how should you run!

    The key is if you feel not knowing good enough don't do!
     
  4. wdongli

    wdongli Well-Known Member

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    Another make or break time!

    There are too many make or break time in EU. It was said next week's summit is make or break time for the European Union.

    It is very fearful and could bring in another apocalyptic consequence. Just image the potential death spiral consequences not just only economically but politically.

    Greece now seems not a problem. Actually it is never by itself. The key is what happen to the single currency's big four countries.

    ***
    Sentiment works with dire situation could result in self-destruction. It seems that

    1. Without a successful outcome at the summit, ''there would be progressively greater speculative attacks on individual countries, with harassment of the weaker countries.
    2. The attacks would be focused not only on those who had failed to respect EU guidelines, but also on those such as Italy.
    3. Sentiment does hurt economic fundamental and the growth
    4. If the summit fails, EU would face with creeping economic paralysis, the frustration of the public towards grow, and worsen the existing vicious circle.

    ***
    EU need more integration economically even politically. If the summit failed to resolve the problems quickly, the crowd sentiment and the governments and parliament will turn against that greater integration of EU.

    The self-destruction process has been started. "Even in the Italian parliament, which has traditionally been pro-European and no longer is'' was said.

    Yes as it should, the key eurozone leaders were working on a plan designed to halt the spread of debt contagion while satisfying Germany's refusal to sanction financial irresponsibility.

    ***
    To stall the self-destruction:

    1. There should be a clear sign of the eurozone's willingness to integrate further in such a way that Europeans know where they're going
    2. The markets should be convinced that, having given birth to the euro, the will of the member states to make it indissoluble and irrevocable is there
    3. EU would work together to strengthen by a clear road map towards integration.

    EU's problems are structural and there may not be, indeed, there will not be, a fully tested and detailed blueprint. However there should be some strong elements and a short road to get from there to the overall solution.

    ***
    What are the minimum requirements to avoid EU's death and the dire consequences?

    1. a full banking union, with advances in terms of integrated, and if possible unified, supervision'';
    2. ''a European deposit guarantee'' system;
    3. the plan for ''new market-friendly policy mechanisms'' to help countries under attack
    4. all nations have to comply with EU demands for fiscal discipline.
     
  5. wdongli

    wdongli Well-Known Member

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    The root causes of EU crisis

    I could not say I am qualified to find the root causes of EU crisis but I do feel I have to work hard to get it out bit by bit. It is about financial tsunami, which, once happens, would make anyone who dare in the market before that, dead.

    It is the time genius and bum both are the losers.

    Ever since the Crash of 2008 there has been a widespread recognition, that economic policy and its corresponding economic theories has failed, which has produced millions of depressed warriors, the traders or investors, in their own valley of death.

    ***
    I failed to recognize that the failure in EU and its impacts are more profound than the market recognized. It seeds my failure to lock the profit I should. In hindsight, all of failures come from ignorance and arrogance.

    Fundamentally modern economics tried to model itself on Newtonian physics. It sought to establish universally and timelessly valid laws governing reality. However there is a fundamental difference between the natural and social matters. Economies need their participants who have their own world views, different capability to know the world, and their decisions on imperfect knowledge.

    In economies no any declarations could be true without the necessary and sufficient conditions, which constantly changed due to the perceptions of these participants. Most of traders or investors fail in the market due to their failure to know this dynamics.

    ***
    Why do so many genius fail to pick up the proper economy policies? Why did so many genius run into the hell in GFC crash and EU crisis?

    They don't understand some basics of the social matters. They don't understand any patterns could mean different from different people. Scientific method needs an independent criterion, by which the truth or validity of its theories can be judged.

    Natural phenomena constitute such a criterion; social phenomena do not. Any people who fail to know this basic truth would fail in the market and fail the economies if they are the policy makers.

    ***
    Natural phenomena consist of facts that are true independently.

    The facts then serve as objective evidence by which the validity of scientific theories can be judged. That has enabled natural science to produce amazing results.

    As an Engineer I never has been frustrated by what should be done since I could follow the scientific theories for my works.

    ***
    Social events such as buying/holding/selling in stock market, by contrast, have the genius or bum or wise or stupid participants who have a will of their own.

    For example, the share prices are not detached observers but engaged decision makers whose decisions greatly influence the course of the prices. Generally saying the social events do not constitute an independent criterion by which participants can decide whether their views are valid.

    In the absence of an independent criterion people have to make their decisions not on knowledge but on an inherently biased and to greater or lesser extent distorted interpretation of reality.

    ***
    When no knowledge can be dependent on, we tend to be fallible and tend to be in indeterminacy and have the consequences in surprises. The resulting uncertainty make the social sciences impossible to produce laws similar to Newton’s physics.

    Modern economics have got a lot from the scientific methodologies. However when they sought to remove this handicap by taking an axiomatic approach similar to Euclid’s geometry, the economies become false sciences when it is far way from some points in applications.

    Do you know the theory of perfect competition, which is postulated perfect knowledge. But the postulate worked only as long as it was applied to the exchange of physical goods based on my reading.

    However in stock market the postulate became untenable because the participants’ decisions involved the future and the future cannot be known until it has actually occurred.
     
    Last edited by a moderator: 25th Jun, 2012
  6. wdongli

    wdongli Well-Known Member

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    What should I learn?

    We could not be qualified to evaluate everything in the stock market, businesses, and economies.

    We could not hold the all of knowledge of human kind in a tiny brain without crashing it down onto the ground. We have to select what to read, learn, and ponder for what we would like to focus.

    So if we believe we need the whole picture and could interpret the full picture to get the chances with tolerant risks, we have to ignore the things or theories which are unrealistic in the stock market.

    ***
    Seriously saying, we tend to look after the strict patterns in the stock market after educated on natural sciences which is just look after the sure or defined truths.

    Now most of veteran traders and investors understand in the stock market, you cannot predict human reactions but you can predict when all of people are euphoria or depressed.

    The key is to get out if all become too emotional, which would definitely result in greed overflowing; if all become too fearful, which would definitely lead us into imaginary hell. All mean over-price or under price in extremes.

    ***
    One thing needs us to remember that we need a theory to guide our practice in stock market.

    There are a lot of theories which try to beat the market down but eventually lead their users or believers to trade themselves in. Look around you can find too many different genius suck their cuts in the valley of death.

    The genius believe something and very good on something but they just don't know what they need to be known.

    ***
    Do you know Karl Popper? It was said he taught that people’s interpretation of reality never quite corresponds to reality itself theoretically. In the stock market all should agree with this assertion, right? How many people in the stock market really want to learn the relationship between them? Few even it can be learned!

    There is a two-way elements between the participants’ thinking and the situations in which they participate.

    1. People seek to understand the situation; that is the cognitive function.
    2. People seek to make an impact on the situation; that is the causative or manipulative function.

    The two elements link the thinking agents or brains and the situations in which they participate in opposite directions.

    ***
    The cognitive function is to understand what the situation is supposed to be, which will determine the participants’ views; the participants’ views are supposed to determine the outcome.

    We usually do one function only and we get used to as in the school. However in the stock market you have to do both if you buy, hold, and sell in the stock market.

    When both functions are at work at the same time they interfere with each other. Situations change, we changes, and then situation changes...

    ***
    The two functions form a circular relationship or feedback loop. This feedback loop is reflexive.

    In a reflexive situation the participants’ views cannot correspond to reality because reality is not something independently given; it is contingent on the participants’ views and decisions.

    The decisions, in turn, cannot be based on knowledge alone; they must contain some bias or guess work about the future because the future is contingent on the participants’ decisions.

    ***
    In the stock market, we have to know we don't work based on black and white plan. Fallibility and reflexivity are tied together. If we are perfect we could not get profit. Profit only could be made in imperfect in the stock market.

    The root cause is without fallibility there would be no reflexivity even no reflectivity doesn't definitely result in fallibility. People’s understanding would be imperfect always without maters there is or not reflexivity.

    We do need to remember:

    1. Fallibility is the first born in our cognitive and practical processes.
    2. Fallibility and reflexivity work together and ensure two divergences happen.
    3. A divergence is between the participants’ view of reality and the actual state of affairs.
    4. Another divergence is between the participants’ expectations and the actual outcome.

    So theoretically, we have to make mistakes and we have to be alerted by our own mistakes. We have to be protected from the damages caused by our mistakes or the divergences.
     
    Last edited by a moderator: 27th Jun, 2012
  7. wdongli

    wdongli Well-Known Member

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    Sovereignty, solvency, and game theory

    It seems clearly that EU's fate is tied up with the fiscal union.

    However the fiscal union need the sovereignty surrender which seems not the option the depressed losing nations really want and would fight until they have no any options against German.

    It seems no guarantee that all wants EU to walk down on the road of the fiscal union. EU is at a cross point and markets seem ready for the worst or at least no decision made in the coming summit.

    ***
    All could be understood by the game theory: individual interests, common good, and interest conflict for maximum benefits after committing the crimes.

    On one side, Germany remains reluctant to foot the bill for saving the rest of the euro zone. And, on the other, debtor nations will hardly be keen to lose their national sovereignty. It has been suggested that Brussels will have the power to change national budgets for those countries that breach their debt and deficit targets.

    The principle is: “Sovereignty ends when solvency ends.” The nations in EU with their sovereignty would not give it out if having any possibility.

    ***
    It is dire and except German all of nations in EU could be bankrupted.

    The fiscal union would bring debtor nations one step closer to being able to raise funds through newly created euro-zone bonds. This would drastically lower the borrowing costs of countries such as Spain and Italy, prevent sovereign debt default and help to secure the future of the euro.

    German want the EU but is reluctant to take the cost. Europe has been the origin of the wars for long time. EU is a hope but its politicians and voters need the gut to pay the cost for common good.

    ***
    I just question to myself that without EU how could they develop their future peacefully? In ruins it would be the game for pig chiefs or populists in politics. Are there any great leaders who could lead EU out of ruins?

    Stock market shew its worries very much in the Monday. Globally all of stock markets were one way: down and down to hell. XAO has put it on the way into hell for more than 1 year. Could it drop down further?

    I do feel traders and investors in XAO have thrown anything which have the risk into the hell into the hell! So if EU summit plays better than the market, the traders would act fearfully in the new financial year.

    Are you sure? Nothing is sure among the crowd in ruins?
     
    Last edited by a moderator: 27th Jun, 2012