The Apple of my eye – – a telescopic view

Posted on January 28, 2013 by Tsun Nin Lee

The price of the stock of Apple has dropped from a high of $702 in September 2012 to only $445 two days ago (January 25, 2013). The Apple of many investors’ eyes had given them the black eyes recently. Is there any justification for such precipitous decline in investors’ confidence in the stock’s performance? Hardly any, for the following reasons:

1. Apple’s immaculate brand name is still largely intact. A great deal of goodwill has been built up through the decade-long innovations spearheaded by the late Steve Jobs. Loyalty to the brand should not be underestimated. Competitors like Samsung maybe making lots of smart phones, giving Apple a run for its money, but despite their recent success, they are still imitators, while Apple remains the originator and innovator.

2. Both the technical and marketing infrastructures of Apple have a solid foundation, ready to break new grounds. Apple has already amassed not only financial capital, but human capital as well. It has attracted the brightest talents in the field. The machinery of innovation cannot be built quickly enough by its competitors to out- maneuver Apple in terms of development of new technology and innovative applications.

3. The market for Apple’s products is still fast expanding globally. In China alone, the appetite for Apple’s gadgets seems insatiable. The Chinese consumers are getting wealthier by the day and Apple’s products will be more affordable to more and more people. Other emerging markets will soon follow. Apple’s is also on the verge of inking a deal with China Mobile, the largest telecom company in China, which should jettison the sales of iPhones substantially.

4. Plenty of new products are being designed and developed in the pipeline and Apple TV is only one of them. Apple will take the lead as usual, leaving its competitors in the dust, trying to play the catch-up game. Due to the ecosystem that Apple has so successfully created, it will be exceedingly difficult for its competitors to imitate.

5. Apple’s strong cash position should enable it to do many great things. Its current challenges may be its inability to manufacture products fast enough to meet the demands. Downstream suppliers have to be able to adapt to Apple’s heady growth.

Fundamentally, the company is on very sound footing. Incredulous investors saw any slowdown, no matter how insignificant in the grand scheme of things, as signs of weakness. Such unfounded fears may have accounted for the recent dumping of the stocks by so many. Unfortunately for them, the stock price of Apple may soon resume its meteoric rise.

Aside from analyzing all the fundamentals, I also calculated the fortune of Apple based on the I Ching principles. I strongly believe the luck of the company is about to change from negative to positive, and strong up trend will continue to the end of July of this year.

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No Cliff, No Ceiling

Posted on January 20, 2013 by Tsun Nin Lee

The recent fiscal cliff hanger was a high wire act – – it only looks dangerous. Both sides of the aisle in Congress must behave as if they had done the most for their constituents by not yielding a single inch to their adversaries until the very last minute.  Republicans and Democrats alike were keenly aware of the disastrous results of falling off the fiscal cliff had they not been able to come to an agreement. While many people are still concerned about the upcoming debate on the debt ceiling, I am not. For sure there is going to be lots of thunder, but no rain. The same old political theatrics will go on stage, yet the ending of the play is totally predictable – – – the debt ceiling will be lifted in the nick of time. Assuming that is the case, what is going to happen next?

As far as the stock market is concerned, a bull run is close at hand, especially in the period between March and July this year. The prices of equities should rise beyond expectation of many. In my humble opinion the Dow Jones industrial index will likely reach 14,500 within this time-frame. The following rationale is the basis for my predictions, bolstered by my I Ching calculations, which I shall reveal in future writings.

1. The housing market is on the mend with great impetus. In the recent past when home prices kept on dropping, relatively few people were interested in home buying despite extremely low mortgage rates, because they figured they could wait. But soon after home prices began to rise, lots of people will jump onto the bandwagon, for fear that they would lose out on this once-in-a-lifetime opportunity to buy a home on the cheap. In conjunction with the dwindling number of foreclosures, this renewed demand will create a positive feedback loop, further escalating the home value. International real estate investors, large hedge funds, as well as sovereign funds have already shown their footprints all over the country.

2. Housing is one of life’s most essential necessities and therefore constitutes a major segment of any economy. With housing still in the doldrums, it is difficult for the overall economy to gather real momentum, impeding on the growth of GDP and jobs. But when housing recovers, the drop in unemployment rates will accelerate, fueling the economic engine further.

3. As the housing sector improves, banks will be more willing to lend because they will be less fearful of the security of their loans being impaired due to dropping home values. Small businesses should have a greater ability to obtain loans because their businesses are less likely to fail with an improving economy. Since small businesses employ the greatest number of people, the unemployment rates will soon abate.

4. Unlike the United States, China is capable of responding to any economic headwinds with great agility, thanks to its one-party system, ironically. China is currently on the path of recovery and in all likelihood will continue with its boom with its current policy of urbanization and infrastructure building. With the world’s top two economies of the United States and China surging forward, the global economic outlook will markedly improve, despite some foot dragging in Europe. But Europe’s problem, being man-made, resulting from the dissension among nations, is curable. When Germany begins to feel the economic pain of a weak European economy, it will get its act together to form a united front with other European countries to implement appropriate financial measures to stabilize the continent’s economy.

I mentioned in my previous blogs that I was only interested in double dipping in investments profits, instead of being concerned with the double dip (twin recessions) in the US economy. I am now looking forward to triple dipping, namely, by taking advantage of the great recession’s three separate opportunities for economic gain. Making money by investing close to the bottom of the stock market in the beginning of 2009 is the first dip. At present the stock prices of some cyclical industries are still lagging because most people are still worried about the economic prospects going forward at this juncture. I believe 2013 to going to be a banner year and such equities will substantially outperform. This will be the opportunity for the second dip. After that, in the next several years when everyone becomes convinced that stocks are good investments, money on the sidelines will be infused into the market and drive the prices of equities much higher. Investors would accept a significantly higher P/E ratio as the norm, pushing stocks even higher. That will be the opportunity for the third dip.

According to Warren Buffet, when others are greedy, he is fearful and when others are fearful, he is greedy. I want to now tweak this quote somewhat. When others are convinced, I am hesitant and when others are hesitant I am convinced. In other words, when many people are still doubtful about the prospects of investing in stocks now, I shall take advantage of this window opportunity to secure new positions.

I don’t know about others, but I’m ready to hang glide off the financial cliff to catch the updraft through the debt ceiling to reach cloud nine, and soon.

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The reversal of qi and what it means to the world.

Posted on August 3, 2012 by Tsun Nin Lee

The Dow Jones industrial average has advanced more than 10% since June of this year. The European Central Bank’s chief Mario Draghi promised to do whatever it takes to preserve the euro. The political leaders of France and Germany vowed to strengthen the euro zone by working closely together. So things are looking up economically, right? Yet according to my calculations based on I Ching and the Chinese almanac, the cosmic energy or qi is about to take civic a 180 degrees turn. The inflection point of this turnabout is to occur on August 7, 2012. Before that time, the cosmic qi is richly composed of the elements of fire and earth, resulting in an excess of Yang. The balance of the calendar year 2012, however, will be infused by the elements of metal and earth, which is Yin in nature. Even though the reversal of qi will be relatively abrupt, the process does require a transitional period, marked by certain telltale signs. Here are a few examples of such sentinel events:

On July 20 the movie theater massacre in Colorado is just such an event. Since darkness belongs to the domain of Yin, the killing took place around midnight in the opening night of the movie “Dark Knight Rising”. A couple of days ago, a sweeping blackout in India wreaked havoc on more than 600 million people – – another clear indicator of Yang being overwhelmed by Yin. Since electricity is Yang in nature, the power failure is a hallmark of Yin dominance. So although the full impact of the tide of Yin has not yet materialized, its ever enlarging presence is being felt.

What does this reversal of qi mean?

In the political arena, president Obama will gain an upper hand and Mitt Romney’s campaign will begin to sputter. This is because Romney was helped by the fire element during the first half of the year while Obama enjoys the metal and water elements in the second half, coasting to his reelection. In terms of weather, the drought and heat wave (Yang in nature) of the past months will be replaced by coldness and wetness in the coming months, characterized by excessive rain and snow. Agriculturally, the high prices of grain and corn will most likely drop due to this change of weather pattern. For the rest of the year, diseases of cold and wet nature will rear their ugly heads. The incidence of whooping coughs will likely escalate in the near future. Arthritis as well as many chronically painful conditions such as fibromyalgia and rheumatoid arthritis would have a tendency to exacerbate. In the financial world, the recent stock market rally will suddenly fizzle, especially during the month of August.

Most notably, from my I Ching analysis, I have noticed a rather strange phenomenon. That is, the personal fortunes of a number of the CEOs of major high-tech companies in the Silicon Valley all of a sudden will experience a downturn beginning in August, almost in a concerted manner. The list includes Intel, Apple, Google, Oracle, Yahoo, Hewlett-Packard, with the notable exception of Facebook. Microsoft, which is based in Redmond, Washington is also on the list. Does this mean an impending disaster in a scale similar to the recent flooding in Thailand or tsunami in Japan is about to strike? Could this also be part of a larger picture resulting from a global event such as the debt crisis in Spain? Anyway, any such disaster will negatively impact the global market as a whole and will lead to a selloff of stocks. The transient decline of the fortunes of the CEOs of major corporations such as Alcoa, General Electric, Ford, Boeing, Bank of America, Citi, etc. during this very same period shown on my calculations also attests to the significance and magnitude of the precipitating event.

What should we do?

  • Those of us who live in California should make adequate preparation for a major earthquake, something we ought to have done already.
  • I for one will hold off from buying stocks for now until the coast is clear. There are better opportunities down the road in just a few months. As a matter of fact, I just liquidated about 80% of my portfolio several days ago.
  • Base your projections and future plan on an Obama win.
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Turning sewer water into premium wine.

Posted on April 11, 2012 by Tsun Nin Lee

Although the title of this essay sounds like an exaggerated biblical miracle, it is meant to be merely a financial oracle. By definition, an oracle portends the future. To the economists, the abundance of foreclosed homes signifies trouble in the economy. To the general public, foreclosure is a dirty word, almost as dirty as sewer water. To the astute investors of real estate, however, the opportunity to purchase cheap real estate is like manna from heaven, or more like a liquid that will soon to be fermented into premium wine, as unwanted properties today may turn out to be highly desirable real estate in the future. 

The myopic vision of the herd.

It was herd mentality that drove the housing prices into the stratosphere before the bubble burst, as almost everyone believed the upward spiral of home value would continue indefinitely. These people were overly optimistic then. But now that home prices, having fallen so much, do not seem to make economic sense anymore,  because in many instances, owning one’s own home is actually cheaper than renting, not to mention the tax benefits of mortgage deductions. When this happens, it is not difficult to conclude that the housing market has been oversold. Cheap home prices together with inexpensive mortgages present the best home buying opportunity in decades. All indicators point to the fact that the bottom of the housing market has been or about to be reached.

For many potential home purchasers, there seems to be no urgency in buying a home now, since home prices have remained depressed and mortgage rates stable. In the past, many homebuyers, led by herd instinct and in their myopic vision, failed to discern the soon to happen bust. Ironically, this same myopia once again has impaired their vision of the coming housing boom in the near future.

Housing market on the rebound.

There are already plenty of telltale signs about the bottoming out of the real estate market: the dwindling of inventory of homes in certain communities such as Miami, the slowing of the price decline, the decrease in unemployment rates are but a few. Predictably, as soon as home prices or mortgage rates begin to move up, which should happen within the next 12 months, the herd will suddenly decide to join the party and the momentum in home buying will self-perpetuate.

Transforming sewer water into premium wine.

Bank owned properties, currently viewed as being toxic on the normal banking activities, will begin to appreciate in value when the housing market turns around. Such undesirable assets will soon become coveted properties, and will markedly strengthen the banks’ balance sheets. And substantial profits will be realized when these properties are eventually sold. Yesterday’s bad stuff is actually tomorrow’s good stuff. That is what I mean by turning sewer water into premium wine.

How I plan to maximize gain in the coming bull market.

Investing in real estate such as buying single-family homes as suggested by Warren Buffett may not be everyone’s cup of tea. This is especially true for the baby boomers who want to enjoy the golden years without the hassles of being a landlord. Since many of the big banks are already owners of single-family homes and their stock prices have remained depressed below their book values, so why not own the bank stocks instead. Stock analysts generally recommend owning stocks of stronger banks such as J.P. Morgan and Wells Fargo. Personally I prefer slightly troubled banks such as Bank of America and Citigroup. E*TRADE is another sleeper because it too has been burdened by a large number of borderline mortgages. My reasoning is rather straightforward: when the good becomes better, the percentage of gain may be in the double digits, but when the bad becomes good, the gain are likely to be in the triple digits. Such potential gains, though phenomenal, may actually be achieved within the time horizon of only a couple of years.

The above analysis is based on the assumption that the global economy will be gathering steam very soon and shall remain robust at least through the end of 2014. This assumption is more in line with the prediction predicated on the I Ching analysis I have performed. When the moment comes, I hope to be able to introduce some of these valuable concepts in future blogs.

Today the Dow Jones Industrial index has dropped another 214 points at the heels of yesterday’s loss of 131 points. In fact the index has plummeted for five consecutive sessions for a total of 549 points. Many pundits have now cast serious doubts on the economic recovery. But I stand pat on my prediction that the market will accelerate upward during the months of May June and July this year, as I have outlined in my blog posted on February 15, 2012.

For reference, the closing stock prices on Tuesday, April 10, 2012 are as follows:

Citigroup                               C             32.86

Bank of America   BAC        8.54

E*TRADE Financial               ET FC      10.05

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Bankers are getting smarter.

Posted on April 11, 2012 by Tsun Nin Lee

My blog posted on March 15, 2012 lamented that the lack of cerebral prowess of bankers as a group had led the banking industry astray, resulting in a financial meltdown, causing misery all around. Worse, they are completely oblivious to the current opportunity that potentially will make them a very handsome profit within just a matter of a few years. Specifically, I am talking about the portfolio of foreclosed homes on the books of many banks.

Investors, both foreign and domestic, are buying up foreclosed properties at bargain basement prices. Many of the large banks such as Citigroup and Bank of America actually own a great number of such properties. Unlike these investors, banks do not need to go out into the marketplace to acquire the foreclosed properties because they already own them. So why can’t the banks themselves assume the roles of savvy investors?

Coincidentally, a week or so after I posted my blog entitled “bankers ain’t that smart”, Bank of America announced that it would experiment with a pilot program to allow some home owners who are underwater in their mortgages to transfer titles to the Bank in lieu of foreclosures. In exchange Bank of America will allow the former homeowners and to remain in their homes as renters. By doing so, Bank of America will avoid the expenses involved in foreclosure proceedings as well as holding onto unoccupied homes that would sure fall into disrepairs. In addition, the bank will receive a stream of income from the former owners who will continue to maintain the properties— probably a win-win situation for all parties concerned.

So why didn’t bankers think of that before? As I have been saying all along, bankers ain’t that smart. Fortunately, for the sake of the economy, at least some of the bankers are getting smarter, albeit slowly. That is why instead of adopting this strategy across the board, Bank of America is only testing the waters in small-scale with this pilot project. What the large banks should really be doing is to hire real estate professionals to manage the multitude of foreclosed homes, rent them out, hold them for appreciation and eventually sell them for hefty profits. This strategy especially makes good sense in the current environment where rents have skyrocketed.

Will the banks’ CEOs have the intellectual wherewithal to take advantage of this unusual opportunity? We shall wait and see.

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Mitt Romney, Is He Lucky or Not so Lucky?

Posted on March 23, 2012 by Tsun Nin Lee

Win the battle, lose the war. If but for winning the battle, there is no war, hence no loss of war. Sounds like an oracle? No, it is reality – – political reality.

Mitt Romney recently won the Ohio primary by a relatively narrow margin. Perhaps he thinks luck is on his side. In fact it is. Based on my I Ching deductions, Romney’s Lucky Star has been rising and will peak around mid-summer. His campaign will culminate in his nomination by the Republican Party to be the presidential candidate. From August on however, his political fortune will begin to wane and he will struggle to regain momentum until Election Day in November, when his hope to become the president of the United States will be dashed. He will be feeling rather unlucky then.

Even though he has been lucky enough to have won crucial battles in the primaries, Romney will lose the war on contending for the presidency. He will surely be exhausted by the end of this long and arduous campaign. But in some peculiar way, he will actually feel relieved even after he loses the election. Without the initial good luck of winning his party’s nomination, he will not have the bad luck of losing the election.

Perhaps an old Chinese fable best sums up the subtle, often unforeseen relationship between good fortune and bad. Here goes the story.

A rancher lost his fine stallion one day and felt he was extremely unlucky. But in a matter of days, his horse returned, bringing with it an entire herd. Then he thought he was the luckiest man in the world. A few years later, bad luck befell his family when his only son became crippled in a riding accident. Soon after that, war was raging in the country and most young men in his community died in fierce battles. Fortunately, the rancher’s son survived because he was able to avoid conscription, due to his physical disabilities.

Good luck and bad luck often work in mysterious ways.

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Bankers Ain’t That Smart

Posted on March 15, 2012 by Tsun Nin Lee

The reasons for my saying that bankers as a group are not too smart are threefold. First, they created the mess they are now in. Second, they have allowed themselves to remain stuck unnecessarily in this same mess for a protracted period of time. And third, they have failed to take advantage of the mess when it is time to do so. Let me explain.

1. Creating the mess:

Had bankers been smart, they would not have jumped into the direct path of the financial tsunami they helped create in the first place.

In 2007 and 2008 the interest rates of one-year CDs were somewhere between 4% and 5%, while the interest rates of credit cards often exceeded 20%. Is it possible the credit card holders’ willingness to pay these exorbitant interest rates are a hallmark of financial discipline? Yet numerous consumers maintained a high level of credit card debt. Enjoy now, pay later. Perhaps that is the American way. While the banks were enjoying the lucrative business of credit card lending, they should have realized that many of these very same customers were also buying homes with variable rate mortgages that began with low teaser rates to qualify the borrowers. But when the real interest rate would be kicking in a few years down the road, it would be extremely difficult for them to keep up with the mortgage payments. If they ever lost their jobs, they would be in dire straits. Immediately prior to the bursting of the housing bubble, banks were willing to underwrite mortgages to virtually anyone who could breathe. That’s how they got into this mess in the first place.

2.  Remaining stuck in the mess:

Banks not only created their own mess, but also have allowed themselves to be mired in it for much longer than necessary. It was perfectly reasonable to tighten the lending criteria when the home prices were dropping precipitously. But recently prices have been dropping very slowly, signifying the bottom is near, the banks should relax their lending standards to underwrite more mortgages, because at this juncture the risk has been drastically reduced, especially when the lenders are requiring a 20% down payment in home purchases. The value of a homes must further diminish by more than 20% before the lenders will experience any impairment of security in their loans. At the present time, this scenario is highly unlikely. The banks’ overly stringent requirements for making loans has deterred many otherwise qualified borrowers from purchasing homes, thus preventing the home prices to stabilize. This lending inertia is actually the cause for the depression of home prices, leading to more home foreclosures, perpetuating the downward spiral of home values.

3. Failing to take advantage of the mess:

Earlier this month Warren Buffett announced to the world that he was interested in buying up foreclosed single-family homes in bulk, renting them out and holding them for long-term appreciation. He further opined that such an investment might even garner a better return than investments in stocks. If the CEOs of banks were half as smart as Buffett – that is a bit too much to expect perhaps – he would not stand a chance of acquiring the foreclosed homes. Why? The banks are already in possession of a great number of undervalued properties, so why can’t they follow Warren’s game plan, rent them out to generate cash flow, hold them for appreciation and liquidate them when the time is right, instead of selling them now?  But will the banks do that? Most likely not. Bankers as a group are not known for their brilliance, although when it comes to charging all sorts of fees such as late fees, transfer fees and administration fees, they can get plenty creative.

If bankers were smart, they would heed the advice of Warren Buffett and treat the foreclosed properties on the books as valuable assets to be retained, rather than liabilities to be rid of. They would hire real estate professionals to refurbish these properties and rent them out to generate cash flow, as renting is on the rise nationally, instead of selling them to private investment groups which would follow Buffett’s game plan. In my blog entitled healing the American economy with Chinese medicine posted in January of this year, I proposed the government should be the one to purchase the foreclosed homes in bulk. The foreclosed homes are such bargains now that the acquisition of them is truly an investment opportunity, which has been sadly overlooked by cash-rich investors and corporations alike.

If penicillin can be made from molded bread and biofuel can be generated from manure, substantial profits can certainly be achieved by buying foreclosed homes. These bank-owned properties that look like liabilities today will turn out to be valuable assets tomorrow. The future stock prices of banks will rapidly escalate by virtue of such holdings. Hopefully by now they can see their way clear to at least take advantage of the very mess they created.

I am keeping my fingers crossed because bankers ain’t that smart.

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Obama versus Romney, Who is going to win?

Posted on March 4, 2012 by Tsun Nin Lee

I predicted in my blog posted on February 15, 2012, the reelection of President Obama. So, why the above title?  Answer:   I just want to fill in some of the details of the 2012 presidential race. The title obviously implies that Romney will be nominated by the Republicans to be the presidential candidate. How is this conclusion reached?

It is now only two days before March 6, Super Tuesday, an important milestone in assessing the relative strengths of the individual candidates which include Romney, Gingrich, Santorum and Paul. According to their life charts, Romney’s energy will peak, while the energy of Santorum and Gingrich will drop on Super Tuesday. I have not calculated the energy level of Ron Paul, as I believe he has no chance of being nominated anyway, based on common sense alone. Following the election results of Super Tuesday, Romney will clearly emerge as the Republican Party’s favorite to win the nomination. In the next few months, his vital energy will continue to rise, allowing him to eventually clinch his party’s nomination. Afterwards, he will be surfing a wave of popularity.

In the beginning of August, however, the cosmic energy will suddenly turn against him and this unfavorable trend will not let up until after Election Day in early November when President Obama will be reelected with a comfortable margin. Romney’s economy card is one of his strengths, but it will be rendered impotent by this summer, when the US economy will have already turned around or shown clear signs of steady recovery, making Obama eminently re-electable (please refer to my blog on February 15, 2012 entitled Dow Jones industrial to reach 14,000 by July 31, 2012 continued).

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Yahoo’s Jerry Yang and Alibaba’s Jack Ma: what are they up to?

Posted on February 28, 2012 by Tsun Nin Lee

In my debut blog, posted January 24, 2012, I expressed my opinion that important events were in the offing, based on the sudden resignation of Jerry Yang from the Yahoo board. Shortly thereafter came the announcement that Alibaba of China was intent on buying back Yahoo’s stake, along with the Internet giant’s shares in Yahoo Japan. If this deal is successful, it will give Yahoo billions in cash, thereby enhancing its market value and causing the stock price to soar. Unfortunately, the negotiation ran into a snag because Yahoo could not get terms that allowed it to take the profit tax-free.

The story did not end there, however. In a matter of days after the apparent deadlock in the Alibaba/Yahoo deal, Jack Ma—CEO of Alibaba—made a move to take his Internet company private by offering a substantial premium over the then-prevailing market price. This offer allegedly stemmed from his desire to operate his company without the restrictions normally imposed on public entities. The real reason, of course, is that he wanted to pick up the stock on the cheap.

According to my past observations, whenever a company goes public its value instantly magnifies, creating fabulous wealth for its founders. On the other hand, whenever a company goes private its intrinsic value is generally much greater than that reflected in the stock price—which gives the ultimate owner a windfall.

Apparently Jack Ma wants to run Alibaba the ways he sees fit, and privatization would give him control of the company. The price tag per share of Yahoo’s 40 percent stake in Alibaba—as valued in the recent Alibaba/Yahoo negotiation—must have been significantly higher than what Jack Ma offered to take his company private. Therefore Alibaba should take advantage of this window of opportunity to buy back the publicly held shares right away. Afterward, the buyback from the Yahoo negotiation may resume. Taking Alibaba private will instantly increase its overall value, as determined by its intrinsic value, rather than the publicly- traded stock price. The higher equity means the company can obtain more substantial financing to fund the buyback of its stocks from Yahoo. Presumably Jack Ma’s ambition is not only limited to running a Chinese Internet company, but also includes expanding his influence globally by acquiring a company such as Yahoo.

Now the big question: how do I personally benefit from these analyses? If I had purchased a substantial amount of Alibaba stock right after the announcement of Jerry Yang’s resignation, I would have made a very handsome profit (please refer to my debut blog from January 24, 2012 entitled “How I plan to profit from Jerry Yang’s resignation from Yahoo.”) Do current circumstances mean no more deal with regard to reshuffling ownership of Yahoo’s Asian assets? Will the price of Yahoo’s stock stagnate in the near future? Perhaps it is time to consult the I Ching Oracle, just as I did in my posts from February 6 and 15: “Dow Jones industrial to reach 14,000 by July 31, 2012” and “Dow Jones industrial to reach 14,000 by July 31, 2012 (continued).”

According to the energy charts of Jerry Yang and Jack Ma, their luck will be on the upswing in the months ahead. That is, until the beginning of August 2012, when they’ll begin a downhill trek that should last about half a year. When Jerry Yang resigned from Yahoo, his luck was actually on the rise. That’s why I believe his resignation was not forced on him, but was a deliberate strategic move on his part. He still owns a very substantial stake in Yahoo, and it’s highly unlikely that Yahoo stock prices will go down while his luck is rising. As a result, there should still be an excellent upside potential in Yahoo stock over the next few months. Perhaps Yahoo and Alibaba can strike a new deal.

After August 1, however, all bets are off.

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Dow Jones industrial to reach 14,000 by July 31, 2012 (continued)

Posted on February 15, 2012 by Tsun Nin Lee

In my last blog post on this topic a few weeks ago, I made the above prediction using a common sense approach. But like I said, such a prediction was reinforced by what I call “cosmic wisdom,” consisting of deductions based on I Ching, the ancient Chinese science of prediction.

At this point, it is too complicated to go over the intricate details of the I Ching prediction, which is based on the energy trajectories of entities such as individuals, corporations and nations, in an attempt to discern the path of energy movement.  The concept is similar to the technical analysis of the stocks charts, except that I Ching predictions are much more reliable.

How reliable is I Ching, you ask?  I have several examples. 

  • I used such techniques to accurately predict that the bottom of the stock market would occur on February 19, 2009, which was just 17 days off from the actual bottom on March 6, 2009.
  • Likewise, I predicted in 2008 that Obama would be elected to the presidency before he was nominated by the Democratic Party, even though Hillary Clinton was the front runner at the time. 
  • I also foresaw George Bush’s successful reelection amidst adverse publicity with the release of the film Fahrenheit 451.
  • Last fall, when the market was down, I anticipated the Dow Jones industrials to rise to approximately 13,000 around the Chinese New Year of the Dragon. The San Francisco Chinese New Year parade took place three days ago on February 11, and the Dow Jones index reached 12,890 on February 9, 2012.

Based on my I Ching deductions, the upward movement of the stock market looks to be the strongest in the coming months of April, May, June, and July. The economically sensitive sectors such as materials, industrials, technology, financials and consumer discretionary will benefit the most. I can foresee a big grin on the face of Secretary of Treasury Geithner and a smile so big that it stretches from ear to ear on the face of Bernanke during this period. Comes November, president Obama will coast to the reelection with ease.

All the financial pundits who had predicted a double dip recession are going to fall flat on their faces. Frankly, all along the only kind of double dipping I was worried about was how to make a bundle then and how to make another bundle again. When everyone is screaming sharks but only the dolphins’ fins are showing, it is time to go swimming. The impending bull market will probably move at a fast clip. By the time everyone thinks it is safe to go into the water, the big catches may be gone. Time and Tide wait for no one!

In my humble opinion, there are only three kinds of people in this world: those who make things happen, those who watch things happen and those who ask “what happened?” Unfortunately, too many investors will fall into the third category.

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