关关雎鸠 在河之洲 [求鱼]

昨天朋友们在一家小馆边吃晚饭边聊天
大家谈天说地
什么都说
其中一个话题是关于男女恋爱
说到法律与爱情的关系

这让我想到中国最古老的的诗经上的两句
关关雎鸠 在河之洲
窈窕淑女 君子好逑

我今天早上醒来觉得上两句其实应该是这样的
关关雎鸠 在河之洲 求鱼
窈窕淑女 君子好逑

因为现代人已经忘记了
我们的祖先是以打鱼狩猎为生的
关关雎鸠 在河之洲 求鱼
是尽人皆知的
所以就把求鱼省略了

所以这两句是说
鸟求鱼
男找女

这样天人就合一了

2008 EAGL Card Program for $99

Beginning Mid-November, visit our kiosk in the Vista Ridge Mall in Lewisville, TX from now until the New Year and when you purchase your 2008 EAGL card you will receive 9 Free rounds of Golf with Cart with no restrictions!

I round at each of these facilities: Castle Hills (Lewsville), Fossil Creek (Forth Worth), Indian Creek (Carrollton), Iron Horse (North Richland Hills), Lake Park (Lewsville), Mansfield, Plantation (Frisco), Riverside (Grand Prairie) & West Ridge (McKinney). All these golf courses are located around the DFW Metropolitan Area.

This is the best deal for the year. More information can obtained at its web site. http://www.eaglgolf.com/

After knowing the ads, Zhen and I went to Vista Ridge Mall at Lewisville and each bought one card for the 2008 membership. Zhen's idea is that we can combine our golf games with family activities. I guess we have to find out how these golf courses are compared with the courses we have already played.

01/11/2008. Almost every Chinese golfers here I know bought at one cards. Some golfers may have bought three or more cards.

Diversification Benefits of Value Investing

Every stock investor knows the basic principle of buying low and selling high. Recently I am thinking this value approach to stock investing actually have a diversification benefits. I can not theoretically approve my hypothesis. However, I have the following reasoning.

Since most of my investments are done via mutual funds, closed-end funds, or exchange-traded funds, so my reasoning is based on the trading of funds, especially the sector funds and specialty funds.

Recently, the US stock market is very volatile. Some sectors or industries like the financial sector and the homebuilding industry have suffered much more than other sectors/industries.

Let’s take the homebuilding industry as an example. Since the summer of 2005, the homebuilding industry has been declining while the overall market is moving upward. Toll Brothers is falling from the high $50s per share to the low $20s per share during the period from July 2005 till now. During this period the SPY has risen from $120s per share to around $145 per share.

This divergence between the homebuilding industry and the overall market represented by SPY gives the value investors a dynamic diversification benefits if the value investors are adding shares in funds or companies related to the homebuilding industry. Over time this divergence will diminish when the homebuilding industry are aligned with the overall market.

If the value investors always invest this way, they can build very dynamically diversified investment portfolios.

If we consider the buying low and selling high as a temporal diversification strategy for portfolio management, then value investing can be treated as a spatial diversification strategy. This pair of temporal and spatial diversification strategies can complement each to form a time-space consistent investment strategy.

Vanguard Managed Payout Funds

Recently the Fidelity Investments introduced a new class of mutual funds: Fidelity Income Replacement Funds. These funds are intentionally designed for retirees who will need a fairly stable income stream. Previously this kind of income producing products is in the forms of CDs provided by banks or annuity provided by insurance companies. Now mutual fund families are offering competitive products in this category.

Vanguard is going to offer three managed payout funds. These funds will become available around the end of the year. Personally I believe this set of funds will be very popular among people who seek consistent returns over long periods of time.

Managed Payout Real Growth Fund is designed for investors who seek a modest initial current payout, and wish to see their capital and payouts grow in real terms (inflation-adjusted) over time. This fund is expected to sustain a managed distribution policy with a 3% annual distribution rate.

Managed Payout Moderate Growth Fund is structured for investors who want to balance their initial payout stream with maintaining the purchasing power of their future payouts and capital. This fund is expected to sustain a managed distribution policy with a 5% annual distribution rate.

Managed Payout Capital Preservation Fund is geared toward investors who seek a higher payout level to satisfy current spending needs while preserving their capital over the long term. This fund is expected to sustain a managed distribution policy with a 7% annual distribution rate.

In the next three months, Vanguard is also going to introduce three Mega-Cap index funds. They might be a very interesting way to take the advantage of the globalization impacts since mega-cap companies are equivalent to multinational corporations.

I may consider adding these funds when they are available later this year.

57 years of S&P 500

I was studying the trend line of SP-500 for the entire record period. I drew a straight line (in logarithmic scale) between the starting point and the end point of the time series. The straight line has an average return of 8%. Then I take the difference between the actual data line and the straight line I drew with some modification to preserve the first and second order statistical moments such as the average and standard deviation. So there are three lines in the above figure.

The blue line is to show the actual closing price of the SP-500 index. The green line is the straight line I drew. The red-line at the bottom of the figure is the modified difference between the actual data line and the straight line.

It is reasonable to assume the red-line has stable statistical properties such as the mean and standard deviation. Based on the modified data, the average is 111.55, the standard deviation is 33.696, and the coefficient of variation is 0.30207.

It is so easy to identify the peak of the market after the data is extended almost seven years beyond 2000. Now we can see a perfect head and shoulders with the head-top around 2000. Should we have another head and shoulders coming soon?

Another feature is the closeness of the blue-line and the green-line for the last five years. This closeness is an indication of reduced volatility of the market. I believe that the fast growth of the hedge funds might be one of the major contributors of this closeness.

It would be very interesting if some investors/traders can take the advantage of the clear cycles in red-line. We are pondering this question with the following question. What is the optimal way to take the advantage of the bounded variations/volatilities of the red-line?

1 year of golf

Basically, I have played so much golf so that I did not have enough time to keep my blog going. I hope to have a fair amount of time to write down my thoughts about investments and the game of golf.

By now I have played golf for one year. Over the last twelve months, I have struggled to learn this difficult game. Many friends have helped me over the year in various aspects of my game. Below is the summary of my golf game.

I took my first lesson from Zhen when he brought me to the Chase Oak Golf Course driving range. I bought two clubs at the beginning. Later I bought a whole set from Costco. At the same time, we joint the Ridgeview Golf Club. Since we joined the club, we have played together almost every weekend. Zhen has the most influence in my golf game.

I had taken formal lessens from Heath, a golf professional worked at the Ridgeview Golf club. Recently he moved to work at the Frisco Lake Golf club. He taught me all the basic steps in golf game.

I had also taken Beginner’s Golf at the local community college for one semester. The coach in the class had tried very hard to teach the golf game. I played with several classmates at the Plantation Golf Course.

I have practiced in the driving range and golf courses with many friends. Some of them are Kan, Brian, Guangyan, Lihong, Xiehong, Laozai, Andy, Xiaomin, Francis, Jerry, Norm, and Clark. I have practiced and played a few times with many other friends. Golf is indeed a game of friendship. One possible origin of the word Golf is derived from - the game of loyal friendship.

Basically my game has improved from 144 (I was told this is the possible highest scores) to around 88 over this period as shown in the above figure.

My goal for the next year is to break 80 and to average around low 80s. I am also plannning to take the Intermediate Golf class at the local college in the Spring semester.

Will GA be an American or Chinese company?

Suppose there exists one American company called GA (something like General American Company). Before 1991, most of GA’s production and sales are taken place in the United States of America. Since 1991, GA has expanded into China over the last sixteen years. Its production and sales about evenly distributed in the two countries: China and USA.

Let’s expect GA’s growth rate in USA in the 10% range while its growth rate in China in the 20% range. It is expect that in some future time, GA’s production and sales are mostly taken place in China.

Now the question arises when people in China ask GA to move its headquarters from USA to China. If GA does not make such a move, China will take necessary steps to penalize GA.

Let’s suppose that the USA does not like such a move. The USA’s argument is that GA has always been an American company. So GA should not make such a move. Otherwise, the USA will take necessary steps to penalize GA.

What GA should do in this case? Will it split itself into two separate entities? Or a new corporate structure will emerge? Like dual-citizenship, can a corporation take dual corporate citizenship as well?

Globalization will have challenge questions for corporation to solve over the coming decades. Will politics or economics determine the final solutions?

Over the last several years, the US stock markets have done very poorly relative to the international markets, especially the emerging markets. I am thinking if there are delayed impacts of globalization for American companies.

Supposedly the American companies have the necessary capital and resources to compete with other international companies in the global market. Why don’t these benefits show up in their books?

One possible reason is that these American companies have heavy initial investments which need many years before they can show up in there books. How long is the delaying period if there are such delaying impacts?

If there are no such delayed impacts of globalization, then why American companies bother to move its production bases to China or its service enters to India?

I resort to believe that there is a delaying period for American companies to harvest the globalization benefits.