Excellent Article on Retirement Accounts

Best quote Ive read this year

"Worrying is a waste of time. Good and bad things happen in life, you just have to keep living and not stress over what you can't control" 

Stocks I like from midterm to long term

My favorite stocks as of now:

TSLA
AMZN
FB
AAPL
COP

Reasoning:

AMZN and FB have solid financials and high growth potential due to innovation and market share

AAPL are the leading tech innovators, great dividends and solid financials

COP is correlated with oil prices and oil will increase in price over time due to demand. It was at a very low point in the past two years. COP was in 70s at the highs

TSLA has a very high capital expenditure which is causing negative cashflows and negative earnings but the big picture is that they are spending heavily on great engineering and with this risk comes the reward. In addition, people may start switching more to electric cars due to low maintenance expenses and during periods of high oil prices. So far, TSLA is the highest quality, fastest  electric car out there, and it will keep leading in quality due to the high capital expenditures they are putting into this engineering ...which is a good reason why Im buying a car from them myself. 

My guidelines for investing in stocks

1) P/E less than 10
2) Negative Earnings only due to project expenditures... know what the projects are and what they will produce in revenue and bottom line
3) Good dividends if it is not a growth stock with P/E less than 10
4) Solid cashflows and Price/cashlow less than the industry
5) Net Present value based on dividends or casfhlows using the weighted average cost of capital as the discount rate ( WACC is depended on return of dividend ( if any), return on equity and debt cost)
6) Product itself and the market for it
7) Sales volumes
8) Inventory levels and how fast the inventory is selling
9) Economic Influence like the fed, move of dollar, GDP...etc
10) Variable and Fixed costs
11) The CEO himself and his vision
12) I avoid companies that cut costs to meet quotas,  like Banks
13) Innovation like Tesla and Apple
14) Insider Trading of execs ( I look at their activities on the stock)
15) Technical Analysis
16) Momentum

Is the Market heading to bear territory ?

Well? This is to continue my big fat market post.  The bear likes high interest rates because it grows with little leverage and no liquidity to feed growth. So the fed has the power to feed that bear or starve it. The other factor is unemployment.... Do you really know the real numbers behind that 5.5% ....does an engineer who works in a grocery store now counts as employed? ... That's another factor to consider. In addition, you got Japan, and Europe going into negative interest rates territory to battle slow growth , and their slow growth affects trades between us and them, our exports decrease affecting the GDP negatively, exports minus imports is part of the GDP equation. Last but not least, the elections, this puts pressure on stocks due to uncertainties and regime changes. So the negatives outweigh the positives but the good news is consumer confidence , which is the big part of the GDP equation, is not declining much. As I said in the last blog, all you need to do is hold your horses and concentrate on long term investments, undervalued stocks and Real Estate. 

Yen Devaluation

Since the infamous Japanese Fed went into negative interest rate territory, the easing will help devalue the currency. The currency will resume declines as further easing in  Japan is likely to push the yen to its weakest levels since at least 2008 . Luckily, I am currently looking into an ETF that can short the yen. Its ticker is "YCS". It has a low expense ratio and it has a double edge sword that moves against the yen.  Happy Investing :)

Muscle Building

Want to lift? here are the benefits:
"

• Not only does strength training increase your physical work capacity, it also improves your ability to perform activities of daily living (ADL's).  You will be able to work harder and longer with the proper weight training activities.
• It improves bone density.  One of the best ways you can control bone loss as you age is to add strength training into your workout plan.
• It promotes fat-free body mass with decreasing sarcopenia.  The lean muscle mass that we all work so hard for decreases with age.  If we don't add strength training to our routine then it will turn into fat. 
• It Increases the strength of connective tissue, muscles, and tendons. This leads to improved motor performance and decreased injury risk.
• It improves your quality of life as you gaining body confidence.  Strength training will not only make you strong, but will also help with managing your weight." (http://www.active.com/fitness/articles/5-benefits-of-weight-training)
• It is also good for your heart

Want to do Cardio?Here are the benefits:

Cardio benefits

Conclusion: Why not do both for maximum results?

Goldman Sachs came up with a list of undervalued securities and their reasoning. Check out the link below

Undervalued Stocks

Muscle building

Good instructional video on muscle building

Video Link

TSLA Stock

If you look at earnings and their financial statements, you would see a company that invested alot in their products, it is showing negative numbers because they used all their reserve to come up with the model 3. So in this case, the numbers dont define the future prospects of this company, its the quality and volume of its products. I recommend a buy for this stock due to the market share that this car is going to produce in this market. However, it is not a short term buy, I would buy shares in the retirement accounts because this stock , based on sales projections, could double in the next 5 years. Plus, I recommend you buy this car if you plan to buy a car next year, its a smart decision ;)

Tesla Model 3

So I went ahead and reserved this car. It is very economical ( high quality and low maintenance), safe, fast and environmental friendly.  Enclosed is the link :

Model 3

How big is the Universe?

Well? Mathematically, you can prove it. In the past people thought the earth was flat and you could fall off the edge.... People even thought that the speed of sound was impossible to reach.... Well, time, innovation and technology proved that wrong. I wonder if Genghis Khan, if he travelled into the future, would attack a moving car not knowing what the heck it is. My point! Anything is possible and achievable even with reaching beyond our tiny Milky Way. The question is when??

Going back to my point about the vast universe. I'm going to use a scenario, imagine that you are part of a small bacteria community in your intestine. As part of that community, you see the walls of your intestines as your universe. It is impossible to see beyond these walls, you won't be able to even comprehend the outside world, you're only a small speck  and part of a vast community living in your body unless you have constipation :) ...You are the universe of this bacteria and they depend on you for survival.   Their universe ends when you pass away. But what about you? You are a small speck of what? What is beyond the beyond? are we a speck in someone else's intestine?... Just kidding ;) . However, this makes you think .....

The big fat market

Is it controlled by the fed or fed by hype? Know your fundamentals! 
People always wonder when the market will bottom or when will it peak... Let me tell you, don't bother with all of this. Why? Because no one can predict the market short term but I can try. What I usually do is look at indicators like strength of dollar, Macro variables, consumer confidence, bond movement, inventory and sales levels of companies, consumer confidence and insider trading ( the legal way )...but all that mumbo jumbo is boring, I know believe me(well I like it). 

What you need to focus on are solid investments that can weather the storm, I usually select stocks that are undervalued and give them appropriate weights, then change them or change their weights when they become fairly valued or overvalued. The second solid investment I believe in is Real Estate....when you buy a rental, you are getting an asset free and clear since the tenant is paying for the asset instead of you. In the mean time you get income and valuation after all the expenses have been deducted, meaning you can sell the house later with a higher value than what you bought it for and make income from the rent (current Cashflow in the interim). So if you stick with these two, you will retire comfortably. I will go into more detail on what to invest in per level of risk in my later posts.... 

Ok now let's go to the major point, market expectations of 2016..... I don't see much positivism, central banks trying the negative interest rates out of desperation is not good news, China is not doing well, their GDP is declining, South America is dependent on oil and you see how this is going, the energy sector which is 30% of the stocks has been declining. There are not much good news to keep pumping the market up but don't worry, the fed is pumping it with steroids lol. Has oil bottomed? Well yes and no, there is a huge supply of oil out there and I'm not sure what Iran has in store for us since they are ramping up production...all I can say is hold onto your horses and ride this one out. Of course I will write more about this in my future posts.