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    2009-11-30

    说文解字

    新学字两个:

    籴 - 作买米解

    粜 - 作卖米解


    Rothaus Pils TANNEN ZÄPFLE

    Said to be the highest beer in Germany by the brewery's elevation.

    A balanced taste. Malty, sweet and fruity. Long lingering finish. Most important, bought at discount. only 7HKD.

    2009-11-28

    Dubai crisis - Follow up

    someone said to me, "it's sheer 59 billion. is this really that deadly?"

    yes, 59 billion is no big deal. the most important is not the absolute value, but the chain reaction and the momentum it can build.

    first, those banks, those lenders, they may well have hedged their loans by mitigating to other investors. this is basically the same mechanism as we have seen in the meltdown of subprime loans. like the real estate, we need to estimate the whole chain to see what the burst of the bubble would bring. how big is it? i don't know.

    one step further. this may cause a new round of panic. the cost of lending would rocket and the just built-up inventory would be stuck again. for many businesses, this is a critical time since they are about to get refinancing of previous loans. what they might say to themselves is, "oh, no, not right now." if this kind of mood spreads, this is the catalyst elliot wave theorists are waiting.

    2009-11-27

    A second thought on the black swan

    There is a very obscure connection among the three black swans: USD/JPY, EUR/USD, and Dubai crisis.

    In four days, USD has slumped nearly 6% against JPY. It happened before but I still feel very weird. Everyone thinks it would go down but without any catalyst, how can such a big move happen? During the process, it has taken a break for 3-4 times and then been pushed down again. Even it has hit a 14-year low, it's further sold down 200bps to 84.6.

    Meanwhile, the hike at EUR/USD is relatively mild and not impressive. There is no major force behind it. At first, I thought maybe it's because of the heterogenous patterns between the two pairs, or because of liquidity problem. I even thought this is the engine while the JPY is the follower. I later corrected this thought after seeing the bungee on USD/JPY. But after the Dubai crisis appeared, I have another possible scenario emerging in my mind.

    Is it possible the major players, i.e., banks, front-run us? They kept parking to the safe harbor at JPY. And the move at EUR/USD is just some pegging mechanism. That's why when the news comes out, we see the trend in USD/JPY continues while EUR/USD reverses. The followers get it all wrong.

    As I have said before, there is no way to predict a black swan when you are facing a competitor like the big banks. Their edge is too obvious and powerful. Your experience may help. You may have seen this black swan this time. But what if it's a different black swan next time?

    Still need to dig deep into fundamental research or refer to quantitative approaches. A long way to go, I tell myself.

    UA iSquare IMAX 3D, Dec 17

    Avatar, I'm coming..

    Carruades 2007 at 1300GBP per case

    Ridiculous. Consider selling my inventory now.

    Why we need options

    Because of black swans. There is a lot of ways to tell a trend, an entry signla, etc. But there is no way to tell a black swan if I am not a deep fundamentalist. Thus, as a necessary complement for a quantitative trader, option is the best solution.

    Dubai is down

    Not surprisingly. Many guys are going to profit handsomely from this crisis. They have been watching this "phenomenon" for a long time. That's a good part of investment, like Jesse Livermore said, bull makes money, bear makes money.

    2009-11-26

    Stop Loss

    Someone thinks stop loss is a target that defines the maximum level of loss you can tolerate on the corresponding trade. Wrong. Stop loss is nothing different from entry of a trade. It should be a dynamic signal instead of a static level which is determined at the beginning of a trade. Most important, it is closely related to the temporal consideration. Without defining temporal constraint, it's like to give your life to someone else to take care of.

    So there is no such thing called stop loss. Don't let stop loss to terminate a trade passively. Actively manage them and keep a neutral view on entry/exit.

    Headline

    USD hits 14-year new low against JPY. The black swan is still there and gets some followers.

    Time to pull my trigger right now.

    Black swan flied by and I am still alive...

    Fat stupid black swan flied by (more accurately, still here) and I, surprisingly, am still alive... Two things I keep telling myself:

    1. Always ensure I still have enough ammo to give the damn swan a final shot. So hold my fire and be swift when going under;

    2. Never fight against big guys. They can move the market but I can't. So it's nonsense if I am right in the end, but with a dead body. Wait the right time to ride on them.

    Seems contradicted? Well, not. Timing and skill are important. Time for "Are you a qualified trader" test.

    2009-11-21

    The road to Avatar

    Avatar, by James Cameron, is a movie I have put very high expectation on. After watching so many trailers, I feel Avatar is like... Starcraft. Really. If Cameron can go one step further, probably we can see Zerg, Protoss. The aliens in Avatar do look a little bit like Protoss. I hope Cameron won't stop here. Look forward to a StarCraft series that can match Lord of Rings.

    2009-11-18

    Is NFA helping you to survive?

    Just receive an email from one of my forex brokers, said in compliance with the new NFA regulation, they are not able to provide the 100:1+ leverage ratio anymore. This email has stirred my thought on this issue.

    The extremely high leverage ratio remains to be a peculiarity that is often misunderstood by novice traders. Their math is easy. Say CNY has appreciated 20% against USD in a year. So if they take full advantage of the leverage, they would have 2,000% return.

    This is not the way things are. Extremely high leverage ratio, by no means, is aiming at long term investment. Rather, its primary benefit, is to provide investors to take advantage of noise of the forex market, in the presence of its liquidity. For the brokers, this is good because they can both eat the bid-ask spread and enjoy a decent interest from short-term lending. But if it's interpreted in the wrong way, the outcome could be disastrous. If you ask any experienced forex traders, they would say high leverage ratio accelerates you to hell, not to heaven. Personally, I never trade at full capacity. I believe what Bill Lipschutz said, the most important thing, is to stay in the game.

    So yes, it's well acknowledged that high leverage ratio is no good for premature investors. But is NFA's action making a point out of this? I don't think so. Firstly, the big fishes in the forex pond, I believe, still have access to formidable financing power. So the new regulation doesn't make the pond a more peaceful world, rather, it gives a hard time to small fishes like me. It potentially reduces the capital that small investors are exposed to and enlarges the gap between big and small fishes. It's really a bureaucratic decision in my view.

    Everyone knows nuclear weapon is no good. But like what game theorists say, the equilibrium is still achieved by those nuclear countries if they foresee the disastrous outcome. It's the same logic that applies to the forex leverage ratio. And now, NFA is artificially changing the rules of the game and naively thinks they are protecting the small investors. It's ridiculous.

    2009-11-17

    平凡的世界

    今天偶然听到中央人民广播电台重新录制了路遥的平凡的世界,播讲者仍然是李野默。

    我听得最早的是80年代的版本,距今已经20多年,当年播讲的时候是路遥边写中央广播电台边播。

    或许新改的播讲稿更好的反映了原作的韵味,或许李野默觉得自己现在的阅历能更好的表达这部著作,也或许是我有了太固执的先入为主,总感觉新的版本缺少了一种东西,李野默现在成熟技巧性更强的声音反而无法和平凡的世界这部更多的是依靠一种内在情感的作品融合在一起。或许李野默现在更适合去表达那些很热门的反腐题材作品,而失去了表述平凡的世界的那种心境。

    这种缺憾美是一代人的记忆,正如当年朱时茂,丛珊的牧马人,陈道明,英达的围城,王扶林的红楼梦,夏雨的阳光灿烂的日子,都是无法再复制的作品。

    2009-11-06

    Napa classification

    i think it's coming out sooner or later. and finally a finnish wine magazine takes the job:


    here are a few factors they list in their consideration of the classification: quality, price, winemaking philosophy, history, terroir. and they have a minimum 15 years history of producing wines to qualify a winery.

    they do their homework i think. all in the list are well known names. and their classification may also be justified by each vintage's scores and market prices. but is such a classification really meaningful?

    US is a more dynamic place than France or Italy. Though people may acknowledge Napa, Sonoma, etc, produce some of the best wines in the world, there are still too much uncertainty out there. Of course, here, uncertainty is a good thing. US has much more potential than the old world and we are probably going to see more and more successful stories like screaming eagle, harlan estate, etc. Like Terroir only accounts for 20% in their evaluation (i have no idea how they do that), this is usually regarded as the single most important thing that determines the character of a wine. Besides, from statistical angle, many factors are correlated. The factor list is somewhat biased.

    Second, is such a list really helpful? I think at current stage, the effect is limited. US wines seem to be extremely polarized. Those cult wines can fetch price even higher than Bordeaux first growth while those jug wines are selling at price lower than grape juice. The classification seems to tell us something that is already well known rather than providing any guidance. If there is something I would like to know, I think it's some guidance on the prospect or evaluation of the rising stars.

    I think a classification of US wines is like to score the hedge funds. It's fine but pretty much nonsense. See LTCM? But anyway, though there is a long way ahead, no doubt US wines are gaining ground now. I will keep an eye on those cult wines, especially my favorite ones from Bill Harlan.

    2009-11-05

    My Forex trading P/L

    For the past 4 months, my forex trading performance:

    USD account: 40%
    EUR account: 18%

    Given EUR account had once a drawdown of 30%, I am glad I can make it back.

    The number of trades:

    USD account: 140
    EUR account: 170

    It has become a daily fun. Though I no longer make hundreds of trades a day and double in two days, I have less possibility to blow up as well. Lucky for me.

    very interesting cyclic pattern

    happen to see a stat called google domestic trend. it's basically an index tracking ppl's interest in certain topics by calculating the number of related queries. interestingly, you can find a very obvious cyclic pattern for most of the trends it tracks. generally, the pattern is repeated annually and will have a peak at some specific time during a year. and most have their peaks around year end.

    Automotive:

    Luxury goods:

    Another single-letter ticker stock

    Hyatt is said to plan its IPO now. Will trade under ticker "H".

    Pritzker family, the one who name the most prestigious award in architecture, said to own 85% stake.

    2009-11-04

    US cult wines

    Till now, I have only tried two US cult wines. 2005 Quilceda Creek Cab. and 1996 Harlan Estate. Both are terrific. I am sure US produces some of the best wines in the world nowadays. And among them, I am especially interested in Bill Harlan's wines.

    The most known flagship wine, Harlan Estate, is among the most sought after and pricey. And even its second wine, Harlan the Maiden, can match the price of Carruades de Lafite or Les Forts de Latour, maybe even higher. Of course, this is fair given Maiden often gets the same high scores as those Bordeaux first growth while Carruades only keeps its premium because of huge Chinese demand.

    Another rising star from Bill Harlan is the Bond series. Currently, there are five sub-labels: St Eden, Melbury, Vecina, Pluribus and Quella. Each is produced by some top located single-vineyard. And since birth, the wines have kept the consistent high quality. Their prices are now only a little higher than the Maiden.

    I don't know where the name "Bond" comes from. But probably this means the project is long-time and will pay off decently as time goes. Indeed, a good wine is like a zero coupon bond. After a decade or so, it can bring you the joy nothing else can parallel.

    Long some "Bond" if you can.