Commodity Futures

  1. Trading Mechanism

Long position:
Commits to purchasing the commodity on the delivery date

Short Position:
Commits to delivering the commodity on the delivery date

A contract is never really bought or sold like a stock or bond; it is enterred into by mutual aggrement. At the time the contract is enterred into, no money changes hands.

The clearing house functions as the trader counter-party.

Trump Says Tariffs on Chinese Goods Will Stay for ‘Substantial Period of Time’

WASHINGTON—With the U.S. and China preparing for a fresh round of face-to-face negotiations, President Trump said the U.S. expected to keep tariffs on Chinese goods in place for a “substantial period of time,” even after a deal.

“We have to make sure that if we do the deal with China that China lives by the deal,“ Mr. Trump told reporters as he left Washington for Ohio. Administration officials have talked of removing tariffs in stages, as Beijing shows that it has carried out parts of a deal—and reimposing them if China later backtracks.

The details of a tariff rollback are the subject of ongoing negotiations, as are questions about enforcement, technology transfer, cross-border data flows and other issues. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are planning to fly to Beijing for talks next week with Chinese Vice Premier Liu He. The two sides hope to wrap up a deal by the end of April.

Mr. Trump said “top representatives” are flying to Beijing for negotiations. Messrs. Lighthizer and Mnuchin are expect to hold their Beijing talks late next week.

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The president didn’t explain whether the U.S. is pressing to keep in place tariffs on all the $250 billion of Chinese goods the U.S. has hit with levies, or some portion of them, nor did he indicate for how long.

U.S. negotiators have divided the tariffs into two kinds. They are more willing to roll back at least some of the 10% tariffs on $200 billion of Chinese goods, which took effect in September as the U.S. tried to put more pressure on China.

But they are resisting removing the 25% on $50 billion of Chinese goods levied, in two stages, in July and August. Those tariffs were meant to compensate the U.S. for what the White House calculated was the harm to U.S. companies caused by China’s forced technology transfers.

Still, they must convince Beijing to go along in order to strike a deal that ends the yearlong trade battle that has shaken global markets. Beijing has plenty of ammunition it can use to get the U.S. to roll back tariffs more quickly. It has retaliated with tariffs on $110 billion of U.S. goods, about 90% of U.S. exports to China, and could refuse to lift those levies until the U.S. does the same. Chinese tariffs have especially hurt rural farmland areas that are a core part of Mr. Trump’s constituency.

A spokesman for the Chinese embassy in Washington didn’t immediately respond to requests for comment.

As part of any enforcement plan, the U.S. is also asking China for another important concession—that it agree not to retaliate against U.S. tariffs reimposed for at least some violations of a trade pact. “If we designate that they are not in compliance, we will resort to tariffs in a proportionate way and the Chinese have agreed not to retaliate,” National Economic Council Director Larry Kudlow said earlier this week on C-SPAN.

But others tracking the talks closely say Beijing hasn’t yet agreed that concession. In Beijing, a no-retaliation clause could be criticized as an “unequal treaty of the sort imposed by Western powers in the 19th century,” Vice Commerce Minister Wang Shouwen said earlier this month. Any enforcement mechanism must be fair, equal and reciprocal.

Despite all the unresolved issues, Mr. Trump said the talks were “coming along nicely.”

U.S. Security Market Trading Note

  1. Tick
    The minimum price change that can be placed in order. (A tick is a measure of the minimum upward or downward movement in the price of a security)

Uptick: A transaction that occurs at a higher price than the previous transaction
Downtick: A transaction that occurs at a lower price than the previous transaction
Uptick Volume: Uptick volume refers to the volume of shares traded while a stock price is rising.

  1. Uptick Rule
    Securities and Exchange Act of 1934, Rule 10a-1. A short sell order should be placed at a higher price than the previous trade in the market.

  2. SEC Alternative Uptick Rule (Rule 201)
    When the price of a security drop more than 10% in a day, short selling is only allowed when the price of the order is higher than the current best bid.

  3. SIC
    Industry Classification Code

Ray-Dalio-Principles-Life-and-Work读书笔记

Ray Dalio's Investing Philosophy

It seems that Ray Dalio doesnot base his trading decision on the under or overvaluation of financial assets, he instead traded based on the prediction of future price movement. The attribute price movement not unpon the traditional market supply and demand theory, but more practically, transactions. By research deeply into the forces behind market movements based on historical data and the mechanism of economic world, Dalio was able to make bettings that have consistent returns.

Ray Dalio's success demenstrates the difference between stock market and the derivative market. From a value investing's perspective, Ray Dalio is more of a speculator than an investor.

U.S., China Close In on Trade Deal

China and the U.S. are in the final stage of completing a trade deal, with Beijing offering to lower tariffs and other restrictions on American farm, chemical, auto and other products and Washington considering removing most, if not all, sanctions levied against Chinese products since last year.

The agreement is taking shape following February’s talks in Washington, people briefed on the matter on both sides said. They cautioned that hurdles remain, and each side faces possible resistance at home that the terms are too favorable to the other side.

Despite the remaining hurdles, the talks have progressed to the extent that a formal agreement could be reached at a summit between President Trump and Chinese President Xi Jinping, probably around March 27, after Mr. Xi finishes a trip to Italy and France, individuals with knowledge of the plans said.

As part of a deal, China is pledging to help level the playing field, including speeding up the timetable for removing foreign-ownership limitations on car ventures and reducing tariffs on imported vehicles to below the current auto tariff of 15%.

Beijing would also step up purchases of U.S. goods—a tactic designed to appeal to President Trump, who campaigned on closing the bilateral trade deficit with China. One of the sweeteners would be an $18 billion natural-gas purchase from Cheniere Energy Inc., people familiar with the transaction said.

U.S. Trade Representative Robert Lighthizer, said the U.S. could impose more tariffs on Chinese goods if a proposed adjudication system for trade disputes fails to produce results.
U.S. Trade Representative Robert Lighthizer, said the U.S. could impose more tariffs on Chinese goods if a proposed adjudication system for trade disputes fails to produce results. PHOTO: ANNA MONEYMAKER/BLOOMBERG NEWS
The two sides continue to negotiate over issues involving Chinese industrial policy the U.S. argues gives Chinese domestic firms an advantage, especially state-owned enterprises. Last week, U.S. Trade Representative Robert Lighthizer said the provisions involving protecting intellectual property total nearly 30 pages out of a working document of more than 100 pages.

U.S. and Chinese negotiators are also working on setting up a mechanism through which complaints by U.S. companies could be addressed. The plan under discussion calls for bilateral meetings of officials from both countries to adjudicate disputes. If those talks don’t produce agreement, Mr. Lighthizer has said, the U.S. could impose tariffs.

Others involved in the talks said the U.S. is pressing Beijing to agree not to retaliate—at least in some cases—if the U.S. levies sanctions. That would be a big concession for Beijing negotiators, who say they want to make sure the deal doesn’t turn out to be an unequal treaty for China of the sort imposed by Western powers in the 19th century.

Even so, China hawks in the U.S. are concerned that enforcement measures may not be strong enough and will tie down the U.S. in endless talks.

“The whole process is a fraud,” said Derek Scissors, a China expert at the American Enterprise Institute, who argues the U.S. could better enforce its will by taking unilateral actions rather than getting hooked into consultations. Former White House strategist Steve Bannon urged the administration to increase tariffs to pressure China to agree to tougher terms even if that meant lengthier negotiations and market uncertainty.

RELATED COVERAGE
U.S. Drops Threat of 25% Tariffs on Chinese Goods (Feb. 27)
Trump, Xi Face Pressure at Home Over Trade (Feb. 20)
The Outlook: Why Trump’s Effort to Narrow the Trade Gap Has Flopped So Far
“For Trump to get the structural reforms he wants and the country needs could take the rest of 2019 to negotiate,” Mr. Bannon said.

It isn’t yet clear whether conservative U.S. media, which has Mr. Trump’s ear, will pick up the criticism.

For the Chinese, linking the Florida visit to Mr. Xi’s European trip is a way to blunt the impression that he is traveling directly to Mr. Trump’s estate to make concessions.

In recent weeks, Mr. Xi has summoned senior officials from across China to warn them about “major risks” to the world’s No. 2 economy, and his administration issued new party directives demanding “unity and concerted action.”

A test of Mr. Xi’s authority will unfold over the next two weeks, when roughly 3,000 lawmakers gather in Beijing to review the government’s economic blueprint for the year.

One wild card in the U.S.-China negotiations is the impact of Mr. Trump’s failed summit in Vietnam with North Korean leader Kim Jong Un. U.S. officials said they hope Mr. Xi learns from that episode that Mr. Trump would reject an offer he considers inadequate. But they fear Beijing might take the opposite lesson: that Mr. Trump is desperate for a win.

“His failure to get a deal in Vietnam increases the pressure on him to get a deal with the Chinese,” said Fred Bergsten, founder of the Institute for International Economics in Washington.

Both sides also recognize the need to win domestic support. Chinese Vice Premier Liu He, the lead negotiator for Mr. Xi, has been holding meetings with various ministries and agencies to build consensus within a bureaucracy that is anything but monolithic.

Mr. Lighthizer, meanwhile, plans to go to Michigan this week to talk to the United Auto Workers. He told Congress last week that he has tried to incorporate specific requests from labor, business, farmers and lawmakers in a deal.

Any deal is likely to be welcome by markets, which have risen on the news that chances of an end to the trade battle were increasing. But given the administration’s heated rhetoric on China—Mr. Lighthizer last week said he considered Beijing an existential challenge to the U.S.—the provisions are already being criticized as inadequate, especially measures to remake Chinese industrial policies.

In a move that would bolster administration’s claims of the benefits of a deal, China’s state-owned China Petroleum & Chemical Corp., known as Sinopec, would agree to buy $18 billion of liquefied natural gas from Cheniere, people familiar with the transaction said.

Cheniere would start delivering LNG to the Chinese counterpart as soon as 2023. Chinese banks could provide financing as part of the deal in the range of $3 billion to build additional facilities to meet the demand. The deal is still under negotiation and isn’t completed.

“That would be a strong signal that there will be other (contracts) to follow,” said Charlie Riedl, executive director of the Center for Liquefied Natural Gas, a trade association.

China has hit U.S. LNG with 15% tariffs, as part of the trade fight, and has been buying the product mainly from Qatar, Australia and Malaysia.

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Other purchases include soybeans and other agricultural goods. In recent talks, Beijing has also discussed reducing tariffs and other barriers that have limited the sale of American-made chemicals and agricultural products, such as ethanol, which now face 70% Chinese retaliatory tariffs; an ethanol byproduct, dried distillers grains, which is used to feed cattle; and polysilicon, a raw material in solar panels that was hit with 57% tariffs as part of an earlier trade fight with China.

Mr. Trump on Friday tweeted that he asked Beijing “to immediately remove all Tariffs on our agricultural products (including beef, pork, etc.)” in part, because he last week scrapped plans to raise tariffs on $200 billion of Chinese goods to 25% from 10% on March 2 as scheduled.

There has been less progress on other issues dividing the two nations, especially China’s industrial policies and subsidies. Beijing considers that support crucial to its state-led development plan and maintaining the Communist Party’s rule.

Yang Guangpu, an associate research fellow at the Development Research Center, a think tank under China’s State Council, said Beijing is taking steps to enable state companies to operate more like commercial entities.

“China is carrying out [state-company] reforms in an orderly fashion, and won’t change the pace because of the trade tensions with the U.S.,” Mr. Yang said.

Beijing has pledged to remove “market distorting” subsidies, people tracking the talks said, but some in the administration consider that insufficient because Beijing doesn’t specifically enumerate its subsidies, at the central government and local level, and specify which ones it will eliminate.

—Christopher M. Matthews in Houston and Chun Han Wong in Beijing

2019年3月随笔

中概股问题

与欧美公司相比,中概股各种行业的上市公司均有严重的公司治理问题,漠视中小股东利益的行为很普遍。
少部分行业垄断性公司股价突出,收到市场追捧,其他公司股价低迷,长期处于股价下行阶段。

另外,由于法律环境和商业文化的不同,中概股低价退市和私有化等有损中小股东利益的行为屡见不鲜,且实质上不受到相关美国规则约束。

与美国本土上市公司相比,中概股股票的收益权属性更为突出,所有权属性几乎无法体现,二级市场投资人的长期投资在最终退出上有极大的不确定性。

以上种种均导致了非优质中概股在投资上的天然折价现象,以及普遍的做空盈利空间。

搜狗的控制权问题

虽然根据协议,搜狐以少于50%的投票权对搜狐董事会拥有控制权,但搜狗赖以营利的核心资产是腾讯赋予其的腾讯系流量入口。从这个意义上讲,腾讯对搜狗的影响力不亚于实际控股。

搜狗的腾讯系入口 (38%流量, 2018财年):
1. 腾讯网(www.qq.com) 搜索栏
2. PC版QQ问问个人中心
3. PC端QQ浏览器默认搜索引擎
4. 手机端QQ浏览器默认搜索引擎
5. 腾讯网址导航daohang.qq.com
6. 腾讯网址导航hao.qq.com

腾讯感冒,搜狗打喷嚏

搜狐的估值折价问题

搜狐市值 < 搜狐持有的(搜狗+畅游)股票市值
(绿色: 搜狐, 蓝色: 搜狗+畅游)
搜狗v.s.搜狗+畅游

搜孤的股价波动系统性的晚于搜狗+畅游股价的简单算术和,有被用来套利的空间

搜狗的流量获取问题

搜狗的主要盈利方式是广告,而在流量获取上,搜狗依赖手机制造商的软件预装业务来支撑其流量的扩展,非自然流量,存在成本上浮侵蚀盈利空间的隐患。

游资热炒题材的问题

游资选择题材股进行炒作,需要结合当前政策热点和新闻热点选择股票。 热点的目的是拉高股价后,热点本身会作为讨论和传播的"题材"在散户和机构之间传播和扩散,使得股价走势产生动能,方便游资后续获利退出。

Where Does the Profit of Speculative Trading Come From ?

The irrationality of market participators provides profits for speculative trading. Just like in Texas Hold'em Poker game.

The majority of market participators are casual individuals, whose trading decisions are largely dominated by personal emotions. They are the amplifier of market trends.

The High Valuation of Marijuana Stocks

At price 70 USD per share, TLRY is being valued at over 100 Price/Sales multiple and seems to be something other than marijuana fan's zeal for pursuing marijuana related subjects. There is a considerable portion of speculative investors involved in holding TLRY at current price level. Their logic behind the current position is vital for the understanding of marijuana stocks.

The valution of marijuana stocks share similarities with Internet stock in its potentional of high speed future growth. Typically at a rate of 300% to 1000% annual growth in key operation metrics for the next 3 to 5 years. The investors valuing TLRY at over 100 Price/Sales ratio must be expecting a future performance like that. As the legal marijuana
market is not exist until a few months ago, everything is in the reasonable imagination.

However, it is a question whether the marijuana industry inherently similar to the Internet industry. Will the marijuana industry be naturally concentrated as the Internet industry, where a few companies owns over 80% of the market. In my opinion, the answer is no. The two industries differ greatly in the marginal production cost. The primary product of marijuana industry is a phsical substance that requires cultivation, production and transporation. While the Industry industry deliver online service that has nearly zero marginal cost per additional user, as compared to other industries.

The possibility of a marijuana business to achieve a annual growth of 300% to 1000% is remote, given the nature of the product as well as the intensive competitions from other market participator. This is especially true as recreational marijuana products from different companis are very similar in nature, which makes competitive advantage very hard to be built.

Chinese Stock Market

Practicing along with the market for the investing of A shares in Chinese stocks is not acceptable. A comprehensive strategy needs to be developped. Available traing styles including herd behavior speculation, market-trend forecast, value investing and news driven speculation. Trading simulation is essential for the verification of strategy.

淘手游的胜利

淘手游赢在差异化竞争和现金流

中国商品房土地供应

中国商品房土地供应市场是单边垄断市场,政府是唯一的供应方,理论上放开土地供应会压低市场房价,但放开土地供应的举措与1. 土地计划经济体制 2. 政府对土地供应的控制 相矛盾,故土地供应在可见的将来不会放松管制。

租金是购房收益的货币收益部分,但其他非货币收益也不容忽视,如与商品房绑定的户口、子女入学、社会福利;同时,随适龄青年结婚组成家庭,继而产生的对稳定居所、以及婚后改善住房条件的客观需求,也是购房收益的一部分。

From Ray Dalio's Economic Framework

Economic Activatity = Direct Product/Service Creation + Product/Service Transportation (Trading)

Ray Dalio oppose using the traditional supply and demand framework to analysis the market. The traditional supply and demand framework focus on the balance of supply and demand of product by the same quantity of exchange, but ignores the motivations, identity and total amount of spending of the purchaser.

Market Price

Market price is determined by the total amount spent by buyers divided by total quantity sold by sellers, in which buyers are the driving force of price movement. Dramatic price movement happens only when there is both purchasing power from buyers and available unit for sell by sellers.

Market Participants

Producers, Traders, Consumers

Sohu, Cyou和Sogou

三家公司均未按时发布2018年年报(与往年相比已晚了20多天),同期股价下跌5%左右

Planning For April

  1. Focus on shorting strategies research
  2. Research historial shorting opportunities, what their signals look loke, what's the best strategies at the time
  3. Find more signals to find shortable stocks
  4. Double U.S. portfolio

2019年2月随笔

  1. 互联网产品的地产属性

互联网产品的地产属性是虚拟的,无法购买但可以租用,对住客(用户)免费却对商家 (广告商)收费。
互联网产品的推广犹如城市间人口的自然和非自然流动,其住客群体覆盖重度互联网用户群。

当线下生活场景和活动被搬迁到线上时,线下生活变被线上生活所替代,与时间一起被同步覆盖的还有消费

  1. Future and option contracts
    Future contract gives the buyer the obligation, not right to purchase a specfict assets at a specific price at a specific date.

  2. Work-out and Value Investing

The value of work-outs depends on business valuation of the target firm from the point view of an acquirer in acquisition. The type of acquirer can have an impact on the price offerred. Strategitic investment is very different from financial investment in terms of valution structure.

TLRY Research Notes

  1. Terminology and History

Hemp: A plant that is grown specifically for the industrial use of its derived product.

Cannabis: A general name for cannabis plant and related products. Male and female cannabis plant, industrial use cannabis and drug/narcotics cannabis.

THC: The principle chemical component in drug use cannabis.

CBD: The second most abundant cannabinoid in cannabis

Marijuana: A custom name for both medical and drug use cannabis, origined from South America.

Compassionate Access: Potential patient benefit justifies the potential risks of treatment, like using drugs that have not passed the clincal trial; drug used for pain release purposes.

  1. Geographical Distribution of Revenue
    Six months ended June 30, 2018, 97% of Revenue were generated in Canada. 3% of Revenue were generated outside Canada. The company has 15% fixed assets located outside Canada and expects the overseas revenue to catch up.

  2. Growth of Expenses
    The growth rate of S&M expenses and G&A expenses far exceeds the revenue growth. The profitability of the business is questionable if these expenses cannot be properly optimized.

M&A Deal Notes

UQM

$ 1.71 acquiztion proposal, as of June 28, 2019, market price $ 1.65

Merger Disclosure

5% beneficial ownership rule: Schedule 13D reports
FORM 13H (Large trader reporting rule)

Tender Offer: Schedule TO
Target Company Response: Schedule 14D-9

Tender Offer
A tender offer is a broad solicitation by a company or a third party to purchase a substantial percentage of a company’s Section 12 registered equity shares or units for a limited period of time. The offer is at a fixed price, usually at a premium over the current market price, and is customarily contingent on shareholders tendering a fixed number of their shares or units. Under the Securities Exchange Act of 1934, parties who will own more than five percent of a class of the company’s securities after making a tender offer for securities registered under the Exchange Act must file a Schedule TO with the SEC. The SEC also requires any person acquiring more than five percent of a voting class of a company’s Section 12 registered equity securities directly or by tender offer to file a Schedule 13D.

The filings required by Section 14(d) of the Exchange Act and Regulation 14D provide information to the public about persons other than the company who make a tender offer. The company that is the subject of the takeover must file with the SEC its response to the tender offer on Schedule 14D-9. The rules also set time limits for the tender offer and provide other protections to shareholders. When a public company makes a tender offer for a class of its own equity securities, it similarly must file a Schedule TO and may also need to file a Schedule 13E-3.

Except for the anti-fraud and a few other provisions of Regulation 14E, the SEC’s tender offer rules generally do not apply to tender offers that result in ownership of five percent or less of the outstanding shares —also known as "mini-tender offers." You can learn more about the risks of mini-tender offers by reading our information on that topic.

2019年1月随笔

Wedbush Securities, Inc. 2019-1-14 AAPL Researh Report

The Wedbush report extensively discussed the future growth of AAPL's service segment. The FY2019, FY2020 revenue projection of AAPL made by Webbush was primarily based on the perspective operating result of AAPL's current business strategy.

The realiablility of Webbush's valuation analysis on AAPL, which is based on future growth projection, is questionable due to its speculative nature out of uncertainties.

ION Geophysical Corporation

The intransic value for ION is determined by the potentional acquisition price offerred by another company. When no such offer currently exist, the price can be estimated by comparing similiar mergers in industry.

Statutory Merger and Statutory Consolidation

Statutory Merger: one of the entity exist as a business entity after merger
Statutory Consolidation: both of the entities are terminated and replaced by a successor organization.