Beauty of Nature Around us (Day 30)

  Today, enjoy some flower photos!

Sorry, Google says I am out of my quota for storage! 

Here is a quick Jugaad! I added photos on my WordPress blog: EnjoyMyPhotos here.

We All Are In Good Hands. (Day 29)

We are in good hands. Believe it or not, there is someone, sometimes visible or sometimes with invisible hands, ready to help us, ready to take care of us. Many times we get nervous, we feel sick, we feel helpless, but we need to remember that we are in good hands.

'All is well'. Rancho is a genius in 3 Idiots. In difficult, challenging situations, he keeps telling himself All is Well. Sometimes this can appear as a comedy in the movie but it is not IMHO. We have two minds- conscious and unconscious. The unconscious mind is always like on Autopilot. It is very powerful. It just listens and learns, learns really hard, and does what it has heard. It is a very obedient slave, in a sense. It doesn't ask questions. it just takes commands and does the work. It does what you tell yourself. Try telling yourself that All Is Well in difficulties. Take a pause and then take a deep breath. Then breath out as slowly as you can. When you think you are done, breath out a little more and force out all air from the lungs. Your obedient subconscious mind will start working to make things well for you. If you keep telling yourself you are sick, you are in a problem, you are worthless, and with similar negative things, the subconscious mind takes these negative commands, and acts accordingly. So, instead, talk positively with yourself. It works. Try it next time. You will find that you are in good hands, with your unconscious mind.

There are times we feel sick. Our body has some pain. However, the human body is amazing. The systems in the body immediately start fighting to bring things back to normal. These days, we find shortcuts. We resort to medicines, like Tylenol, to get rid of the pain quickly. I am not a medical expert, nor I am against it. Most of the time we think medicine 💊 is doing the trick; I believe the antibodies and the self-fixing mechanism inside the body are also working to help us. Plus, the trick is in our messaging. When we have a headache, we keep telling us that it is bad, it is going to get worse until we take a tablet. The moment you take Tylenol, your messaging changes. Now you are telling your subconscious mind that you are going to be okay soon. You start feeling that you will be well very soon, and maybe that does the real trick. 

Also, look around us. The birds, animals, insects. Do they get headaches? Fever? Probably they do. I don't know.  However, I know for sure that they don't take Tylenol. It is this self-correcting mechanism inside their bodies that gets them well. Or, nature hints them to do something that would help them. This is true for us too. It is in the DNA of every living being to fight the intruder, sickness, and get the body back on track. If you live life the way nature intended us to live, nature is going to take care of you.

Silly, you forgot about the creative and destructive forces in nature? They go hand in hand. When it seems that you are surrounded by destructive, negative forces, the creative positive forces are acting to get you better. When there is Shiva, Lord Brahma is also there. Lord Vishnu, with the balancing, is there too. However dark the night is, there will be light in the end.

I have heard often from different people that prayers and blessings from their guru or religious leader got them well, cured their sickness. I believe them. I think, their confidence, and belief that the prayers will work, krupa or blessings will work, does the trick. This is like telling your subconscious mind that you are going to be well soon. I think that often does the trick.  

Also, help is around us. If you need help, ask for help. There is no wrong in asking for some help, as long as you are willing to help others who are in need, most other people are ready and happy to help you too. You will be surprised how most friends, family, and even strangers out there are so willing to help you when you are in need. Live and let live. Live and Help Live.

Don't forget to try this next time. Put your right hand on your heart and tell yourself that all is well. 

Crooked Capitalism: Once more Capitalism shakes foundations of Democracy $GME #WallStreetBets (Day 28)

Capitalism is becoming crooked. One more time, see how capitalism shakes freedom and democracy!

Capitalism as an economic system alternative to forming a society has been universally accepted as the best option since the early twentieth century. No doubt capitalism has served the US and most other nations very well. Don't take me wrong and assume that I hate Capitalism when I make some points in this post. As time passes, it is becoming increasingly crooked. I mean it is turning into a form that does more bad than good to society and to the overall population. In a capitalist society, money is power, and that power can often be used to get more money, I mean more power. And when it comes to getting more money, generally, you have to directly or indirectly take it from someone else. unless you are the US Treasury or the Federal Reserve who can create money out of a vacuum ;) For all others, the money has to change pockets, these days it is more like changing bank accounts, from someone's account to your account. 

Money has some rules and follows certain dynamics. It follows the law of gravity, too. More money pulls smaller money quicker. Forgive my English or grammar. In gravity, a larger object pulls the smaller object. Same way, 1 million dollars can pull another 10000 dollars much easier than a 1000 dollar can. I am trying to say that if you have $1m, you can probably easily make another $10k by lending, investing, trading, speculating, flipping, or corruption. However, with only $1000 in the pocket, you generally can't pull $10k with any of this- lending, investing, trading, speculating, flipping, or corruption. All of that is generally out of question for smaller pockets, common people. You have only a few options, to work hard, get a second job or be creative. There is one more thing that a 1 million dollar does for you to help pull more money. Lobbying. Influencing policymakers. Ability to make political donations, or influence lawmakers to have decisions and policies made in you, to your advantage. Money is power, after all, and with power, you can get things done your way. Let me get back to the main topic.

$GME and $AMC. Yesterday I was on a hike, and when I reached the top of the hill, I started checking prices. #GME was $125 and #AMC was $8. I wanted to buy some for my son who was with me, and for me, to our frustrations, Robinhood wouldn't even search on GME! They had blocked it. Then I tried MerrillEdge, but they wouldn't let me buy these stocks either. I am sure the same happened with many people who use brokerage accounts like Robinhood to invest and trade stocks. Not the case for Hedge Funds and billionaires! They don't use Robinhood or TDAmeritrade!! They have special access to trade directly, or through some institutional broker, and I am sure none of the trading restrictions applied to them! 

I had clean cash in my account but I couldn't buy a stock at the right price, or when I wanted to buy it! My freedom was taken away, in the name of protecting me. This is how usually they play. They make it appear that they are doing a favor.  To create some jobs, they need to have lower taxes. When you start a small business, you don't get any special treatment. If Amazon wants to set up a warehouse in your city, the city council offers a special package to the richest American, Jeff Bezos, and his 1.5 trillion dollar company.

The system (I mean the Crooked system) prevented me from making some money. However, we all know that in the #GameStop saga, #AndrewLefts and #Melvins of the world had probably all freedom to act the way they wanted. Not only that, they were allowed to sell the stocks they didn't even have!!!!! Many of us were stopped from buying at the dip by vested interests. Today also, most of us were prevented from creating new options positions! This was a #GammaSqueeze, and Options trading was the instrument for Main St to corner Wall Street.  However, the Wall Street billionaires and the brokerages made the arsenal, weapon of the mass, the Main Street ineffective by not letting #Reddit and #WallSteetBets members take any new position, and that was in the name of saving the society ;)

What happened here? Big money pulled the small money into their accounts! This was a chance for the mass to punish the bad boys, but the bad boys were able to use their power/tactics, in an illegal way, and get things in their favor, even in this obvious case. Law of the Crooked Capitalism ;) Big boys were able to have a laugh at common traders, one more time. 
One more odd thing: The billionaire owners of Robinhood should be prevented from using the name for their app. They are distorting the meaning implied by Robinhood, as we grew up knowing.

There are two twits that explain this crooked system effectively:

Chamath Palihapitiya

@chamath

·

7h

Facebook and

@RobinhoodApp

are the same: They both trick you into thinking you are the customer. But, in fact, you are the product and your data is the asset. These assets are then sold to their true customers who pay them money and always at your expense. STOP BEING TRICKED!

Chamath Palihapitiya

@chamath

·

6h

All the money in 2008 was made by suits identifying a market dislocation and exploiting it. All the money in 2021 was made by retail identifying a market dislocation and exploiting it...until the suits intervened.

What’s the difference between these two statements?

$GME #GameStop: #OccupyWallStreet2.0 How should one play this game? (Day 27)

Main Street vs Wall Street. Greed-based Society Vs a fair equitable society. How to finish this battle?

The #GameStop is always a favorite place for young gamers, for years. It is a great place to trade your old games, consoles, and buy different games. Now #GameStopStock has become the most talked-about stock (or should I say a game?) in the world. Thanks, mostly due to, the same gamers who loved GameStop stores. This time the game is playing on the Wall Street turf; not a fake game, not with fake money anymore.

The game is played for two reasons: many are playing this game because they love gaming, and GameStop, and there are people who are playing this game because they are fed up with #CrookedCapitalism and #WallStreetGreed. The majority of the youth is angry because this same greed of Wall Street Hedge Funds and professionals brought US Economy to its knees in 2009-2010 but none of the Wall-Streeter was punished! The melt-down due to #SubprimeCrisis caused a lot of pain to financial health and portfolios of retirees and most households, but Wall Street gamers (they are also gamers in a sense. The only difference is that they game the system😉) lost almost nothing. They were hurt but most came back more vigorously to play the same game again, to rob the system, to rob the ordinary people. (The last decade, since #SubprimeMeltdown, the top 1% in the USA has seen even more income and wealth compared to the bottom 99%. The income inequality is getting worse at a rapid rate!) At that time, common people, mostly youth, showed their anger with #OccupyWallStreet. I think this time, we have #OccupyWallStreet2.0. This time, the battle is fought not in Zuccotti Park in lower Manhattan with limited people present but it has now moved to online, like most other things, and there are few million people fighting the battle this time.

I am sure I don't have to teach these gamers how to play. They are winning! This time, they have cornered the #WallStreetProfessionals, in their own game! I just want to share my jugaad, 2 cents based on the last 3 decades of experience with markets, and a sort of dislike about how Capitalism has turned crooked. (See my Crooked Capitalism group on FB.)

I want to share some of my thoughts on what to do now. when the game is almost won!

• In most games, we have only one winner. This time though, we need more winners. I think everyone who has played the #GME stock game is a winner at this time when the stock is trading at $450 except for those Hedge Funds and Wall Street wolves who have lost big time. I think it is time for #Reddit #WallStreetBets players to take the money in their positions, so they can wage another battle against the Wall Street greed and selfish money-mindedness. Let not this be one-time gameplay! Come out of this game as a winner, and play the next battle, next battle even better.
• The stock is going up for two reasons: The main street has almost cornered the game, and Wall Street is being squeezed. It is likely, the short squeeze has maybe done now. If Wall Street is out, this is a game of a gamer against a gamer, a common investor against a common investor. Let us not hurt each other, and kill each other. That is what wolves like: they don't want sheep to unite and give a fight. When sheep fight among themselves, wolves are likely to be laughing in the end.
• #Chamath- one of the biggest supports. He is out! He is a gamer. He robbed Wall Streeters and took his money. Most of the small players need to do the same! Take your winning and mark your victory. You have caused the pain to whom you wanted to hurt. One way to look at this is: let us be human and leave them from more suffering (if they are still there with the short position. I doubt).
• You have shown your power and moves to Wall Street. They are stunned. Probably they are out now. They have accepted their defeat (maybe at least for the time being. They are wolves after all. Who knows when they start their tricks again ;) ) By staying in too long, and by pushing GameStop stock still higher, most gamers on the Main Street are likely to hurt each other. The higher the price goes, it is going to bring the same wolves back, or the new wolves, hyenas with the smell of blood. Remember, that shorting at $500 or $1000 would have much more staying power than when they were caught shorting GameStop at $20 or $40. Also, to fight at a short at $500 is going to need a lot of arsenal from the Main Street end! It will be an even tougher battle, with even slimmer chances of victory.
• Use the money to fight another battle with Wall Street's greed! This is a war. Winning one battle is not enough. You need money, arsenal for more battles. This battle is almost dead in my opinion. Even if it is not, selling the #ShortSellers the stocks at 10 times more, at around $450 is the right thing to do in my opinion.
  
• In my opinion, as the GameStop stock is riding high, #RyanCohen and team should issue new stock to raise a few billion dollars for the company. Use the money to create a parallel to #XBOXLive and #SonyPSN. These two corporates in a sense keep robbing gamers every year, you are playing or not. You have to pay them dues! They need some competition and GameStop can be a great provider of another reasonably priced place for gamers to play online games.
• Last but not the least, let us remember, we hate excessive greed. Let us not fall prey to it ourselves ;)

I wrote this post because I want Main Street to win against Wall Street. I want a better society, which is not founded on the idea that Greed is good! (See my blog if you are interested: Crooked Capitalism)

**** #deepfuckingvalue. And beginning of the GME saga!! I want to bookmark this post so adding it here.

https://www.reddit.com/r/wallstreetbets/comments/d1g7x0/hey_burry_thanks_a_lot_for_jacking_up_my_cost/?utm_medium=android_app&utm_source=share

New Jugaad: #OccupyWallStreet 2.0 (Day 26)

 #OccupyWallStreet initially happened in 2011. It was a call by Main Street to keep a tab on the greed of Wall Street, which brought down the economy in 2009-10. It highlighted that many people were not happy with the income equality in the society, and blamed the narrow, money-minded attitude of the Wall Street bankers. It was mostly a peaceful protest. After some time, the movement fizzled out. Now we are in #OccupyWallStreet2.0. Here, the Occupants are battling the Wall Street in their own game, and so far, the protestors are winning! 

• The 1.0 took place at Zuccotti Park, located in New York City's Wall Street financial district, in September 2011.^[7]. The 2.0, like many other things, has also gone online. It is not confined to some city or a place. The crusaders against Wall Street have come out in a much larger number and with much more power this time. 
• This time, it is said, 2.0 started in a subreddit group /WallStreetBets. The group has 4 million members. Last time, the movement seemed like Main Street Vs Wall Street. This time, the Main Street is playing against Wall Street in Wall Street's own turf, and so far seems to be beating them.
• This started when the group started to buy stocks for #GME GameStop. Wall Street was very bearish on the stock, and there was a Short Interest of 140% of the free float! The stock closed around $40 last Thursday. On Friday, it closed at around $63, after touching a high of $70. On Monday, the stock price touched $155 but closed at $80 or so. The next day, on Tuesday, the stock jumped again and closed at $147. Then today, it opened at around $350 and closed also around the same level! This stock has gone up like crazy! There is tremendous buying by loyal followers, and also probably short covering.
• My 14-year-old comes to me today and tells me to buy Nokia stock. He wants me to buy as soon as the market opens because then after, the price is supposed to be going up. He wants me to buy this stock because he wants me to help the people who are trying to teach some lesson (punish is probably a better choice for the words) to Wall Street and hedge fund managers. Someone on TikTok told him that the Nokia stock is going to the Moon!
• A friend's son also bought some GameStops to punish hedge fund managers. All of his friends are also buying AMC, GME, BB and NOKIA for the same reasons.

Not FOMO - Let me talk about Actually Missed Out Opportunities (Day 25)

FOMO The Fear Of Missing Out is a new popular word to describe situations where investors jump on a trade impatiently, because they are afraid that if they wait, they will miss out on the opportunity! 

Today, I am going to talk about opportunities that I have missed. I am not going to talk about some stocks that I wanted to buy, but I missed them. I am going to talk about positions that I was already in but closed too soon. I was in the right boat, but I jumped out too soon! I am sure I made the best decisions I could in those circumstances so I don't have anyone or anything else to blame. I take full responsibility for untimely exits. I am writing this post to share with the world that you are not alone. This happens with most of us at some time. Sometimes, we are in the flow with the market; and sometimes, I try our best but we are stuck against the flow! In this post, I am going to talk about some positions over the last year, on or after January 2020, that could have yielded excellent returns. 

TVIX:  This is a triple short volatility play. I was overall 400 shares long at an average price of around $67. The stock dropped to around $40 in Feb-2020. Then the COVID panic was just starting and the stock prices were going down for most companies. Only this stock, and similar bear market related stocks were going up. TVIX started going up. I closed the position at an average price of around $80-85! The stock actually touched almost $1000 over the next few weeks. During the time when almost all stocks were dropping, this one stock actually went up by around 20 times. Very frankly, I don't think I would have held this position that long. Theroricatlly, that $27k position could have, in the very best-case scenario, turned into almost 400k!

UVXY: Another triple short ETF. I was long around 5000 stocks in Jan-Feb of 2020 with an effective price of $14. I was out when the overall market started dropping but UVXY started climbing up, at an average price of $18-20. The stock peaked at $135 over a short period of 3-4 weeks!

NIO: Just when NIO started going up from the $2 level, I was long around 25000 stocks at an average price of $3! I sold all of them for under $8 by June 2020 end! After 6 months, since my exit, NIO is at $60 today! Had I held on to it that full position, I would have... lol, it really doesn't matter. I started trading NIO to make around 100k and once I had it, I happily called a quit. Actually, for NIO, I have recorded all of my traders here on a Google Spreadsheet. Check out if you are interested to peek into my trading! 

PLUG: Had around 20000 stocks with the purchase price of around $2-3. I sold them all below $10! Today the stock is at around $70! (At one time, I did a quick trade of 30k more stocks so at the peak I had 50k position in this stock!)

These are some of the situations which can leave anyone scratching his head! Don't think I am too smart or successful. Here I was just showing some positions that resulted in tremendous profit potential, that actually had the potential to make a lot of money for me but I jumped ships too quickly....Let me be very frank, I lost a good deal of money during COVID panic, and then when the market was going up. I didn't think the market would go up this high and Tesla would touch $4500 split-adjusted price as of last week. I traded more short than long and that caused me a good deal of pain. My 2020 was actually painful. Please, by reading about my positions in this post, don't think I am super successful, or smart. Like most others, I have good days and bad days. 

Here are some other recent trades.

GEVO: Knew nothing about this stock or company but at one point I was depressed. My picks were not moving as intended so just listened to my brother-in-law. Bought 20000 stocks at around $1.30. Sold them around $2! My brother-in-law was very bullish. Wish I had stayed longer with him! Today, within 2 months period, GEVO is trading at $13! (And my brother-in-law is minting money in his positions in GEVO ;) )

AMC: A friend told me towards the end of 2020 that he liked AMC so just to keep the stock on my radar, I bought 1000 stocks at $2.21. I thought I would buy more if and when the stock starts going up! In the last 3 days, it is going up and has gone up by almost 400%. Unfortunately, I couldn't buy more!

GME: One recent very interesting example. Last Thursday, a friend sent a message on WhatsApp that he is shorting GME- Gamestop. I never followed that stock and didn't know much about it! Checking news, I found a lot of posts/news articles about Citron fund manager, Andrew Left, who was saying why Gamestop stock was overpriced, was about to crash, and why GME was a great short play. Maybe that is why my friend was interested in shorting it! To me, it seemed that Andrew Left, and other Andrews like him, were struck, and they needed us also to short the stock so they can actually make the stock go down! Normally, greedy hedge-fund managers never tell anyone what they are buying or shorting; it is a very secretive business. Only when they want you and me to also buy or sell, so they can have prices go higher or lower, they will share such investment ideas publicly ;) Anyway, so at the market open last Friday, I bought 200 stocks at $42.70. Then I put a limit to sell at $46.50 and went for my daily hike. The position got closed within an hour or so. Then the stock touched a high of $70 the same day and closed around $60. The next day, on Monday, which was yesterday, the stock touched a high of $155 and closed around $80! Today, in the aftermarket, it is trading at $210! LOL, wouldn't you also like to hit your head against the wall to have missed an opportunity to make 500-600% return over 3 trading days! Well, I didn't know much about GME and I was quite happy with my 10% return within an hour! I am sad now because I coulda woulda shoulda  LOL This is market ;) Sometimes, things go your way and sometimes they go against you. Don't confuse wins with brains. Many times, it is just that nature's positive force is with you and you are winning, and other times, the negative force is around you and you keep missing out. FOMO- it is real, and it is there in everyone. If you just go ahead and act because of FOMO, most of the time, you would end up losing IMO. The current bull run and exuberance is exceptional and is not going to last too long IMO It is just a matter of time. However, when the party is going on, just enjoy it. Don't worry much. There is only one truth in life: We came in this world empty-handed and will be leaving empty-handed. Whatever in between the entry and exit we can enjoy or experience, just do that with a gamer's spirit. If you win, don't think you are too smart. If you lose, slow down but do not stop. The wind is going to change in your favor one day. Stay humble at the peak and stay positive at difficult times. Nature's two forces are always there and that can make you feel like being on the top of Everest, and at times, make you feel like in a deep ocean.

Is the Bull Market Top Nearby? (Day 24)

A good friend casually asked my opinion about his 401k account. Prior to the US elections in November last year, he moved money to cash. The markets are up around 15% since then. He is wondering what to do now. He probably has the fear of missing out. FOMO.

I sincerely wanted to help him. However, I didn't have a sincere answer for him. I don't know with sufficient confidence where markets are heading these days. (LOL, I don't think I knew that most of the time ;)) The market shows all signs of a maturing bull market. I don't think it is a good market to invest at current prices. On the other hand, for long-term investors, there is no bad time to invest. Over time, over years, the market has been going up. If you enter at the wrong point, you may have to wait some more years before you reap the benefits but if you decide to time the market and wait, you never know how long the current market will keep going up! If the markets really go down from here, you may be able to buy cheap and increase the returns but then also, you have to know at which point you would re-enter. There are so many ifs and buts and no clear answer to me. So I had to tell him that I have no concrete advice for him. Then I said that if I were in his boat, I would stay out for some time!

Why would I stay out for some time?

• The prices for most stocks have exceeded the best-case scenarios. It is really hard to find risks, reasons why Facebook, Apple, Amazon, NetFlix, Google, Microsoft, Nvidia etc could go down from current levels! Everything is just going right for them!! There doesn't seem any risk or negatives that can affect them or the market!
• Most participants don't see any downside in the market. Many seem to believe that prices are simply destined to go up.
• Small caps are doing much better compared to the blue-chips. Most small caps are doing well. Many double or triple in a day. Traditionally, when small stocks start going up, that generally indicates the bull market top.
• Investing has spread to common people! Everyone you meet, speaks like a smart investing guru and has some investing tips for you. People who generally would research for a week or a month before buying a new washer, refrigerator or laptop, would seem to be doing not even 10% of that research while investing 10 to 100 times more money in some stock!
• The Fear Of Missing Out FOMO is rampant! If you don't buy a stock, you are afraid you would end up spending significantly more money tomorrow!
• Many participants are able to make 10-100% return in a week, if not in a day.  This kind of rapid movement in stock prices is generally seen towards the tail end of the rally. There is a lot of exuberance among investors. 
• IPOs and SPACs issues are selling like hotcakes.
• In politics and media, the economy is not well! They are talking about another 1.9 trillion stimuli. On the other hand, markets are doing awesome. They think the economy is doing very well. Not sure if this is a diversion, or this is because the markets are forward looking! 
• Short Squeezes are common. This causes some stocks to fluctuate widely! GME /GameStop is a great example. A friend told me he shorted it when the price was around $42! I didn't even know about this stock! The next day, the stock went to $70 and closed around $60. The next day (today), it touched $150 and closed at $70. In the after-market, it is at $88! From a valuation perspective, the company is doing really bad but looks like some hedge fund managers are caught short in this stock. Another person I know told me today that this stock is going to be above $500!

These are the factors that make me scared, and also make me look stupid in my own eyes! By not trading aggressively in tune with market sentiment, and stock prices trend, I am letting go of good profit opportunities. Sometimes, too much thinking or analysis can hurt too. May I should have told my friend to just do it. Jump in and enjoy the opportunities, without worrying much about tomorrow! 

I am curious: what would be your advice to my friend?

Capitalism- A Curse or a Blessing? (Day 23)

Before I start sharing my thoughts, let me talk about two systems that most countries choose. I want to avoid confusion because most of us are taught over years to hate certain types of systems ;) Words like communism or socialism create knee jerk reactions among many of us. 

1. Political System: A country can choose the political system to be a democracy, a monarchy, or an authoritarian/totalitarian system where a group of individuals rules the region. This group includes dictatorship, aristocracy, communist forms of government.
2. Economical System: An economic system is a means by which societies or governments organize and distribute available resources, services, and goods across a geographic region or country. A country can choose capitalism, socialism, or communism as an economic system for it. 

You can see that communism is a form of the political system as well as an economical system. Communism is often mixed with socialism but there is one major difference. In communism, there is no private ownership, and government makes most, if not all, of the decisions. In socialism, private ownership is allowed but the society focuses on a fair distribution of national resources, and achieve and maintain equality of income and wealth among citizens.

In this post, I am going to focus on the economical systems, mainly on Capitalism, and how it is slowly giving a way to Socialism. Capitalism is an economic system of free markets and private ownership. It is a system where it is assumed that greed is good, and people are rational.  Greed would drive them to maximize output and to have more and more. Rationality will help them make the right decisions. Supplement these two beliefs with free markets- where there is no intervention by the government or anyone. Let market forces decide what is good for society. The government is supposed to stay out of the economic system.

Capitalism is generally accepted as the best system in contemporary society. It has no doubt helped the US and many countries to achieve rapid growth and raise the standard of living for most of their citizens. I am in no way trying to prove that capitalism is a bad form of an economic system. What I am trying to say is that it has outlived its usefulness in the form that we have known capitalism so far. I explain this in my jugaad way. There are two forces at play at any time- the good, positive, creative forces and the bad, negative, destructive forces. So far the good positive and creative forces have helped get the best out of a capitalist society. However, as time is passing, the negative and destructive forces are becoming more powerful. They are acting in opposite ways and making capitalism show its dark sides. Here are some examples how Capitalism is becoming crooked.

• Income Inequality is worsening in capitalist societies. This is what has happened in the US over the last 4 decades.
  
  
• 1948-1979, the bottom 90% shared 67% of income growth. 2000 to 2007, all growth went to top 10%. Income for bottom 90% actually declined!

  

• Wealth Inequality- Same Story. The top 5% has taken 75% of the growth in household wealth. The bottom 60% population, it has actually gone down.

  
  

• CEOs/CFOs in most companies take home 100 to 10,000 times more than the lowest-paid employee. The value disparity between two individuals in the same group, with the same mission, is widening to astronomical proportions.
• Capital vs  Labor. Capital is taking over Labor.  Easier to make Money on Money than Money by Work! \
• Increased influence by the rich on the regulatory, legislative and electoral processes within the country with campaign contributions, lobbying, and control on media. They are better able to manage their own interests at the costs of the mass.
• The narrow pursuit of profit has made health care, drugs most expensive in the USA. Health issues and emergencies are depleting the finances/savings of some families and pushing them over the edge. Money moves from the bottom to the top due to inflated health care.
• Failure of democratic processes in controlling the size and power of corporates has created monopolies in most major industries. Such monopolistic power has killed the benefits of free markets and competitive forces in terms of lower prices. This results in more money moving from the bottom to the top.
• Education is corrupted by Capitalism! Harvard has 39B in its chest, Stanford $26B and Yale $29B and still Education costs are skyrocketing. This has resulted college degrees out of reach for many. This results in worsening the income inequality. 
• Big money controls elections and policymaking with Ad spending, lobbying, and campaign contributions.  Wealth can take power away from the people and make Democracy work more FOR the smaller segment of society. US political system seems drifting towards a form of Oligarchy.
• Citizens United Supreme Court decision: Billionaires and large corporations can now spend an unlimited amount of money to promote what they believe in and influence public opinion.
• Koch brothers are now the most important and powerful players in American politics. They support abolishing of minimum wages, medicare-medicaid programs and social security!
• Due to uncontrolled greed in the healthcare system, healthcare is becoming very expensive. Some drugs have 1000-10000% profit markups. A day of hospitalization costs around $5-10,000. Compare this to the $20000 annual wages for many working in retail, factories or fast food restaurants. The money that half-year of work brings, can be charged by a day or two of hospital stay! 

In my opinion, the ugliness of capitalism has started destroying the foundation of society and democratic society. Capitalism needs to be socially responsible and has to evolve into helping society become fair and just.

Why Bull Markets Come To End, Someday. (Day 22)

Sometimes, markets come into a state where there seem to be only good things around. Prices just seem to go up. Good news or even any sort of news moves a stock higher. Bad news gets ignored. Every day, you find stock prices going up. What causes the party to end? 

Same Jugaad - the forces of creation and destructions: I often refer to the simultaneous existence of the forces of creations and destructions in my posts. The same forces are here also at play. There are cycles everywhere, and stock markets are one perfect example. What goes up, comes down. Forces that push stock prices higher are accompanied by negative/destructive forces all the time. However, at times one force is so prevalent, dominating that the opposite force is invisible, and seems like it is almost non-existent. When only good things seem to be going on, in some corner or somewhere the bad/negative force is just becoming stronger to strike at some point. Every positive force, there is some negative force. Nature (and here markets) exhibit the same. When things are going well, suddenly something unexpected can happen from nowhere, just to act as a brake. 

Here are some of the 'destructive' forces that keep getting active as stock prices keep hitting stratospheric heights. 

• Diversion of money to other assets: When markets keep going up, it pushes prices for most stocks up and makes them seem expensive. For new prospective players, the other asset classes or markets, like bonds, real estate, gold, commodities seem to offer better values. High stock prices put a brake on the money coming into the stocks and divert them to other markets. Also, existing players also start cutting down their holding by profit-taking and moving money to other markets.  
• Fundamental reasons: Sometimes, the market seems to be overpriced, when valued from conventional measures. The cashflow generating ability, or the profitability, is not able to justify the overall value of a company or its stock price in other words. Optimism overextends in a bull market, the same way pessimism is overdone to bring prices too low in a bear market or in panic situations. The fundamentals are likely gravity. They always try to bring the stock prices to some fair levels, based on a company's profit-generating ability. The problem with the power of fundamentals is sometimes, it seems to be powerless (I mean useless or outdated) for an extended period.
• Demand and Supply- basic laws of economics: We all have learned that as prices go up, the supply goes up and demand comes down for most things. The same applies to stocks too. However the funny thing with the market for stocks is...well, this can be a separate post itself. We will talk about it some other day!
• Greed: Greed- having seen the prices only go up, investors forget that the prices can go down too. This shifts the supply curve, as with rising prices, current holders avoid or postpone selling of their holding. They decide to ride a bit longer, as it seems very certain to them that higher prices for the same stocks are just around the corner. This reduces the supply, or selling pressure, causing the prices to move higher initially but in the end, it creates a larger pool of potential sellers.
• Fear- FOMO: The fear of missing out- pushes prices arbitrarily high, and pushes them out of the reasonable valuation. This at some point attracts profit taking and short selling. Plus, the money flowing into stock due to FOMO is mostly hot money, which is likely to find an exit soon.
• Insider Selling: Stock options are generally very generously given to C level executives, and sometimes to many employees across the company. For such people, their most of the net worth is tied to this single employer stock. With rising prices, the cash-out from this group of stockholders provides a supply of the stock. This keeps going up as prices keep going up, which acts as a sort of brake on the bull market and takes money out of the market.
• IPOs and SPACS: Total number of Initial Public Offerings (IPOs) go up as the bull market keeps going up. Also, the size of IPOs also increases. This also takes the money out of the market, and into the balance -sheets and bank accounts of the issuing companies.
• Stock issues by companies:  As the market keeps going up, the appetite of investors expands. At some point, the prices of almost every stock seem to be going up. Some companies, who had normally volumes of a few thousand stocks a day, get traded in millions. This provides a great opportunity for most companies to issue fresh new stock, raise good money for expansion, or operating expenses. As an example, some analysts were predicting that Tesla will run out of cash at some point. Thanks to the bull market, and a super-duper bull market in Tesla stocks, the company raised almost 10-20 billion dollars! This money has come out from Tesla stock buyers and has got into the bank accounts of Tesla company. Similarly, NIO has raised around $5-10 billion. Gevo, a company which has a market value of less than $100 million a few months ago, has seen the stock price go up by 1000-1500%! (I am pretty sure, if SEC inquires, there will be some manipulations to push the price higher ;). Anyway, the company just last week announced that it is doing a fresh offering of new stocks worth $350 million! 
  This is an invisible supply of stocks, which is pulling money out of the market.
• Leverage: As the profit just seems so easy to come, many traders start making bigger and bolder trades by going on margin. This borrowing initially, earns money, but when the market starts going down, it acts as a double-edged sword, and results in accelerated selling, as margin-calls force borrowers to liquidate positions.
• Taxes: A bull market also gives larger gains on 1099Bs and tax returns. This causes Uncle Sam to take money from the market in the form of higher tax payments. This also necessitates selling some stock positions so taxes can be paid. 
• Purchases of Home, Car, Boat, RV, Diamonds, etc: As stock prices keep going up, some investors like to fulfill their other needs and wants. They sell their stock holding and use the money to buy a home, car, boat, RV, Diamonds, Jewelry, Fine Art, and whatnot. This way the money departs the stock market and gets into other markets. The higher the stock prices go, it offers more and more people opportunities to improve their lifestyle by pending or desired purchases.
• Short Sellers: Believe it or not, higher stock prices attract short Sellers and their selling can also increase supply, and influence the prices to go down. (However, during a bull market, short Sellers as a group have nightmares due to rapid upward movement of stock prices.

Like most other posts on this blog, I think I am not done yet. Probably, I can write some more, but I am out of time right now. Good night.

My little friend on my daily hike! (Day 21)

 I go on a local hike almost every morning. It is a 650 feet climb over .5-.7 miles. Last few days, I see one beautiful hummingbird on the top of one dry plant. Hummingbirds are very agile and almost make it impossible to capture them with a cell phone! Still, I try most of the days. One day, I took a camera and took some photos. Please enjoy the pictures of my new friend I look forward to seeing most mornings during this #COVID #Lockdown. It also seems to be observing #SocialDistancing 

Photos with a camera. 

Here are photos from my cell phone on various days.

The first one was on Dec 31, 2020! The last day of 2020- the notorious year. This bird also signifies a new beginning, the promising 2021!

Here is the photo which was taken this morning.

Life-Jugaad: Life Is Unpredictable! (Day 20)

 A really busy day! I missed posting yesterday so I am doing it today!

I am in a refinance process for my home. Yesterday, the underwriters were working on my file and before starting the final processing, they asked me to unfreeze my credit with TransFusion. I did and in half an hour, the new documents from the lending company came with a credit score below 700 when I had it above 800 for the last many years. What a shock! I thought they had pulled someone else's credit report!!

They sent me a screenshot of some collection company posting one unpaid bill of $95 (to which they had added interest of $23! Who says we are in the world of low interest rates?  LOL, the rates are low on your savings and deposits with the bank, and oh, yah, also on refinance ;) but the rates are still high on pay-day loans and credit card debts which are mostly used by poor or lower middle class. The interest the collection agency charged was for two months so the rate is probably more than 200%!!). 

After some checking, I found that there was a bill from my healthcare provider. Actually, after one year, they had sent a bill to me saying that my son had no insurance during one particular visit. He has been fully insured since birth/ We had health insurance at that time so I replied to the provider with the proof of Insurance card with validity dates and also policy info. After that, the provider sent reminders and I ignored them. That was my mistake that I didn't call to follow up on them when they arrived. Then around the Nov-Dec period, when I was paying some copayment amounts on my and my wife's accounts, I inquired about the balance in my son's account. They said there was no due! I assumed they settled with the insurance. Yesterday, I found that they had sold it to some collection agency which then posted it on my credit report. I immediately paid the amount to the collection agency. (I added $2 more in my payment in case if they have some more interest accrued!). Took around 3-4 hours of time on calling the collection agency, the lender, and the credit reporting company. In the end, the lady from the insurance told me that the item was dropped from my account. Not sure how it got dropped but it was pleasing to listen to it.

The most striking timing in this episode was that the credit report posted the item on my credit file yesterday only! The day when I need the report to pull out the score which is 800 plus for the last 15 or so years! One day, few hours, that just robbed me of my afternoon. Still, there is a bit of uncertainty until I hear from the lender that all is well.

Whatever way we plan, live or intend, there are uncertainties in life. They just happen we want them or not, and sometimes, the timing can be so weird it can beat all odds and laws of statistics and probabilities. 

Enjoy your weekend.

Tech Jugaad- Building Computers, Changing Times (Day 19)

My 14 years old son somehow got interested in having a gaming computer. Maybe he was getting bored with Xbox. He came to me with the idea of building a computer together. I had built my last two desktops over the last 14 years so I agreed with the idea. I thought this could be a good learning exercise for him to know computers.

We both entered in this new project without being aware of our different mindsets! Some interesting contrasts.

• For me, when I built a computer in the past, I started with low expectations. He starts with high expectations!
• I made computers in the past because it was cheaper to make them. In those days, there were rebates so you can sometimes get a case for free and also other components for less in the Black Fridays sales, or after rebates. I actually built the previous two computers after the Thanksgiving sales. I was able to assemble them myself and save money. I don't think I bought any component at the retail or full price ;)  Not the case anymore with the younger generation! 
• Normally, you get good deals on parts that are not the latest so I would normally buy parts that are in the mainstream, not on the cutting edge. My son's idea is to make a fairly fast computer, with specific brands for a must for the certain components.
• I always bought AMD CPUs because, in those days, AMD was a distant two manufacturer of CPUs. As a company, it was struggling. Intel as such dominated the CPU market by building it's brand with "Intel Inside" campaigns. Naturally, AMD CPUs were cheaper. Plus AMD was the pioneer of 64-bit processors so I found a great value with AMD. I was one of the early adopters of 64-bit processors. My son likes AMD too, Ryzen CPUs. However, now they are considered hot as Ryzen has really made a name in the market for their CPUs for gamers! They are also in short supply so hard to find at good or detail prices. 
• I would buy any motherboard, Hard Drive, DVD  drive, or GPUs. I considered all of them as some commodity so whoever offered a good price, I would go for it. Reviews were secondary. I would say I wasn't disappointed with this approach. Not so with the new generation. He is picky!
• The case or look or my computer was the last priority. It was supposed to be under the desk and invisible. Not so with him. His computer is going to sit on the desk and it needs to look cool.
• My computers were workhorses. They were supposed to get work done. His computer needs to speak for him. He intends to use it to make a statement about his tastes and interests.
• With my first two computers, once I decided, I would start buying parts as deals came along, without having any budget or must-haves about it. He started with budgeting and created a Google doc with what parts he wanted and how much we would spend for it. I love this budgeting and planning part this time.
• In the past, once I was done building the computers, the cables and wires management was never worth any efforts! He is serious about keeping the look neat and clean! I am impressed!
• I never considered cooling the CPU as a serious thing. He is different. He seriously wants to use AIO, RGB fans, a radiator for cooling the CPU! This just doesn't get into my head! Most of the time, the heatsink of the CPU and a standard fan works fine in my (strong) opinion IMSO LOL. I also know that his set up is not going to generate that much heat anyway that would require a car-like radiator with cooling fluid and a motor. I try to explain to him my thinking, but he is not willing to listen, or negotiate! Just funny how we both talk, argue on this topic.
• I have a keyboard which I am willing to give him ...but he wants some cool mechanical keyboard. Same thing. I use a keyboard as an input device, he sees it differently! For me, a keyboard is a keyboard; for him, a keyboard is a key board (part)  in his setup!
• I never thought of overclocking my system. He is sure he would overclock his CPU! For me, I would monitor the CPU utilization in the Task Manager and see if it is a bottleneck. If it is, there may be a need to overclock or upgrade the CPU. I am sure he is not going to hit the CPU capacity to the fullest so IMSO, he shouldn't overclock the system. However, he sees it differently.
• I am in no rush to build the computer, as part of me, is still looking for deals in components. Also, I don't see any need for the immediate use of the computer. (I am also afraid that, after the computer is ready, he is going to start bugging for games! He already has an XBOX and games!). However, he wants the computer to be done yesterday! This also leaves both of us as not so compatible partners in this new Tech project! Still, with all these similarities and differences between the two partners, I am enjoying the project, in a way (not sure he does too). I am getting out of my box, my world, and it seems by entering into his world, I am feeling a bit fresh, and rejuvenated.