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Showing posts from December, 2007

Final 2007 Portfolio Update

As the year closes in a week time, this post will provide a final update to my portfolio. My current holdings are:

Cacola
China Precision
Fujian Plastic
Hongwei
Valutronics
Two HK stocks

Transactions made since last update:

Sold: Hengxin
Partial Sold: China Precision, Hongwei, one of the HK stocks
Added: Valutronics
Newly added: Cacola

The selling was done partially to fund the purchases and partially to reduce positions that are subjectively less desirable compared to other holdings.

Overall, my year-to-date returns (based on unit value method) is similar to year-to-date Sesdaq returns.

Book Review: The Panic of 1907

"The Panic of 1907", by Bruner and Carr, depicts the monetary panic in USA during 1907, where lack of monetary liquidity, trusts and bank runs come after one another. Due to the lack of liquidity, the stock market has also crashed severely during this period. The liquidity shortage was so severe that the brokerages have to borrow from Mr JP Morgan and the banks such that the brokerages can pay their counterparties and the stock exchange can continue to function.

Overall the book is a very interesting read, especially for those who are interested in monetary economics or the markets. The book is available in NLB.

A short summary of the lessons from the Panic of 1907:

1) For a panic like 1907 to occur, there must be a system-like architecture in place that allows troubles to spread and probably also allow the amplification of these troubles (e.g. self-reinforcing loop). Also, the system may be complicated in the manner that it may be difficult to know the location and the nature …

Book Review: Super Crunchers

This is a review on the book "Super Crunchers" by Ian Ayres. "Super Crunches" is available in NLB at 519.5 AYR

Super Chrunchers describes how regression and randomization has been applied in reality. For people who are studying or have studied statistics or econometrics, the book will show you how these statistical stuff are applied in reality. Overall, I find that this is a fascinating book. However, if you do not understand regression/randomization or if you hate numbers, you may not like this book.

Some interesting points:
1) Companies are using algorithms or super crunching to exploit the long tail. In other words, super crunching may help companies to sell the same product to different customers closer to the customer's reserve (maximum price that the customer is willing to pay).

2) On the other hand, super crunching also helps customer to discern price differences better. Examples are Priceline etc.

3) Randomization (Real-life small scale experiments using ran…