Aloysius Chan's Blog

General terms Gross domestic product (GDP) Purchasing power parity (PPP) World happiness index (WHI) Human development index (HDI) Gross national income (GNI) Total factor productivity (TFP) Banking Gresham's law: bad money drives out good, the more valuable money in circulation will be hoarded. Reserve requirement: the amount a bank has to keep in hard assets before lending out. Quantitative easing (QE) is a federal reserve program while long-term refinancing program (LTRO) is a European Central Bank (ECB) program. Fixed exchange rate system can be implemented to reduce trading loss. Credit crunch: reducing the loan eligibility. Notable abbreviations North American Free Trade Agreement (NAFTA) Economic Co-operation and Development (OECD) International Monetary Fund (IMF) Compensatory and Contingency Financing Facility (CCFF) Flexible Credit Line (FCL) Precautionary Liquidity Line (PLL) World Bank Group (WBG) International Bank for Reconstruction and Development (IBRD) Internationa...

Value of an asset Cash flow by operation Value of increment growth Value of competitive advantage Value of invested capital Cash flow by selling the asset Liquidation value Private market value Valuation component Cash flow: stability is preferred. Timing: the quicker to get money the better. Duration: the longer the money that will last the better. Magnitude: the higher amount the better. Growth: faster growing cash flow is preferred. Uncertainty: the deviation (estimates) of future cash flow, greed and fear. Company specific uncertainty Financial Competitive Management Operational Size Industry specific uncertainty Cyclicality Regulatory Competition Country specific uncertainty Political Currency Economic Time value of money: present value (PV) vs future value (FV), on the rate of return. Equity risk premium Sentiment Interest rates Marco Risk free rate Macro Interest rate Owner earning (not EBITA) = net income + depreciation & amortisation - maintenance cap-ex Capital Asset Pric...

 1720 South sea bubble. 1840 Investment frenzy for railroad. 1953 Mao Zedong started the 5-year plan. 1978 Deng Xiaoping opened the door to 4 decades of rapid growth. 1980 Major banks cross hold stocks and lend between each other. China's economy is only 457 billion yuan. 1989 Japan's excessive lending resulted in a bubble in equity and real estate. 72% drop in land price resulting in loss of profit and a decade of stagnant growth. China reform too quickly and GDP fell. 1990 South Korea chaebols playing with low rate loans. Internet revolution. 1991 Soviet union fell. 1997 Asian high foreign borrowing and crony-capitalism cause a chain crisis. Thailand and Indonesia suffered heavy losses. George Soro’s quantum fund is the cause as he knows Asian central banks cannot maintain overvalued exchange rates. 1998 Asian financial crisis reduced imports from China. 2000 Mortgage loans shoot up the roof and people without income or assets are allowed borrowing. 2007 USA runaway mortgage ...

Globalisation took place more obviously during world war, like increase in rubber demand from hundreds of millions to ten of billions. Robots are going to replace all dirty jobs. Next trillion dollar business will be built on genetic code. Cancer cells can be detected early via deoxyribonucleic acid (DNA) and ribonucleic acid (RNA). Based on DNA patterns and big data from human samples, medically a person's condition can be detected. Algorithm-generated trust may solve cross border business transactions. 3 main cyberattacks are on the network’s confidentiality, availability and integrity. Data: land was the raw material of the agricultural age, iron was the raw material of the industrial age, data is the raw material of the informational age. By the time the population reaches 9 billion over the next 30 years, food supply needs to increase by 70%. Green revolution: the spur of scientific and technology innovation after world war 2. Every country wants to create their own silicon va...