Economics Universe

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What is Yield Curve?
(Original article: How Do Stock Markets React when the Yield Curve Changes?)
February 1, 2019
Akira Kondo

The yield curve, which is one of my favorite economic indicators, describes how the economy is doing right now and into the future. It is a collection of interest rates from the shorter maturities, such as treasury bills as known as T-bills, to the longer maturities, like 30-year government bonds. This is probably the best economic indicator that you can utilize when learning today’s as well as future’s economy and the stock market movement. Personally, I would not have performed well on my investment portfolio during the financial crisis period if I did not know what the yield curve was. Unfortunately, a basic Economics class does not teach this yield curve in details, so does the intermediate Economics course, which not many students are willing to register unless they are majoring in Economics. <Continue to read - click here>

Q1 2017 Apple Earnings: All-Time-High Revenues and EPS, Growth is Back Again
February 1, 2017

Apple Inc. (NASDAQ: AAPL) reported better-than-expected earnings for the October-December quarter after the market closed on Tuesday. The company earned $3.36 per diluted share or $0.15 above the consensus estimates. Revenues during the quarter hit the record-high of $78.4 billion or up 3 percent from the same quarter a year ago. Net income, on the other hand, was slightly down at $17.9 billion, compared to $18.4 billion the same quarter the previous year, while the gross margin, the profitability measurement for the technology company like Apple, was 38.5% or down from 40.1 percent in the first quarter a year earlier. <Continue to read - click here>

2016 Portfolio Summary: Winning Streak Finally Ended, Still Another Solid 7.20% Return
Janauary 3, 2017

For the 2016 stock market year ended, the blue-chip Dow advanced 13.41 percent or 2,337.57 points to 19,762.60, market benchmark S&P 500 gained 9.54 percent or 194.89 points to 2,238.83, and tech-heavy NASDAQ composite rose 7.50 percent or 375.71 points to 5,383.12. In the meantime, EconomicsUniverse model portfolio made another solid return of 7.20 percent, followed by an excellent 19.8 percent return in the 2015 market year. However, the 2016 EconomicsUniverse portfolio was underperformed the benchmark by 2.33 percent, making the portfolio’s winning streak of seven years since 2009 finally ended. Despite the first underperformance over past seven years, portfolio’s long term strategy remains solid as it outperformed, for instance, 13 percent in 2014 and 31 percent in 2013 (Please read: 2014 Portfolio Summary, 2013 Portfolio Summary). <Continue to read - click here>

Q4 2016 Apple Earnings: No Surprise, 2016 Earnings Behind, Is Growth Back Again?
October 27, 2016

Apple Inc. (NASDAQ: AAPL) reported better-than-expected earnings for the July-October quarter after the market closed on Tuesday. The company earned $1.67 per diluted share or $0.01 above the consensus estimate. Revenues during the quarter came in $46.9 billion, compared with $51.5 billion the same quarter a year earlier. Once again, the company expressed the strength of Services category, including App and Apple Pay, which grew 24 percent from the same period in the previous year. Net income plunged to $9.01 billion from $11.1 billion from the same quarter a year ago while the company’s profitability measurement, gross margin, also decreased to 38 percent from 39.9 percent in the forth quarter in 2015 when iPhone 6S went on sale. <Continue to read - click here>

Starbucks and Shenzhen, China: Green Mermaids Catch up with the Fastest Growing Economy in China
September 3, 2016

Shenzhen in Guangdong province, a few distant north of Hong Kong Special Administrative Region, has turned itself into the fastest growing city in China. Per capita GDP of Shenzhen has grown from 835 yuan in 1980 to 158,000 yuan in 2015 while the city’s population grew from just 30,000 to 11.4 million, respectively, within the past three decades. As the population grows rapidly, modern commercial and residential buildings start to pop up nearby newly opened Metro stations, like bamboos after rainy days. Housing prices in Shenzhen are clearly booming. In the meantime, more and more Starbucks stores are opening across the city. Between a hundred of green mermaids, Shenzhen-born Tencent is about to become the most valuable company in China while young talented workers across China are rushing into the city to attain their wealth. This vibrant, yet young and modern, city is now getting attention for global investors as well as travelers. <Continue to read - click here>

Shenzhen Airlines: This Regional Airline Rapidly Expanding Its Network Globally from New SZX
September 3, 2016

Unless those who travel to Shenzhen or frequent Star Alliance travelers, not many travelers have heard of Shenzhen Airlines. It is a typical regional airline, which is based in Shenzhen International Airport or SZX. From its hub, the airlines fly to most domestic cities as well as some international cities, such as Bangkok and Tokyo. Since the new airport opened last year, the airport nicely has transformed into the new face of Shenzhen with its modern-looking buildings and facilities, welcoming the Chinese and foreign travelers. <Continue to read - click here>

Q3 2016 Apple Earnings: Disappointing Earnings are Behind, Growth Ahead

Apple (NASDAQ: AAPL) reported better-than-expected earnings for the April-June quarter after the market closed on Tuesday. The company earned $1.42 per share or $0.04 above consensus estimate. Revenues during the quarter came in lower at $42.4 billion, compared with $49.6 billion same quarter a year earlier, while the company expressed sales from Services, including App and Apple Pay, grew 19 percent. Net income plunged 27 percent to $7.8 billion from $10.7 billion in the year-ago quarter, which had indicated that the company spent massive cash balance on R&D as well as capital return program during the quarter. In the meantime, gross margin, tech company’s profitability measurement, fell to 38 percent from 39 percent from the same quarter in the previous year thanks probably to higher-than-expected demand on newly introduced cheaper iPhone SE. International sales during the third quarter hit 63 percent while Chinese demand fell 33 percent. Overall, the third quarter when pent-up demand for new iPhone is generating strongly is well done for the company and investors are pleased with the result, sending shares up 6.5 percent next-day trading session. <Continue to read - click here>

Urumqi, China: The Farthest Inland City Now Welcomes Modernity

Urumqi, the farthest inland city in China or 1,500 miles west to Beijing, has started to unveil itself to the world. The city is well known among both domestic and international tourists thanks to the world-heritage Tian Lake and the Silk Road point of Turpan. Xinjiang Uygur Autonomous Region, where Urumqi is settled as a capital city, has a population of 23 million, of which local Uygur residents and Han Chinese account for 10.7 million and 8.4 million, respectively. Unlike other cities in China, Urumqi presents a diverse culture and customs. At Grand Bazaar and beyond, Uygur residents walk through a tiny path and some grab a piece of watermelon for refreshment while they communicate to each other in their own Uygur language. Growing number of Han Chinese appears at a few blocks off from the Grand Bazaar and the Chinese language turns on. International hotel, like Sheraton, and a dozen of KFC stores are all settled in the city. <Continue to read - click here>

Q2 2016 Apple Earnings: Disappointing Quarter Finally Comes, China Sales Down 26%

Apple (NASDAQ: AAPL) reported its second quarter earnings for the fiscal 2016 after the market closed on Tuesday and missed consensus estimates on most numbers. During the January-March quarter, the most valuable company earned $1.90 per diluted share or $0.10 below the estimates due to “the face of strong macroeconomic headwinds,” CEO Tim Cook described. Net income during the quarter plunged 22.7 percent from the same quarter a year earlier to $10.5 billion while revenues also declined to $50.6 billion from $58 billion. iPhone sales, which accounted for 65 percent during the quarter, was hit hard while its shipments were sharply down to 51 million units, nearly 20 percent lower from the year earlier. Plus, Mac’s as well as iPad’s sales and shipments also followed the same course. <Continue to read - click here>

Financial Capital v.s. Economic Capital
Capital Creates Efficiency and Efficiency Creates Productivity

The word, “capital,” is often used in financial and economic articles in newspapers as well as periodicals. If you are a student majoring in Economics, you might have read Thomas Piketty’s “Capital in the Twenty-First Century” to learn global level income inequality over the past centuries. Then, you may have confused what “capital” exactly means because you may find out two different “capitals” from the Piketty’s book and your expensive Introductory Economics textbook. Although Piketty’s book is about economic issues, the word, “capital,” used in the book is different from the one that you see in your Economics textbook. The former “capital” refers to “financial capital” while the later “capital” in your textbook is “economic capital,” and they are completely different capitals. <Continue to read - click here>

Shaoyang, China: Unknown City May Welcome Starbucks in the Future

Shaoyang, the city located 150 miles southwest of Changsha, is slowly, very slowly, turning global. Though there is no Starbucks store in the city yet while wealthier Changsha residents enjoy its coffee at one of 22 available stores in the capital of Hunan province. The city of Shaoyang is widespread but once you walk off from the center, you would soon step into the dusty street toward rural villas where you may see numerous chickens as well as ducks walking throughout the farmland. Certainly, its economy is not as handsome as Shanghai or Changsha. However, the city has just welcomed the first-ever bullet train services from major big cities in mainland, including global Shanghai. In the meantime, the world-largest fast food franchise, McDonald’s, has been welcoming modernity-looking consumers from its populous 8 million residents over a past decade. With such environment, premium Starbucks may be interested in entering this city in the near future. <Continue to read - click here>

Q1 2016 Apple Earnings: Just 1 Percent Growth in iPhone Sales, Time to Buy the Stock?

Apple (NASDAQ: AAPL) reported better-than-expected first-quarter earnings after the market closed on Tuesday, despite a difficult economic environment across the globe. For the October-December quarter, the company earned $3.28 per diluted share or $0.05 above the consensus estimates. Net income during the quarter slightly grew 2 percent from the same quarter a year ago to $18.4 billion while quarterly revenue also climbed 1.7 percent to $75.9 billion. In the meantime, units sold and revenue from iPhone continued to post the record-high in the first quarter history at 74.8 million and $51.6 billion, respectively. However, the growth rates of those numbers from the same quarter a year earlier were only 0.4 percent and 0.9 percent, respectively. On the other hand, sales of the other products category, including Apple Watch, surged 62 percent from the same quarter a year earlier when there was no Apple Watch on the shelves. Sales in China during the quarter, closely monitored by many analysts, were up 14 percent while its sales accounted for 24 percent of Apple’s total revenue. Technology companies’ profitability measurement, gross margin, was handsome 40.1 percent during the quarter. <Continue to read - click here>

Is Japan, Inc. Efficient?

Japan is unique. While you are stepping into one of crowded train stations, you may become curious about eye-catching weird posters, sometimes erotic, that are displayed, especially at the bottom of an escalator or stairs. They are the typical posters that try to prevent frequently occurring public molestation, which is commonly called, “Chikan,” in Japanese language. It is very common that you may watch Chikan-related news on TV at least many times a day if you can understand Japanese. Though most foreigners are having difficult time to understand the language while in Japan, the Japanese are also reluctant to speak English. In fact, most Japanese do not speak English even they have gone through a six-year mandatory English class through high school. <Continue to read - click here>

2015 Portfolio Summary: Once Again Outperforming the Benchmark by 20%

The Economics Universe made an excellent 19.8 percent return in its well-diversified portfolio during the 2015 stock market year, followed by 13.15 percent return in 2014 and 31.27 percent return in 2013. That 20 percent return is very well done, especially when our benchmark, the S&P 500, performed nearly a flat return. For the 2015 stock year ended, the S&P 500 fell three-quarters of a percentage point or 16 points to 2,042.94 and the Dow Jones Industrial Average declined 398 points or 2.28 percent to 17,425.03 while, on the other hand, the tech dominated NASDAQ nicely advanced 271.36 points or 5.73 percent to 5,007.41. With that in mind, the Economics Universe portfolio once again outperformed the market, by 20 percent in 2015, which made the seven consecutive years of outperformance over the S&P 500 since 2009 followed by an inline performance during the global financial crisis year of 2008 when the benchmark fell 38 percent. <Continue to read - click here>

Q4 2015 Apple Earnings: Best 4th Quarter Leads to the Best Year in History

Apple (NASDAQ: AAPL) reported a better-than-expected forth-quarter earnings after the market closed on Tuesday, leading its fiscal 2015 earnings to the record history of $9.28 per share or $9.22 per diluted share. For the forth quarter ended on September 26, a day after the new iPhone 6S and 6S Plus released, the company earned $1.96 per diluted share or $0.10 above the consensus estimates. Net income during the July-September quarter surged 30 percent from the same quarter earlier to $11.1 billion while quarterly revenue also climbed 22 percent to $51.5 billion. In the meantime, units sold and revenue from iPhone were also posted the record-high in the forth quarter history at 48 million and $32.2 billion, respectively. Sales of the other products category, including Apple Watch, surged 61 percent from the same quarter a year earlier. Again, sales in China during the quarter, closely monitored by many analysts, were up 99 percent while its sales accounted for 24 percent of total Apple’s revenue. Technology companies’ profitability measurement, gross margin, was 39.9 percent during the quarter. Overall, Apple’s forth quarter is, again, very solid and the shares should gain momentum into the first quarter. <Continue to read - click here>

Starbucks in Shanghai, China: Modern Shanghainese Favorite Third Place

Shanghai, one of the most dynamic cities in China, never stops changing itself. Despite overall China’s economy continues to slump, the city turns into a utopia, as new immigrants flock to the city on a daily basis to look for a job while local residents, commonly known as “Shanghainese,” enjoy attaining modernity. The modernity is what they are always seeking for. A great example of it is a new iPhone. On the Line 2 subway stations between the city’s financial hub, Lujiazui, and Shanghainese’s bed town, Jingan Temple, most passengers onboard hold the newest iPhones in hands while the gold-, now the rose gold-, colored back of the devices colorfully shine throughout inside the train cars. Up on the ground, green mermaids shine across the city. A Starbucks store at Ruffles Square, a few blocks south of the popular pedestrian East Nanjing Street, attracts local Shanghainese as well as tourists throughout the day. Across the Huanpu River, the stores at Lujiazui area welcome white-collar workers for morning as well as afternoon coffee. Over the past years, the company has been very aggressive expanding its stores in China’s largest commercial city and its number now hits 382, out of over 1,700 stores in the country. <Continue to read - click here>

Starbucks in Khon Kaen, Thailand:
Green Mermaid Will Soon Shine Next to Golden Arch

Khon Kaen. Just less than a decade ago, there was only one airline flying back and forth from Thailand’s capital to this northeastern city. Today, Air Asia, Nok Air, Thai Smile, and a legacy flag carrier THAI fly between these cities throughout the day to transport growing fliers. Once you land Khon Kaen Airport, you will have to walk the ramp side, whether it is sunny or raining cats and dogs, all the way to the building to claim your luggage or directly head to hail a taxi. Interestingly, there are many foreigners traveling to this city. However, most of them are probably not tourists. There were even no meter-taxis a few years ago but now a meter-taxi counter is kindly available in the airport to send growing foreign and domestic visitors to their destinations in the city. While a number of flights to Khon Kaen have significantly increased over past years, a second Starbucks store debuted when Central Plaza Khon Kaen department store opened its door in 2009. In coming months, the third Starbucks store in Khon Kaen is expected to inaugurate in the out scurf of the city. <Continue to read - click here>

Central Bank and 12 Regional Feds: Manipulating Today’s Economy

The Federal Reserve Bank, as also known as lender of the last resort, monitors every aspect of the U.S. economy while mainly focusing on inflation and employment of the world’s largest economy through its monetary policy goals. Its name may not sound familiar to you unless you are an economist or a college student, who is majoring in economics or finance. However, you may have seen this Federal Reserve Bank in your neighbor, as it is not alone. There are 12 Federal Reserve Banks across the United States and those are located in New York, San Francisco, Chicago, Boston, Dallas, St. Louis, Kansas City, Minneapolis, Richmond, Philadelphia, Cleveland, and Atlanta. Along with those 12 Federal Reserve Banks across the states, the main Federal Reserve Bank is located in Washington D.C., where a current Chair of the Board of Governors, Janet Yellen, is sitting in the office. <Continue to read - click here>

Starbucks in Denpasar, Indonesia: Friendly Oasis Indulges Foreign Tourists

The Sun sets slightly after six o’clock in the evening at Kuta beach, where global tourists and local residents seem to enjoy this moment each day. Soon after the beautiful sunset, tourists on the beach start to head back to the streets for tonight’s dinner while local residents and workers on the beach prepare to head back home. In the meantime, green mermaids turn their lights on to attract them to one of three available Starbucks stores right in front of the beach. Most stores are still quiet but every moment passes by a group of tourists continues to occupy from one table to another. By the late evening, Starbucks stores around this area are in full swing but there is no such business atmosphere. Everyone enjoys chatting peacefully to conclude a finest day in Bali Island. <Continue to read - click here>

Q3 2015 Apple Earnings:
The Best Third Quarter in History Thanks Again to China’s Massive Demand

Apple (NASDAQ: AAPL) on Tuesday after the market closed reported its third quarter earnings of $1.85 a share, beating the consensus estimates of $1.81. Revenue hit $ 49.6 billion, the best third quarter earnings in the history, or up 33 percent from the same quarter a year earlier while quarterly profit was also intact with $10.7 billion this quarter, making Apple’s cash and its equivalent position to the record $202.8 billion. During the months from April to June, the company sold 47.5 million iPhone units or up 35 percent from the same period a year earlier while the number of new Apple’s product lineup, Apple Watch, which started to hit the shelves in April, was not disclosed during the presentation. In the meantime, gross margin, a measurement of technology companies’ health, was 39.7 percent during the quarter and international sales accounted for 64 percent. Overall, Apple’s third quarter was solid. However, shares of Apple sold off more than 4 percent in the next day trading session as investors were once again concerned with future growth. <Continue to read - click here>

Starbucks in Ho Chi Minh City, Vietnam:
Green Mermaid Joins Asia’s Biggest Coffee-Oriented City

Motorcycle commuters never stop in front of the green mermaid whether their reasons are to go back home early after work or not. At 6 o’clock in the evening, Ho Chi Minh City’s traffics are in full swing and what you see on the streets are the hundreds of thousands of motorcycles pass by, from left to right or the other, along with some popular Toyota vehicles in between. Vietnam is not as wealthy as another socialist country, China, whose per capita GDP is nearly four times higher than the country, while both countries remain communist states, where three others: Cuba, Laos and North Korea, remain so as well. Starbucks started to settle itself in this lively city since the company opened the first store in 2013. Currently, there are 11 Starbucks stores available across Ho Chi Minh City, Vietnam’s largest commercial city. <Continue to read - click here>

What you all need to know about Chinese stock markets: Background

Chinese stock market is relatively young compared to the biggest stock exchange in the world, the New York Stock Exchange (NYSE), which opened in 1817, while the tech-dominant electronic market, NASDAQ, opened in 1971. There are two stock exchanges in China at this moment at Shanghai and Shenzhen. Shanghai Stock Exchange (SSE) opened on December 19, 1990 and Shenzhen Stock Exchange (SZSE) opened on July 4, 1991. As of 2012, there are 978 companies listed on SSE while 1,466 companies listed on SZSE. Both stock exchanges operate four hours a day from 9:30 to 15:00 with a 90 minute-break during lunch time Monday trough Friday except special holidays. The listing requirement for both exchanges vary but SSE is similar to NYSE style, which consists of large-cap companies, while SZSE is more similar to NASDAQ, which focuses more on young growth potential technology companies. <Continue to read - click here>

=> Skip to read "What you all need to know about Chinese stock markets: Price-to-Eearnings"
=> Or Skip to read "What you all need to know about Chinese stock markets: Market Inefficiencies"

Vanguard Total Bond Market ETF: Benefits of Investing in a Bond Basket

One of the finest ETFs (Exchange-Traded Funds) to have in your portfolio after SPDR S&P 500’s SPY is probably Vanguard’s Total Bond Market, as known as BND. As its name shows, this ETF offers exposure to U.S. investment grade bonds, such as corporate and government bonds. The beauty of owning BND truly comes from its ability to pay out dividends (or should say coupons instead) monthly. Yes, this is one of the few ETFs that pay out dividends monthly and this turns into your monthly income after taxes. Along with its monthly dividends, BND currently yields handsome 3.51 percent, well above SPY’s current 1.93 percent (as of May 30, 2015). In very general, bond is up when stock is down, vice versa. While most U.S. equity indices have been experiencing bull market over past years, BND can be a perfect fit into your portfolio when thinking of future potential downside on stock markets. <Continue to read - click here>

Apple and Starbucks in Chengdu, China: Fast Growing Largest Inland Economy

Chengdu, the capital of populous Sichuan province and home of the former Chinese Communist leader, Deng Xiaoping, as well as, of course, Pandas, is located about 1,000 miles west of Shanghai or a two hour high speed train ride from neighboring Chongqing. It is one of the largest cities in inland China in terms of population, but it is also one of the economically important cities in China. In the earlier last summer, United Airlines became the first U.S. carrier to fly a nonstop to Chengdu from San Francisco to meet travel demands between this inner city and the United States. Thanks to Untied, Chengdu has been more approachable than ever and this may be one of the confirmations that Apple and Starbucks have been enjoying their presence in this global city in inland. <Continue to read - click here>

Apple Q2 2015 Roundup: Another Solid Quarter Thanks to Chinese Demand

Apple Inc. (NASDAQ: AAPL) reported its second quarter earnings after the market closed on April 27. The company earned $2.33 per share, compared to the consensus estimate of $2.16. Net income topped $13.6 billion, making Apple’s cash position on its balance sheet worth $194 billion, while revenues were solid at $58 billion thanks to exceptional popularity of iPhone 6 and 6 Plus in China as well as Asia Pacific excluding Japan. Shipments of iPhone were 61 million units, up 40 percent from the same period a year earlier. Gross margin, tech companies’ profitability measurement, was 40.8 percent, the highest level since the 2012 third quarter. International sales reached 69 percent, the highest level in history. Overall, Apple delivered another solid quarter while the company declared more capital returns to investors, including an 11 percent rise in divided payout. <Continue to read - click here>

Is China Going to be the Biggest Market for Apple Watch?

During the initial day of Apple Watch previews at one of four Apple Stores available in Shanghai, China, the crowds from local residents to tourists continuously formed in a circle around the Apple Watch showcases moments by moments. While it is the long-awaited new cutting-edge product from Apple (NASDAQ: AAPL) for many of its funs across the globe, China is soon likely to be on the center stage for the $700 billion cap company. Apple’s sales in China, including Hong Kong and Taiwan, already accounted more than 20 percent of the total globally, compared to 23 percent from Europe and 41 percent from Americas. It is very likely that China’s overall sales will overtake Europe’s within next quarters as soon as the Apple Watch debut within coming days. <Continue to read - click here>

Apple and Starbucks in Chongqing, China: Price-Sensitive Inland Consumers

Chongqing, one of four central government-controlled municipalities in China, is located about 900 miles west of Shanghai and it is the mid-point of the 6,300 kilometer-long Yangtze River, which flows eastward all the way to the another municipality, Shanghai. The city is very populous with nearly 30 million people and its per capita GDP hits above 42,000RMB while Shanghai, for instance, has the population of 24 million and its GDP per capita more than twice higher at 90,000RMB. Despite Chongqing’s mid-income-leveled per capita GDP, which is inline with a nation-wide average, there are three Apple Stores and 12 Starbucks stores available to reach 30 million residents in the city as well as outsiders. <Continue to read - click here>

Apple Store in Hangzhou: Popularity of Apple Products in China

During the “Spring Forward” presentation at the Yerba Buena Convention Center on March 9, Tim Cook, Apple’s CEO, started off with introducing a newly-opened Apple Store in Hangzhou, China, while showing the great popularity of Apple’s products in the second largest economy across the globe. Hangzhou, the capital of Zhejiang province, is located about 100 miles southwest to Shanghai and the city is well known among domestic as well as international tourists for the historic West Lake. Only a few blocks off from the West Lake, the modern-looking Apple store stands elegantly, attracting thousands of customers each day. Apple’s success in China is real thanks to its modern brands that always impress growing upper middle-income Chinese consumers. Going forward, China’s consumption of Apple products will soon overtake wealthier Europeans’ and such demand will definitely help to push Apple to the first-ever a $1 trillion market-cap company. <Continue to read - click here>

Starbucks in Changsha, China: Growing Middle-Income Consumers

Starbucks (NASDAQ: SBUX), the largest coffee chain in the world, now focuses its business expansion on China’s inland while the number of stores hit 1,497 across the country (as of the end of 2014, excluding Hong Kong, Macau, and Taiwan). Cities in China’s inland are far different from the global cities, like Shanghai and Beijing, in terms of, for instance, the people’s tastes and income levels. Chinese people love drinking tea and you merely see they are sipping coffee, especially if you are on a long-distance train to or from an inner city. The income levels between the coastal cities and inner cities are far diverse as well. While you tend to see the enormous popularity of iPhones in Shanghai, you do see less iPhone users in inland. Despite the differences, Starbucks willingly joins inland cities and continues to attract the growing upper middle-income Chinese consumers. <Continue to read - click here>

Chinese ADRs: Is It Good to Buy Alibaba Shares?

While Chinese economy started to show its further slowdown last year, the Chinese-version of Amazon.com, namely Alibaba (NASDAQ ADR: BABA), debuted as the world’s biggest IPO ever in the history. Its value of the deal hit $25 billion while the IPO price was set $68 per share for the inaugural trading day of September 19th, 2014. By the time after the trading floor closed that day, the shares of Alibaba rose more than 38 percent to $94. <Continue to read - click here>

The Evidence of the Middle-Income Trap

Over the past few years, more and more articles from academic journals to business periodicals about the middle-income trap were published with more extensive empirical evidence. The problem of middle-income trap study was used to be a lack of empirical evidence but this problem has started to diminish. Before the financial crisis in 2008, not many economists believed about this trap and they intended to conclude the Asian miracle was over after the Asian financial crisis in 1998, rather saying they were trapped in the middle-income society. However, the word, “middle-income trap” began to widespread within the past year or even today thanks to China’s economic slowdown. <Continue to read - click here>

The Largest Government Pension Fund is Investing Overseas: Is it an Ironic Move for the Japanese?

In November 2014, Japan’s Government Pension Investment Fund (GPIF), the largest pension fund in the universe, rolled out its plan to expand asset purchases overseas. With $1.1 trillion assets under GPIF’s management, its planned exposure into oversea markets may become favorable over the U.S. equity markets.

According to the GPIF’s new asset allocation plan, its significance mainly comes from a huge cut back of the domestic bonds, which today accounts for 50 percent or about $550 billion value. <Continue to read - click here>

2014 Economics Universe Portfolio Performance

For the year ended on December 31, the Dow Jones Industrial Average climbed 1,382.07 points or 8.4 percent to 17,823.07, the near all time high territory in 2014, while the benchmark, the S&P 500, rose 226.92 points or 12.39 percent to 2,058.90 and the NASDAQ soared 592.98 points or 14.3 percent to 4,736.05 during the same period. A 12 percent rise of the market benchmark is considered to be a solid performance, especially amid the slowing global economy. <Continue to read - click here>

The Great Gatsby and the Stock Market in the 1920s

It is a good time to read back one of the affluent American literatures, The Great Gatsby written by F. Scott Fitzgerald, especially after the reproduced movie unveiled in a theater in 2013. The story illustrates the summer of 1922 when a bond salesman, Nick Carraway, who lived just right next to a mysterious millionaire, Jay Gatsby, narrated throughout the story along with his puzzling life.

1922 was the year that the Wall Street prosperity began when a massive rally in the stock and bond markets experienced and lasted until 1929.[1] The novel or the movie nicely represented the glorious years of the Wall Street. The 1929 stock market crash, which was not presented in the movie, is the notable Wall Street history. <Continue to read - Investment Bulletin>

How Do Stock Markets React when the Yield Curve Changes?

The yield curve, which is one of my favorite economic indicators, describes how the economy is doing right now and into the future. It is a collection of interest rates from the shorter maturities, such as treasury bills as known as T-bills, to the longer maturities, like 30-year government bonds.

This is probably the best economic indicator that you can utilize when learning today’s as well as future’s economy and the stock market movement. Personally, I would not have performed well on my investment portfolio during the financial crisis period if I did not know what the yield curve was. Unfortunately, a basic Economics class does not teach this yield curve in details, so does the intermediate Economics course, which not many students are willing to register unless they are majoring in Economics. <Continue to read - Economics Bulletin>

Diversification: Systematic Risk and Unsystematic Risk

Diversification is probably the first step that you want to start off when constructing your portfolio. You hear such sentence, “diversification is free lunch” while watching CNBC. Yes, you don't have to pay anything for that diversification (but maybe there are some additional commission fees because you have to make multiple transactions to compose that diversified portfolio).
<Continue to read - Investment Bulletin>

Apple's Dividend Growth and Power of Compounding

I have been a shareholder of Apple Computer (NASDAQ: AAPL) for many years while I started to collect dividends from Apple since August 2012. Apple is a typical tech company, which offers a decent growth from its business operation, and it is a favorite stock to watch and own among many fund managers across the globe. Fast growing tech companies rarely offer dividends to investors as they tend to focus on reinvesting the earnings into their research and developments. An iPhone marker, Apple, was used to be the company, which did not payout any dividends to investors.

In August 2012, Apple started to payout the dividends to investors for the first time (not actually the first time though) while investors claimed for the company’s huge cash position on its balance sheet. At that time when I heard the news, I could not believe that such a fast growing tech company paid out the dividends. On the other hand, I was excited to collect the dividends while I no longer needed to depend on Apple’s volatile stock price anymore. In fact, I have been very excited to receive the dividends from Apple every quarter, especially after shares of Apple was under pressure after the shares hit all time high at $700. <Continue to read - Investment Bulletin>

Power of Loyalty: My Starbucks Rewards Programs in China and Thailand
Mar. 15, 2014

My Starbucks Rewards program is probably one of well-known reward programs in the United States while Starbucks Coffee Company successfully has integrated into the mobile technology that we now live with. This reward program is now available outside the United States, but it is available in limited countries. Starbucks China started the program in 2012 while Starbucks Thailand just kicked off the program on February 4, 2014. In this article, I would like to show the differences between My Starbucks Rewards programs in China and Thailand. Since both countries are located in Asia and their income levels on average are pretty much similar today, it probably is good to compare between them. <Go to Economics Bulletin>

It is time to uncover how today’s world economy really looks like. Economics Bulletin is here to offer many economy-related articles that you can apply to your nearby economy.

Economics Bulletin

U.S. Federal Funds Rate
2001 - 2016

Source: Board of Governors of the Federal Reserve System www.federalreserve.gov

Starbucks and Economy

Starbucks in Shanghai, China:
Modern Shanghainese Favorite Third Place

Starbucks in Khon Kaen, Thailand:
Green Mermaid Will Soon Shine Next to Golden Arch

Starbucks in Ho Chi Minh City, Vietnam:
Green Mermaid Joins Asia's Biggest Coffee-Oriented City

Investment is the way to increase your wealth. Investment Bulletin makes your investment strategy easier through easy-to-read articles.

Investment Bulletin

Articles on Investment

How to Beat the Market?

Diversification: Systematic Risk and Unsystematic Risk

Apple's Dividend Growth and Power of Compounding

PE Multiple Analysis: How to Determine the Future Stock Price?

The Great Gatsby and the Stock Market in the 1920s

China is the engine of the world economy and knowing the second largest economy in the world is the key to understand this global economy. China Bulletin unveils what today’s China really is.

China Bulletin

Articles on China

What you all need to know about Chinese stock markets:

=> Background
=> Price-to-earnings
=> Market inefficiencies

Without studying the subject of economics, today’s economy is hard to be uncovered. Academic Bulletin is the place where you can learn economics theoretically and mathematically.

Academic Bulletin

What is Middle-Income Trap?

The Evidence of the Middle-Income Trap

To visualize how today's economy looks like or stocks behave, Data in Universe offers you graphs and figures established through various sources.

Data in Universe

Apple and Starbucks in Chengdu, China: Fast Growing Largest Economy

Apple and Starbucks in Chongqing, China: Price-Sensitive Inland Consumers

Economics Universe
Portfolio Performance

2015 Economics Universe
Portfolio Performance
19.80%
v.s.
-0.73% S&P 500

2014 Economics Universe
Portfolio Performance
13.15%
v.s.
11.39% S&P 500

2013 Economics Universe
Portfolio Performance
31.27%
v.s.
29.60% S&P 500
-> How to Beat the Market?

Useful Investment Strategies

Beating the market

Diversification

PE multiple analysis

Power of compounding

Rule of 72

PE Multiple Analysis - How to Analyze the Future Stock Price?

There are many ways to analyze what stocks to buy and sell. One of the easiest ways to analyze is probably a PE multiple analysis. The PE multiple analysis allows you to predict a future price of a stock as well as its current valuation.

A stock price is simply composed of its earnings and the multiples. By equation:

P = E x M
P: Stock price
E: Earnings or EPS
M: Multiple or PE

When you look up Yahoo! Finance or Bloomberg, you will always see these numbers while you hit your favorite ticker code. You may not see “E” unless you go to owner’s equity in a company’s financial statement. <See Investment Bulletin>

How to Beat the Market?

Performing ahead of the market benchmark, in this case the S&P 500, is not easy to achieve, especially if you continue to do so every year. Many fund managers every year are tying to beat the market but many of them fail to outperform. That is one of the reasons that many individual investors own the basket itself, such as SPY, which contains all the S&P 500 stocks and keeps up with the benchmark. What if investors can outperform the benchmark? It is an opportunity that you can make more money than the market, which is the best outcome for them. <Continue to read - click here>

Past Articles

List of all the works cited and resources

Resources

What is Yield Curve? (Original article: How Do Stock Markets React when the Yield Curve Changes?) February 1, 2019Akira Kondo

Q1 2017 Apple Earnings: All-Time-High Revenues and EPS, Growth is Back Again February 1, 2017

2016 Portfolio Summary: Winning Streak Finally Ended, Still Another Solid 7.20% ReturnJanauary 3, 2017

Q4 2016 Apple Earnings: No Surprise, 2016 Earnings Behind, Is Growth Back Again?​October 27, 2016

Starbucks and Shenzhen, China: Green Mermaids Catch up with the Fastest Growing Economy in ChinaSeptember 3, 2016

​Shenzhen Airlines: This Regional Airline Rapidly Expanding Its Network Globally from New SZX September 3, 2016

Power of Loyalty: My Starbucks Rewards Programs in China and ThailandMar. 15, 2014

Popular Article on Economy

U.S. Federal Funds Rate2001 - 2016

Starbucks and Economy

​Starbucks in Khon Kaen, Thailand:Green Mermaid Will Soon Shine Next to Golden Arch

Articles on Investment

Articles on China

More Articles on Apple

Economics Universe Portfolio Performance

﻿﻿Useful Investment Strategies ﻿﻿

What is Yield Curve?
(Original article: How Do Stock Markets React when the Yield Curve Changes?)
February 1, 2019
Akira Kondo

Q1 2017 Apple Earnings: All-Time-High Revenues and EPS, Growth is Back Again
February 1, 2017

2016 Portfolio Summary: Winning Streak Finally Ended, Still Another Solid 7.20% Return
Janauary 3, 2017

Q4 2016 Apple Earnings: No Surprise, 2016 Earnings Behind, Is Growth Back Again?
October 27, 2016

Starbucks and Shenzhen, China: Green Mermaids Catch up with the Fastest Growing Economy in China
September 3, 2016

Shenzhen Airlines: This Regional Airline Rapidly Expanding Its Network Globally from New SZX
September 3, 2016

Power of Loyalty: My Starbucks Rewards Programs in China and Thailand
Mar. 15, 2014

U.S. Federal Funds Rate
2001 - 2016

Starbucks in Khon Kaen, Thailand:
Green Mermaid Will Soon Shine Next to Golden Arch

Economics Universe
Portfolio Performance

Useful Investment Strategies