Product > Global Economic Model - Oxford Economics

Advantages Of Sharing Economy

Advantages Of Sharing Economy
https://preview.redd.it/10x1ooew6lx51.png?width=1252&format=png&auto=webp&s=bec4581754a555da1a61510c2e23f0a88cab21da
Professional economists have long since realized that renting is better than buying. A few years ago it became apparent to the regular consumer. Amid the phenomenal success of such services as Airbnb and Uber, people started talking about “uberizing” consumption. Unbridled consumerism is replaced with conscious consumption, and the new economic model fits the value system in the best way possible.
Sharing has a number of obvious advantages:
• flexibility; • independence; • financial benefit; • careful attitude towards resources; • mutual trust.
TimeCoinProtocol is making the sharing economy even more accessible and transparent for users! If you want to support the project that will invariably change our future — don’t forget that on the 11th of November 2020 the project launches the IEO on BitForex.
https://www.timecoinprotocol.com/
submitted by TimeCoin_Protocol to u/TimeCoin_Protocol [link] [comments]

Need advice/direction/understanding please!

Hello! I am new to the general spectrum of e-commerce and passive income. This will be a relatively long post, so you can understand my situation. I am 18 years old and live in a dorm at Georgia State University in downtown Atlanta. I'm interested in passive income, because a life goal of mine is to be financially sustainable without that dreadful and desperate struggle to stay afloat. I've worked in a restaurant/bar and Chick-Fil-A. I like to take opportunities to grow and I'm an extremely hard worker who's tackled many personal challenges, but these experiences always ended up d r e a d f u l for my mental health. I wish I could adapt to the physical job norm, but my personality strengths don't align with that particular field. I am currently studying business at Georgia State and have a good head start. I also have a good amount of savings in my bank account, setting me up for my journey. I am hoping to have some form of reliable income by the end of the school year in May. I have a passion to devoting myself to this work ONLY if it pays. This situation could be even more perfect for me considering my girlfriends dad owns his own small marketing company and has some decently large clients. My girlfriend's parents are also great friends with a man who literally went from dirt poor to being able to support a large family and more through marketing and he owns his own company and offers marketing internships from his company to GSU students.
To reiterate, I have nothing but time, savings, and extreme hard work to make passive income pay off and there is nothing I want more than that financial freedom from terrible jobs for people my age. I will devote my time, but only if it is worth it.
Here is where I need help. I don't want to end up spending all my money instead of using it for larger gain. I'm all for using money to grow, but I don't know where to go from there. Where should my research and time be allocated in this case? I've researched hours and hours of different sources such as Forex day trading (even my friend is making decent profits with Forex from some like $200 dollar course?!?!), and drop shipping, but seem to hit a brick wall with how much I know on the subject. Do I sacrifice more hours learning youtube and various different forms or income, or do I sacrifice more hours in one particular course or subject? I am VERY on the fence when it comes to these kinds of decisions, only because I want to make the right one. I'm fine with slowly losing a little money to gain experience, but a payment like that sure seems like a leap of faith(right?). I don't necessarily understand how to explain this business model either. I feel scared to talk about it because I understand how the profits occur, but it is the difficult talents you must possess that I do not have. I want to be able to talk about my business pursuit with my parents and have full knowledge and confidence in that what I'm doing is right. The businesses you can start through passive income are possible to be profitable, but how often does that happen and is it REALISTIC that my time I invest into this is worth it? I would hate to throw away a fantastic economic opportunity. I just need to know what direction I should be going towards considering my connections and situation. I lack the confidence to jump in, as I understand I must gain more knowledge. Another issue I face is I need to know where my knowledge and studying should be allocated. I need to know what works and how I can get there. I believe I am capable of anything as I am an extremely high achiever and have always worked hard on the things I'm passionate about. Thinking about my loved ones I'm doing this for only motivates me more and I want to prove to others that I can persevere.

If you read this entire thread.. thank you so much for your time. I promise you you've found the correct and capable person, but where do I go from here? I don't mean to sound cocky in any way shape or form, as I am just very ready to take initiative of my extra time so I don't wait around until I get a potentially crap job with low pay. I appreciate this community and I'm looking forward to hopefully getting to build connections and grow.

Lastly- I would love links, video advice, emails, and anything else to help out my education on this!
Again, thank you so much and have a wonderful day.
submitted by Environmental_Spot63 to passive_income [link] [comments]

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Modern economic environment, being forced by the total digitalization of all segments of business, challenges new investment approaches. Traditional evaluation models like DCF do not work. Businesses are being evaluated by very different approaches, such as real option evaluation approach, Merton formula, using stochastic Wiener processes towards evaluation. Sometimes we observe irrational investors’ behavior, when they evaluate perspectives of some businesses: shares of many new wave companies are flying tothemoon without any rational explanations of their business models. Due to traditional evaluation methods such companies must have negative shares price! What we must learn from this experience, is that our world has changed dramatically. Zero discount rates by the central banks and infinite liquidity lead to negative bank deposit rates: you need to pay money just to keep it safe! Due to asymmetric information on the financial markets, non professional investors usually make adverse selection: they invest their funds into big long run scam projects, pretending to be big fair businesses. Theranos, Nikola, SKYWAY, Softbank, ONECOIN, BitClub and many others are among Bernard Madoff like financial pyramids pretending to be serious businesses.
Due to informational hype all around, it is very hard to make a right choice of investment. New hype trains, like crypto, blockchain, artificial intelligence today looks like toy for geeks, but not for serious investors. Inflows of «stupid money» arrive to all those wealth redistribution factories and transform to lambos, yachts, cocaine and booze for hipsters, while investors just get useless shitcoins and dreams of a new «unicorn». Everyone wishes to catch up a new next APPLE or MicroSoft at an early stage. Same story happened several years ago when we were observing big previous bubble called «dotcom bubble». Only several companies survived, others sunk with tons of investors’ money. LETS STOP IT! INVESTORS MUST EARN! There are many money earning opportunities around, both overhyped, like crypto, blockchain, artificial intelligence, DEFI, as well as more conservative, but still very profitable, like intellectual garbage recycling or production of intellectual power supply units. Our mission at BTM fund is to connect smart money with profitable businesses, seeking for the blood - strategic funding from smart investors, for whom they gonna bring good stable profits!
BTM fund is the hybrid new generation investment fund, which is created by high level professionals with many years experience and proven track record on the stock and currency market, forex, cryptocurrency market and traditional investment business. BTM headquarters is located in London, also there are representative offices in Moscow and Kiev. Also we are planning to open offices in Dubai, Istanbul, New York, Kazakhstan and Uzbekistan.
Against the background of impending global economic crisis, which is well seasoned by the Major Brand of the Year 2019 - 2020 - COVID19, there is no safe heaven any more. All stock markets and financial indexes are on their tops, obviously we are observing big financial bubble, which can burst any time. Astronomical figures of the USA state debt and many other emerging economies lead to soft monetary policy: there is much cheap money, but no good investment opportunities, which can create added value. Flexible solutions of hybrid investment fund BTM provide its clients to manage their funds efficiently.
The key unique feature of our investment fund is instant diversification of investment programmes. «Let the profit leak and cut the losses» - this is the core principle of our investment strategy. Our professional financial managers do always have a finger on the pulse of modern trend in the investment environment. Today we are surfing on the hype waves of defi, crypto, blockchain, AI, and tomorrow we reallocate assets into top American stocks, gold, bonds, cash, or invest into high yielding real busin
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Theta gang ain't shit.

Now's a good time for to get a lesson in the greeks you fucking retards. This document outlines the relative risks and rewards of certain trading strategies and how to manage risks along with some basic math and econ. This should be basic for most of you.
Why do stocks go up?
Because capital growth has a diminishing returns to scale. In the long run capital is used to create more capital generating growth until it balances with capital depreciation which is linear. You can increase the equilibrium capital accumulation by increasing savings rates essentially trading off short run consumption for long run consumption. The implications of this are that less capital intensive economies grow at faster rates than developed because developed economies are very close to hitting the equilibrium point and have to rely on technological advancements for long run growth. Not every economy is equal though, all have differences in economic institutions, government effectiveness and political norms which will also affect their long run effectiveness. Long story short if the government engages in ineffective policies like protectionism, price manipulation, overly burdensome regulations, underregulation, or inefficient redistribution programs the short run micro/macro picture will be hurt and reflected in the long run picture. The US has had a thriving stock market despite having relatively low growth because it has taken the first mover advantage in many industries. Global Tech, higher education, finance, and pharma are all centered in the US because the US policies have made doing business in the US the optimal choice for these industries. For as long as the US is a capitalist nation you can be sure that the stock market will go up in the long run. This is not necessarily the case for commodities or forex as higher growth has typically led to investments in productive efficiency outweighing increased demand in raw materials and exchange rates do not have a long run trend. Fundamentally, the stock market is a good place to invest savings into in the long run.
Stocks and exponential returns.
Stocks go up so you want to capture the value of price increases. Stocks have a delta of one and a gamma of zero resulting in a linear return to movement of the stock price. Long run capital accumulation, although diminishing, is still exponential and in the long run will return an exponentially increasing return to investment on stock. Linear gains * exponential increase in underlying = exponential gains. But what if things go down? In the short run stocks decrease in value at exponential rates which is absolutely fantastic for investors because exponential declines are diminishing in scale. 10% of 100 is 10, 10% of 90 is 9, 10% of 81 is less and so on and so forth. You may get linear returns from movement but you receive increasing returns to scale gains on the upside and decreasing returns to scale losses on the downside.
Delta and Gamma
Long options have even better fundamentals than stocks because they amplify the exponentiality through gamma. As an option moves into the money its delta increases creating exponential gains in value. As an option moves out of the money delta decreases, lowering losses. Thus options while having more risk per dollar than stocks have far superior risk returns in the short run.
Theta and Vega
The opposite is true of selling a call and you're put into the position of wanting to sell when times are most dire and hold when times are good. In exchange you get benefit from theta decay but if you can reasonably predict the movement of the market that's pretty much nothing compared to the gains from delta you could get investing the same amount of money into long calls. Selling also requires way more money further reducing its risk to return. But what about vega? When markets crash, volatility skyrockets. Long calls gain and the opposite is true once again for selling them.
Mathematically, buying longs has the best return on risk of any option strategy but higher absolute losses when delta doesn't move in your favor. Selling longs or spreads has a way worse return to risk but you'll lose less money when delta moves against you and it's harder for any one position to lose all of its value.
Theta gang isn't more profitable than bullgang, it's less risky per dollar spent. The reason market makers don't play like WSB retards is because they play on margin and the 20-30% losses we typically take and make back buying longs would cause their investors to flee bankrupting them.
Strategy implications
Longs
Selling naked longs
Credit spreads
Debit spreads
Edit: For what to do with your cash position, you could put it into gold, bonds, bond etfs, non spy correlated stocks or whatever. Low risk theta gang strats are fine in bull markets but don't expect to make real money from them. I'm cash since volatility is high, u do u.
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[Econ] Can You Not Die For One Second?

[M] This meme I made describes how I feel right now, why can’t my economy just be normal and just function, very upsetting. [/M]
The Russian economy is in freefall, which is quite an unfortunate problem to say the least. After experiencing minor growth for the past two years, the economy has decided to kill itself, which can be quite an issue when unemployment skyrockets to 22%, and the value of the rouble drops faster than Saudi Arabia’s chance of not being stuck in an eternal civil war. Taking experience from the 2008-2009 and the 2014-2017 Russian financial crises, we are well prepared to restore economic order to the country. This must be done quickly, as the longer we stall around, the more our people shall suffer, and the odds of escaping this pit of economic despair shrink. To escape this financial crisis, there are three main fields that need to be addressed extensively to prevent the economy from detonating on itself. The first field being social welfare and the lives of the people within Russia. With unemployment at 22%, the people of Russia will be suffering, and if we are to emerge from this crisis, we need to work with them and ensure their safety and wellbeing to recover faster. The second field is the rouble, and the general state of the economy. The value of the rouble has skyrocketed, and inflation is running rampant, which if this is allowed to continue, will decimate our economy even more, so this must be brought under control as soon as possible. Furthermore, many businesses and factories in the country have slashed employees and have almost gone out of business themself, so drastic action needs to be taken there. Finally, the final field being the roots of the crisis, corruption, and the sanctions on Russia from the west. The roots of the problem need to be pruned so that a disaster like this never happens again.
Russia is stuck between a rock and a hard place right now, but this is our trying moment. If we emerge from this disaster, we will come out stronger than ever before, and will become closer as a country, showing that Russia is the only way forward. Through cooperation between the people and the government, we will make it through this crisis.
Field One: Welfare
One of the key fields of this crisis that needs to be addressed is the welfare of the people. Unemployment is at a record 22%, and this must be addressed before anything else can be done. With this many people unemployed and not able to get jobs, this will cause havoc all across Russia as people will struggle to make ends meet in terms of living their lives. To counteract the immediate issues that this will cause, food, shelter, and other amenities for people need to be secured and guaranteed. First off, guaranteeing food for all people who are unable to afford it or acquire it while being unemployed. In recent years our production of all agricultural goods has skyrocketed due to the introduction of GMOs, so we can provide government “soup kitchens” for the unemployed to come and reliably get food. The government will provide the farmers with money for their crops, and in return the food can be placed into these free places for people to eat, therefore avoiding the concern of people starving. Housing will not be as critical of an issue, as there is state housing available, but it is limited in capacity, so something must still be done. This issue can be solved with the issue of unemployment, which I will elaborate on further. Essentially, new state housing will be built in all places that need housing for the unemployed, and this can provide temporary residences for the people to stay out of the elements when the time comes. As for things like health care and such, these are provided by the government, and due to the recession, funding for them will be raised to account for the inevitable rise in human needs.
To place a major dent in the issue of unemployment, much with what the United States did during the 1930s during the Great Depression, we will be taking a leaf out of their book and creating a plethora of new programs. The major program however, will be the program known as Rehabilitation Russia, which will revolve around infrastructure improvements all across Russia, and constructing new buildings as well. This ties into building new state housing, and draws inspiration from the programs from the American New Deal in the 1930s, namely the Works Progress Administration, Civilian Conservation Corps, and the Public Works Administration. All of these programs focused on providing work to unemployed people, and working on infrastructure around the country. This same principle can be applied in Russia, hopefully to the same degree of success. The temporary jobs granted through these programs can provide enough time for the factories that these people were laid off from to be up and running again. With all of this in place, this can grant additional benefit to Russia while also ensuring that these people do not go without jobs. While not everyone will get a job from these programs, it will stem the major flow of unemployment for the meantime, and hopefully grant enough time for the major sources of employment to reopen.
Additionally, for those who are unemployed, the current unemployment benefits are nowhere close to being enough to allow a person to survive. Per month currently, each person only gets around 12-80$ of unemployment money, which is insultingly low. In this recession, with a large number of people in unemployment, this number needs to be increased drastically. To aid the people who are unemployed, the minimum amount of money that can be granted per month will be raised to $150 USD, and the maximum will be raised to $960 USD, which depends on the lifestyle of each person. Someone who has a large family will receive the larger benefit, and someone who is alone will be granted the smaller funds. By raising the unemployment benefits for the recession, this will allow for the people of Russia to still be able to actually survive during these uncertain times.
The funding needed for this will come from slashing other budgets across the scale, and from loans from the Central Bank of Russia. These loans, of course, will be eventually repaid once the recession is over, but something must be done in the meantime to provide the people with a form of welfare and the means to survive.
Field Two: The Economy:
The rouble is in freefall, and the economy is about to be hit by a large train of shinkage, which is quite an issue to summarize. The first thing that must be done for the economy will be to stabilize the rouble. To stabilize the rouble, just like in 2014, the Central Bank of Russia will withdraw $5 billion USD to purchase roubles in the Russian economy to work on stabilizing the currency. Due to the large reserves of the Russian Federation, this can easily be accomplished, and should be more than enough towards stabilizing the rouble. This being done will go a long way towards climbing out the recession, as the stabilization of the rouble will bring back confidence in the economy. To help revive the economy, a government bailout program will be the way that the economy is saved. Russia has extensive reserves of foreign currencies (henceforth referred to as forex reserves) that we have been saving for an event like this for sometime, and now is the time to use them. While $5 billion USD from our forex reserves is being spent to prop up the rouble, this will not be enough to stabilize the economy totally. Therefore a bailout program on a massive scale is required, and the estimated total cost of the government program is $200 billion USD. Around $100-150 billion of this can be gained domestically through raising the VAT and other taxes, while also dipping into our forex reserves and slashing the budget of other ministries. The rest of this money, however, will be given as a bailout loan from the IMF, depending on how much they are willing to give us. This government bailout will be critical to prevent the entire country from entering further economic collapse, and will give us a swift rebound. Where the money goes for the bailouts, however, will be very important as the money is limited as to where it will go. Therefore the money will mainly be focused on reopening factories and bringing back old job positions before the recession. Furthermore, money will also be needed to bailout other important companies that went under in the recession, so focusing on other businesses other than manufacturing is also important, as more places other than that went under. Small businesses in particular are quite important as large numbers of them went under during the crisis, so further bailouts for them are needed. The money will be divided as follows, $100 billion towards manufacturing bailouts as this sector of the economy was the hardest hit from the recession, $50 billion for small businesses, as they were also hit particularly hard, and $50 billion for other sectors of the economy that were hit, but not as hard as the previously mentioned ones. Through these targeted bailouts and financial measures, this should stem the flow from the recession. These measures emanate those from both the 2008-2009 and the 2014-2017 financial crises, and things that worked then will work now.
Acquiring the funding for the bailouts domestically, however, will be difficult, and drastic measures must be taken to ensure this. The value added tax in Russia in particular will be raised from 20% up to 27% for the foreseeable future until the financial crisis has passed, and then past then it will be restored to the normal levels. In particular, the taxes on natural resource extracting will be raised up 2% from whichever level it was previously (this is done because the rates fluctuate for each resource and I don’t want to spend 3 hours writing down each and every one). Through both of these specific taxes being raised, the money from this will be enough to enable the bailout measure to be mostly be funded domestically, rather than through IMF loans. The raising of these taxes is only a temporary measure, and once the recession is over, they will go back to their standard levels so as not to make our citizens' lives even more difficult.
Field Three: The Roots of the Crisis
Despite having extensive measures to stop a crisis like this from even happening, they were not enough to escape the roots of the problems that led to this happening. Corruption and sanctions from the EU were the drivers of this entire recession, and something must be done to combat each and every one of them. No more measures to just delay the inevitable, these issues all right here stop this year, or the next year, Russia will no longer play victim towards the whims of the roots. Action will be taken, and these issues will cease to exist.
Corruption is something that Vladimir Putin has already touched upon at an earlier time, but this time more must be done. Anti-corruption courts were already empowered, and corruption in various different sectors of the government was dealt with to remove the epidemic of bribery that existed within the country. However, one part of corruption that has not been dealt with was tax fraud and tax evasion, which now more than ever is something that needs to be clamped down on. Following the model of the United State’s Internal Revenue Service (IRS), we can mimic their actions to catch those who attempt to deprive the government of their taxes. Russia has a right rate of tax evasion and tax fraud, and by checking over reports sent by their employers and other third parties, and comparing it to their taxes, we can catch people who commit tax fraud. This is an issue that Vladmir Putin feels strongly about, so he will be personally expecting results from this now, and in the future. By attacking those who commit tax fraud and tax evasion, we can also provide the government with more revenue that is sorely needed at this time.
Sanctions from the EU, however, have already been lifted significantly, and this will serve as the rallying cause for our economy. With the aid of European trade coming in, this can serve to assist our economy in climbing out of the recession. While this is not agreeable for our policy, this is something that must be done to ensure the economy does not suffer anymore than it has to. In the future, once the recession is over however, Russia will return to its former strength and prosper once again.
Government interventions into the recession that are swift and precise can help bring about an end to this recession sooner and better. Following methods that worked during the last recessions and financial crises, Russia can escape this calamity stronger than before.
submitted by ForeignGuess to Geosim [link] [comments]

TSM and Me 2020

TSM has been on my radar since I started saving to invest in 2018 because of AMD / GlobalFoundries. Really interesting business model for Semis AMD has.
In 2019, you couldn't get away from heating up of the trade war. Congress began debating SAR for HK around the end of Hong Kong's "2019 Summer of Love" and rumors of what happens in the "re-education" camps / "Where did the Falun Gong practitioners go?" This is important because of the SWIFT system of world banking. HK is how they get dollars.
Then in November of 2019, this happened..
https://en.m.wikipedia.org/wiki/Hong_Kong_Human_Rights_and_Democracy_Act#Related_bill
Arizona plant news is where the tin foil ends and the conviction began for me. The Foundry is basically THE corporation of Taiwan. The Great Cheetoh has been making deals around the world, and technically Taiwan isn't China. We have recent armament deals with Taiwan and Japan to prove it.
https://youtu.be/TLKt9yPb-f0
Why not?? Seemed like the American thing to do and there is a republican in office hell-bent on decoupling US communications tech from the CCP aka ROC.
In Feb / March... Rona. April the economic fallout, news about bad PPE and tests from China being sold to Italy. In May all the US boats in Taiwanese waters and the rhetoric worldwide basically reflecting that the world isn't happy with the CCP.
I had the balance for a RH call and it made more sense than an airline play at the time, so i got in.
Anti CCP rhetoric started heating up and bi-partisan on the YouTube's, by the way, it seems 2020 is the year NBC (Comcast) discovered ad-revenue. Thank you Lester.
At this point morning wood for TSM was a regular thing, so i set my limits on call options for both accounts, and incorporated into the LT DRIP. Thank you Papa Powell. I'm still poor, couldn't have done it without you...
Then it seemed to be heating up at the end of May. Everyone is like WTF 'mate on the "One Belt. One Road." Initiative, both the geographical and digital. People are really starting to report on not-so-great stories out of China, and not just tinfoil or Epoch Times channels.
Lot of shade being thrown on China tech, and things are heating up in S China Sea.
https://youtu.be/6KiLhxgIBys
https://youtu.be/BTgDYhtr-LU
...looks like Chy-na is on everyone's shit list, including Australia. Forex folks know how dope-tied the Aussie's and Kiwis are to CCP trade relations.
The rumor was potential decouple from China. I mean the world is kinda dope-tied to Santa's little elves. I just realized how weird Christmas will be...
I bought my shares for both accounts as per the voodoo ritual of purchasing at least 1 stock of a long term call strategy. Got my hand deep (for me) in the cookie jar May and June.
http://imgur.com/gallery/xb7ptte
http://imgur.com/gallery/ToFdT3z
Third week of July called a bull flag on hourly:
https://www.reddit.com/wallstreetbets/comments/hwz949/daily_discussion_thread_for_july_24_2020/fz4bi1b?utm_medium=android_app&utm_source=share
July 24th, I got filled to the teeth in RH and my now free play in Webull was up 1,600%.
http://imgur.com/gallery/0fB3FEp
THEN July 27th, I closed my "free play" in Webull at $1,250. A little over 3,000% between 2 contracts that cost $75 total.
Along the way, i picked up RH tendies and rebalanced the cash / bought more contracts and shares. They're officially part of the DRIP.
http://imgur.com/gallery/UFKPnOz
Related post I made last week regarding TSM and INTC. Any thoughts on how US semi production will play out for them?
https://www.reddit.com/wallstreetbets/comments/i0jqtu/opinions_on_taiwan_semiconducto?utm_medium=android_app&utm_source=share
Last week, The Fool confirmed many of the LT bias I had been building up on a win for The Foundry since November. All hype, or real talk?
https://www.fool.com/investing/2020/07/31/3-tailwinds-are-lifting-tsmcs-stock-to-new-all-tim.aspx
Financial analysis- This guy is boring af, but he goes through the numbers that no one likes to read, records in mobile, and is cool enough to zoom in on what he is talking about.
https://youtu.be/wVxF7wwuogo
Can anyone see a downside other than "COVID CLAP Trumps all"? Maybe I've been chewing too much YouTube tinfoil on lunch, but the limit orders that are closing 930-4pm are making me think I've hit the Autistic Lottery. Wish I had bought more.
Friday, all I could see was a bull flag on the 4hr and 30min charts. Monday 8/03 it hasn't shit the bed at 11am EST. Maybe thats just the tin foil talking again and this is the ceiling.
http://imgur.com/gallery/nRYKBB5
Still in, and potentially interested in more contracts.
Open positions- http://imgur.com/gallery/naF9dik
submitted by aipipcyborg to wallstreetbets [link] [comments]

When will we bottom out?

PART 2 : https://www.reddit.com/wallstreetbets/comments/g0sd44/what_is_the_bottom/
PART 3: https://www.reddit.com/wallstreetbets/comments/g2enz2/why_the_printer_must_continue/
Edit: By popular demand, the too long didn't read is now at the top
TL;DR
SPY 220p 11/20
This will likely be a multi-part series. It should be noted that I am no expert by any means, I'm actually quite new to this, it is just an elementary analysis of patterns in price and time. I am not a financial advisor, and this is not advice for a person to enter trades upon.
The fundamental divide in trading revolves around the question of market structure. Many feel that the market operates totally randomly and its’ behavior cannot be predicted. For the purposes of this DD, we will assume that the market has a structure, but that that structure is not perfect. That market structure naturally generates chart patterns as the market records prices in time. We will analyze an instrument, an exchange traded fund, which represents an index, as opposed to a particular stock. The price patterns of the various stocks in an index are effectively smoothed out. In doing so, a more technical picture arises. Perhaps the most popular of these is the SPDR S&P Standard and Poor 500 Exchange Traded Fund ($SPY).
In trading, little to no concern is given about value of underlying asset. We concerned primarily about liquidity and trading ranges, which are the amount of value fluctuating on a short-term basis, as measured by volatility-implied trading ranges. Fundamental analysis plays a role, however markets often do not react to real-world factors in a logical fashion. Therefore, fundamental analysis is more appropriate for long-term investing.
The fundamental derivatives of a chart are time (x-axis) and price (y-axis). The primary technical indicator is price, as everything else is lagging in the past. Price represents current asking price and incorrectly implementing positions based on price is one of the biggest trading errors.
Markets ordinarily have noise, their tendency to back-and-fill, which must be filtered out for true pattern recognition. That noise does have a utility, however, in allowing traders second chances to enter favorable positions at slightly less favorable entry points. When you have any market with enough liquidity for historical data to record a pattern, then a structure can be divined. The market probes prices as part of an ongoing price-discovery process. Market technicians must sometimes look outside of the technical realm and use visual inspection to ascertain the relevance of certain patterns, using a qualitative eye that recognizes the underlying quantitative nature
Markets rise slower than they correct, however they rise much more than they fall. In the same vein, instruments can only fall to having no worth, whereas they could theoretically grow infinitely and have continued to grow over time. Money in a fiat system is illusory. It is a fundamentally synthetic instrument which has no intrinsic value. Hence, the recent seemingly illogical fluctuations in the market.
According to trade theory, the unending purpose of a market is to create and break price ranges according to the laws of supply and demand. We must determine when to trade based on each market inflection point as defined in price and in time as opposed to abandoning the trend (as the contrarian trading in this sub often does). Time and Price symmetry must be used to be in accordance with the trend. When coupled with a favorable risk to reward ratio, the ability to stay in the market for most of the defined time period, and adherence to risk management rules; the trader has a solid methodology for achieving considerable gains.
We will engage in a longer term market-oriented analysis to avoid any time-focused pressure. The market is technically open 24-hours a day, so trading may be done when the individual is ready, without any pressing need to be constantly alert. Let alone, we can safely project months in advance with relatively high accuracy.
Some important terms to keep in mind:
§ Discrete – terminal points at the extremes of ranges
§ Secondary Discrete – quantified retracement or correction between two discrete
§ Longs (asset appreciation) and shorts (asset depreciation)
- Technical indicators are often considered self-fulfilling prophecies due to mass-market psychology gravitating towards certain common numbers yielded from them. That means a trader must be especially aware of these numbers as they can prognosticate market movements. Often, they are meaningless in the larger picture of things.
§ Volume – derived from the market itself, it is mostly irrelevant. The major problem with volume is that the US market open causes tremendous volume surges eradicating any intrinsic volume analysis. At major highs and lows, the market is typically anemic. Most traders are not active at terminal discretes because of levels of fear. Allows us confidence in time and price symmetry market inflection points, if we observe low volume at a foretold range of values. We can rationalize that an absolute discrete is usually only discovered and anticipated by very few traders. As the general market realizes it, a herd mentality will push the market in the direction favorable to defending it. Volume is also useful for swing trading, as chances for swing’s validity increases if an increase in volume is seen on and after the swing’s activation.
Therefore, due to the relatively high volume on the 23rd of March, we can safely determine that a low WAS NOT reached.
§ VIX – Volatility Index, this technical indicator indicates level of fear by the amount of options-based “insurance” in portfolios. A low VIX environment, less than 20 for the S&P index, indicates a stable market with a possible uptrend. A high VIX, over 20, indicates a possible downtrend. However, it is equally important to see how VIX is changing over time, if it is decreasing or increasing, as that indicates increasing or decreasing fear. Low volatility allows high leverage without risk or rest. Occasionally, markets do rise with high VIX.
As VIX is unusually high, in the forties, we can be confident that a downtrend is imminent.
– Trend definition is highly powerful, cannot be understated. Knowledge of trend logic is enough to be a profitable trader, yet defining a trend is an arduous process. Multiple trends coexist across multiple time frames and across multiple market sectors. Like time structure, it makes the underlying price of the instrument irrelevant. Trend definitions cannot determine the validity of newly formed discretes. Trend becomes apparent when trades based in counter-trend inflection points continue to fail.
Downtrends are defined as an instrument making lower lows and lower highs that are recurrent, additive, qualified swing setups. Downtrends for all instruments are similar, except forex. They are fast and complete much quicker than uptrends. An average downtrend is 18 months, something which we will return to. An uptrend inception occurs when an instrument reaches a point where it fails to make a new low, then that low will be tested. After that, the instrument will either have a deep range retracement or it may take out the low slightly, resulting in a double-bottom. A swing must eventually form.
A simple way to roughly determine trend is to attempt to draw a line from three tops going upwards (uptrend) or a line from three bottoms going downwards (downtrend). It is not possible to correctly draw an uptrend line on the SPY chart, but it is possible to correctly draw a downtrend – indicating that the overall trend is downwards.
Now that we have determined that the overall trend is downwards, the next issue is the question of when SPY will bottom out.
Time is the movement from the past through the present into the future. It is a measurement in quantified intervals. In many ways, our perception of it is a human construct. It is more powerful than price as time may be utilized for a trade regardless of the market inflection point’s price. Were it possible to perfectly understand time, price would be totally irrelevant due to the predictive certainty time affords. Time structure is easier to learn than price, but much more difficult to apply with any accuracy. It is the hardest aspect of trading to learn, but also the most rewarding.
Humans do not have the ability to recognize every time window, however the ability to define market inflection points in terms of time is the single most powerful trading edge. Regardless, price should not be abandoned for time alone. Time structure analysis It is inherently flawed, as such the markets have a fail-safe, which is Price Structure. Even though Time is much more powerful, Price Structure should never be completely ignored. Time is the qualifier for Price and vice versa. Time can fail by tricking traders into counter-trend trading.
Time is a predestined trade quantifier, a filter to slow trades down, as it allows a trader to specifically focus on specific time windows and rest at others. It allows for quantitative measurements to reach deterministic values and is the primary qualifier for trends. Time structure should be utilized before price structure, and it is the primary trade criterion which requires support from price. We can see price structure on a chart, as areas of mathematical support or resistance, but we cannot see time structure.
Time may be used to tell us an exact point in the future where the market will inflect, after Price Theory has been fulfilled. In the present, price objectives based on price theory added to possible future times for market inflection points give us the exact time of market inflection points and price.
Time Structure is repetitions of time or inherent cycles of time, occurring in a methodical way to provide time windows which may be utilized for inflection points. They are not easily recognized and not easily defined by a price chart as measuring and observing time is very exact. Time structure is not a science, yet it does require precise measurements. Nothing is certain or definite. The critical question must be if a particular approach to time structure is currently lucrative or not.
We will complete our analysis of time by measuring it in intervals of 180 bars. Our goal is to determine time windows, when the market will react and when we should pay the most attention. By using time repetitions, the fact that market inflection points occurred at some point in the past and should, therefore, reoccur at some point in the future, we should obtain confidence as to when SPY will reach a market inflection point. Time repetitions are essentially the market’s memory. However, simply measuring the time between two points then trying to extrapolate into the future does not work. Measuring time is not the same as defining time repetitions. We will evaluate past sessions for market inflection points, whether discretes, qualified swings, or intra-range. Then records the times that the market has made highs or lows in a comparable time period to the future one seeks to trade in.
What follows is a time Histogram – A grouping of times which appear close together, then segregated based on that closeness. Time is aligned into combined histogram of repetitions and cycles, however cycles are irrelevant on a daily basis. If trading on an hourly basis, do not use hours.
Yearly Lows: 12/31/2000, 9/21/2001, 10/9/2002, 3/11/2003, 8/2/2004, 4/15/2005, 6/12/2006, 3/5/2007, 11/17/2008, 3/9/2009, 7/2/10, 10/3/11, 1/1/12, 1/1/13, 2/3/14, 9/28/15, 2/8/16, 1/3/17, 12/24/18, 6/3/19
Months: 1, 1, 1, 2, 2, 3, 3, 3, 4, 6, 6, 7, 8, 9, 9, 10, 10, 11, 12, 12
Days: 1, 1, 2, 2, 3, 3, 3, 3, 5, 8, 9, 9, 11, 12, 15, 17, 21, 24, 28, 31
Monthly Lows: 3/23, 2/28, 1/27, 12/3, 11/1, 10/2, 9/3, 8/5, 7/1, 6/3, 5/31, 4/1
Days: 1, 1, 1, 2, 3, 3, 3, 5, 23, 27, 27, 31
Weighted Times are repetitions which appears multiple times within the same list, observed and accentuated once divided into relevant sections of the histogram. They are important in the presently defined trading time period and are similar to a mathematical mode with respect to a series. Phased times are essentially periodical patterns in histograms, though they do not guarantee inflection points*.*
We see that SPY tends to have its lows between three major month clusters: 1-4, primarily March (which has actually occurred already this year), 6-9, averaged out to July, and 10-12, averaged out to November. Following the same methodology, we get the third and tenth days of the month as the likeliest days. However, evaluating the monthly lows for the past year, the end of the month has replaced the average of the tenth. Therefore, we have four primary dates for our histogram.
7/3/20, 7/27/20, and 11/3/20, 11/27/20 .
How do we narrow this group down with any accuracy? Let us average the days together to work with two dates - 7/15/20 and 11/15/20.
The 8.6-Year Armstrong-Princeton Global Economic Confidence model – states that 2.15 year intervals occur between corrections, relevant highs and lows. 2.15 years from the all-time peak discrete is April 14th of 2022. However, we can time-shift to other peaks and troughs to determine a date for this year. If we consider 1/28/2018 as a localized high and apply this model, we get 3/23/20 as a low - strikingly accurate. I have chosen the next localized high, 9/21/2018 to apply the model to. We achieve a date of 11/14/2020.
The average bear market is eighteen months long, giving us a date of August 19th, 2021 for the end of the bear market - roughly speaking.
Therefore, our timeline looks like:
As we move forward in time, our predictions may be less accurate. It is important to keep in mind that this analysis will likely change and become more accurate as we factor in Terry Laundry’s T-Theory, the Bradley Cycle, a more sophisticated analysis of Bull and Bear Market Cycles, the Fundamental Investor Cyclic Approach, and Seasons and Half-Seasons.
I have also assumed that the audience believes in these models, which is not necessary. Anyone with free time may construct histograms and view these time models, determining for themselves what is accurate and what is not. Take a look at 1/28/2008, that localized high, and 2.15 years (1/4th of the sinusoidal wave of the model) later.
The question now is, what prices will SPY reach on 11/14? Where will we be at 7/28? What will happen on 4/14/22?
submitted by aibnsamin1 to wallstreetbets [link] [comments]

IM Academy - Are they/their "Affiliates" breaking FINRA regulations on Communications with the Public?

For the uninitiated, IM Academy, formerly iMarketsLive, is an MLM whose scheme centers around a SaaS model for their forex (foreign exchange) trading software. I'm still early in the research, but I think the way they get around the legal definition of a pyramid scheme is by providing referral commissions to their affiliates, who are the ones ultimately posting about their purported 'success' and the opportunities they want to share with their friends and families and doing the recruiting.
Now, perhaps save for the ballsier MLM brands involved in health and wellness products, where running afoul of the FDA is the primary concern (and having worked as someone designing junk mail for a health food/grocery store [the owner of which was decidedly ANTI MLM, thank apollo] for a decade, I can tell you that the magic "These statements have not been endorsed by the FDA. These products are not meant to diagnose, treat, cure, or prevent any disease." is almost an impervious shield, if you're not a total sketchman and literally saying those things in the ad copy for the product), the SEC and the FTC are the regulatory bodies at play; and FINRA, I believe, is the US regulatory body overseeing forex, specifically.
I dig economics. I like listening to economics shows. I've heard plenty of ads for forex trading solutions on the radio, and one constant is the inclusion at the end of the ad of a disclaimer saying, more or less, that 'Forex trading carries substantial risk and consumers should not trade more than what they can afford to lose', or something along those lines. Of course, the folks peddling IM Academy on facebook are just posting about the opportunity to make money trading forex.
That got me thinking -- if the company is paying these guys commissions on referrals for the software, they are effectively communicating to the public. FINRA has some very specific guidelines on this (emphasis mine):
Communications with the Public
NASD Rule 2210, applicable to all FINRA members, prohibits firms from making any false, exaggerated, unwarranted or misleading statement or claim in any communication with the public. Rule 2210 is not limited to a broker-dealer's securities and investment banking business. A firm's forex-related communications—whether the firm is acting as a dealer or is soliciting forex business for a dealer—must be fair and balanced and based on principles of fair dealing and good faith, and firms must provide a sound basis for evaluating the facts regarding both the forex market generally, as well as the customers' specific transactions. These obligations may not be waived or met by disclaimer.
New FINRA member firms that engage in forex-related activities must file their advertisements with FINRA. Rule 2210 requires any firm that has not previously filed advertisements with FINRA to file all of its advertisements at least 10 days prior to first use; this filing requirement continues for one year from the first submission. Rule 2210's internal approval, filing requirements and recording-keeping provisions also apply to forex-related communications. The rule requires that a registered principal give written approval of all advertisements and sales literature prior to use.
Rule 2210 prohibits predictions or projections of performance, or the implication that past performance will recur. Communications used by firms in connection with retail forex activities may not tout future returns. The rule prohibits the omission of material facts or qualifications that would cause a communication to be misleading. Accordingly, firms' communications must adequately disclose the risks associated with forex trading, including the risks of highly leveraged trading. Firms must also make sure that their communications with the public are not misleading regarding, among other things:
Am I onto something here? Even if IM Academy seems to skirt around the traditional definition of a pyramid scheme, their affiliates are breaking the regulations the company, at least, is obligated to adhere to.
This IM Academy scheme specifically seems particularly predatory. I can see a vast gulf between being out a few hundred bucks on shitty inventory you'll never push and forex leverages, which can sometimes mean you lose more than you put in.
submitted by ItsOtisTime to antiMLM [link] [comments]

Trading economic news

The majority of this sub is focused on technical analysis. I regularly ridicule such "tea leaf readers" and advocate for trading based on fundamentals and economic news instead, so I figured I should take the time to write up something on how exactly you can trade economic news releases.
This post is long as balls so I won't be upset if you get bored and go back to your drooping dick patterns or whatever.

How economic news is released

First, it helps to know how economic news is compiled and released. Let's take Initial Jobless Claims, the number of initial claims for unemployment benefits around the United States from Sunday through Saturday. Initial in this context means the first claim for benefits made by an individual during a particular stretch of unemployment. The Initial Jobless Claims figure appears in the Department of Labor's Unemployment Insurance Weekly Claims Report, which compiles information from all of the per-state departments that report to the DOL during the week. A typical number is between 100k and 250k and it can vary quite significantly week-to-week.
The Unemployment Insurance Weekly Claims Report contains data that lags 5 days behind. For example, the Report issued on Thursday March 26th 2020 contained data about the week ending on Saturday March 21st 2020.
In the days leading up to the Report, financial companies will survey economists and run complicated mathematical models to forecast the upcoming Initial Jobless Claims figure. The results of surveyed experts is called the "consensus"; specific companies, experts, and websites will also provide their own forecasts. Different companies will release different consensuses. Usually they are pretty close (within 2-3k), but for last week's record-high Initial Jobless Claims the reported consensuses varied by up to 1M! In other words, there was essentially no consensus.
The Unemployment Insurance Weekly Claims Report is released each Thursday morning at exactly 8:30 AM ET. (On Thanksgiving the Report is released on Wednesday instead.) Media representatives gather at the Frances Perkins Building in Washington DC and are admitted to the "lockup" at 8:00 AM ET. In order to be admitted to the lockup you have to be a credentialed member of a media organization that has signed the DOL lockup agreement. The lockup room is small so there is a limited number of spots.
No phones are allowed. Reporters bring their laptops and connect to a local network; there is a master switch on the wall that prevents/enables Internet connectivity on this network. Once the doors are closed the Unemployment Insurance Weekly Claims Report is distributed, with a heading that announces it is "embargoed" (not to be released) prior to 8:30 AM. Reporters type up their analyses of the report, including extracting key figures like Initial Jobless Claims. They load their write-ups into their companies' software, which prepares to send it out as soon as Internet is enabled. At 8:30 AM the DOL representative in the room flips the wall switch and all of the laptops are connected to the Internet, releasing their write-ups to their companies and on to their companies' partners.
Many of those media companies have externally accessible APIs for distributing news. Media aggregators and squawk services (like RanSquawk and TradeTheNews) subscribe to all of these different APIs and then redistribute the key economic figures from the Report to their own subscribers within one second after Internet is enabled in the DOL lockup.
Some squawk services are text-based while others are audio-based. FinancialJuice.com provides a free audio squawk service; internally they have a paid subscription to a professional squawk service and they simply read out the latest headlines to their own listeners, subsidized by ads on the site. I've been using it for 4 months now and have been pretty happy. It usually lags behind the official release times by 1-2 seconds and occasionally they verbally flub the numbers or stutter and have to repeat, but you can't beat the price!
Important - I’m not affiliated with FinancialJuice and I’m not advocating that you use them over any other squawk. If you use them and they misspeak a number and you lose all your money don’t blame me. If anybody has any other free alternatives please share them!

How the news affects forex markets

Institutional forex traders subscribe to these squawk services and use custom software to consume the emerging data programmatically and then automatically initiate trades based on the perceived change to the fundamentals that the figures represent.
It's important to note that every institution will have "priced in" their own forecasted figures well in advance of an actual news release. Forecasts and consensuses all come out at different times in the days leading up to a news release, so by the time the news drops everybody is really only looking for an unexpected result. You can't really know what any given institution expects the value to be, but unless someone has inside information you can pretty much assume that the market has collectively priced in the experts' consensus. When the news comes out, institutions will trade based on the difference between the actual and their forecast.
Sometimes the news reflects a real change to the fundamentals with an economic effect that will change the demand for a currency, like an interest rate decision. However, in the case of the Initial Jobless Claims figure, which is a backwards-looking metric, trading is really just self-fulfilling speculation that market participants will buy dollars when unemployment is low and sell dollars when unemployment is high. Generally speaking, news that reflects a real economic shift has a bigger effect than news that only matters to speculators.
Massive and extremely fast news-based trades happen within tenths of a second on the ECNs on which institutional traders are participants. Over the next few seconds the resulting price changes trickle down to retail traders. Some economic news, like Non Farm Payroll Employment, has an effect that can last minutes to hours as "slow money" follows behind on the trend created by the "fast money". Other news, like Initial Jobless Claims, has a short impact that trails off within a couple minutes and is subsequently dwarfed by the usual pseudorandom movements in the market.
The bigger the difference between actual and consensus, the bigger the effect on any given currency pair. Since economic news releases generally relate to a single currency, the biggest and most easily predicted effects are seen on pairs where one currency is directly effected and the other is not affected at all. Personally I trade USD/JPY because the time difference between the US and Japan ensures that no news will be coming out of Japan at the same time that economic news is being released in the US.
Before deciding to trade any particular news release you should measure the historical correlation between the release (specifically, the difference between actual and consensus) and the resulting short-term change in the currency pair. Historical data for various news releases (along with historical consensus data) is readily available. You can pay to get it exported into Excel or whatever, or you can scroll through it for free on websites like TradingEconomics.com.
Let's look at two examples: Initial Jobless Claims and Non Farm Payroll Employment (NFP). I collected historical consensuses and actuals for these releases from January 2018 through the present, measured the "surprise" difference for each, and then correlated that to short-term changes in USD/JPY at the time of release using 5 second candles.
I omitted any releases that occurred simultaneously as another major release. For example, occasionally the monthly Initial Jobless Claims comes out at the exact same time as the monthly Balance of Trade figure, which is a more significant economic indicator and can be expected to dwarf the effect of the Unemployment Insurance Weekly Claims Report.
USD/JPY correlation with Initial Jobless Claims (2018 - present)
USD/JPY correlation with Non Farm Payrolls (2018 - present)
The horizontal axes on these charts is the duration (in seconds) after the news release over which correlation was calculated. The vertical axis is the Pearson correlation coefficient: +1 means that the change in USD/JPY over that duration was perfectly linearly correlated to the "surprise" in the releases; -1 means that the change in USD/JPY was perfectly linearly correlated but in the opposite direction, and 0 means that there is no correlation at all.
For Initial Jobless Claims you can see that for the first 30 seconds USD/JPY is strongly negatively correlated with the difference between consensus and actual jobless claims. That is, fewer-than-forecast jobless claims (fewer newly unemployed people than expected) strengthens the dollar and greater-than-forecast jobless claims (more newly unemployed people than expected) weakens the dollar. Correlation then trails off and changes to a moderate/weak positive correlation. I interpret this as algorithms "buying the dip" and vice versa, but I don't know for sure. From this chart it appears that you could profit by opening a trade for 15 seconds (duration with strongest correlation) that is long USD/JPY when Initial Jobless Claims is lower than the consensus and short USD/JPY when Initial Jobless Claims is higher than expected.
The chart for Non Farm Payroll looks very different. Correlation is positive (higher-than-expected payrolls strengthen the dollar and lower-than-expected payrolls weaken the dollar) and peaks at around 45 seconds, then slowly decreases as time goes on. This implies that price changes due to NFP are quite significant relative to background noise and "stick" even as normal fluctuations pick back up.
I wanted to show an example of what the USD/JPY S5 chart looks like when an "uncontested" (no other major simultaneously news release) Initial Jobless Claims and NFP drops, but unfortunately my broker's charts only go back a week. (I can pull historical data going back years through the API but to make it into a pretty chart would be a bit of work.) If anybody can get a 5-second chart of USD/JPY at March 19, 2020, UTC 12:30 and/or at February 7, 2020, UTC 13:30 let me know and I'll add it here.

Backtesting

So without too much effort we determined that (1) USD/JPY is strongly negatively correlated with the Initial Jobless Claims figure for the first 15 seconds after the release of the Unemployment Insurance Weekly Claims Report (when no other major news is being released) and also that (2) USD/JPY is strongly positively correlated with the Non Farms Payroll figure for the first 45 seconds after the release of the Employment Situation report.
Before you can assume you can profit off the news you have to backtest and consider three important parameters.
Entry speed: How quickly can you realistically enter the trade? The correlation performed above was measured from the exact moment the news was released, but realistically if you've got your finger on the trigger and your ear to the squawk it will take a few seconds to hit "Buy" or "Sell" and confirm. If 90% of the price move happens in the first second you're SOL. For back-testing purposes I assume a 5 second delay. In practice I use custom software that opens a trade with one click, and I can reliably enter a trade within 2-3 seconds after the news drops, using the FinancialJuice free squawk.
Minimum surprise: Should you trade every release or can you do better by only trading those with a big enough "surprise" factor? Backtesting will tell you whether being more selective is better long-term or not.
Hold time: The optimal time to hold the trade is not necessarily the same as the time of maximum correlation. That's a good starting point but it's not necessarily the best number. Backtesting each possible hold time will let you find the best one.
The spread: When you're only holding a position open for 30 seconds, the spread will kill you. The correlations performed above used the midpoint price, but in reality you have to buy at the ask and sell at the bid. Brokers aren't stupid and the moment volume on the ECN jumps they will widen the spread for their retail customers. The only way to determine if the news-driven price movements reliably overcome the spread is to backtest.
Stops: Personally I don't use stops, neither take-profit nor stop-loss, since I'm automatically closing the trade after a fixed (and very short) amount of time. Additionally, brokers have a minimum stop distance; the profits from scalping the news are so slim that even the nearest stops they allow will generally not get triggered.
I backtested trading these two news releases (since 2018), using a 5 second entry delay, real historical spreads, and no stops, cycling through different "surprise" thresholds and hold times to find the combination that returns the highest net profit. It's important to maximize net profit, not expected value per trade, so you don't over-optimize and reduce the total number of trades taken to one single profitable trade. If you want to get fancy you can set up a custom metric that combines number of trades, expected value, and drawdown into a single score to be maximized.
For the Initial Jobless Claims figure I found that the best combination is to hold trades open for 25 seconds (that is, open at 5 seconds elapsed and hold until 30 seconds elapsed) and only trade when the difference between consensus and actual is 7k or higher. That leads to 30 trades taken since 2018 and an expected return of... drumroll please... -0.0093 yen per unit per trade.
Yep, that's a loss of approx. $8.63 per lot.
Disappointing right? That's the spread and that's why you have to backtest. Even though the release of the Unemployment Insurance Weekly Claims Report has a strong correlation with movement in USD/JPY, it's simply not something that a retail trader can profit from.
Let's turn to the NFP. There I found that the best combination is to hold trades open for 75 seconds (that is, open at 5 seconds elapsed and hold until 80 seconds elapsed) and trade every single NFP (no minimum "surprise" threshold). That leads to 20 trades taken since 2018 and an expected return of... drumroll please... +0.1306 yen per unit per trade.
That's a profit of approx. $121.25 per lot. Not bad for 75 seconds of work! That's a +6% ROI at 50x leverage.

Make it real

If you want to do this for realsies, you need to run these numbers for all of the major economic news releases. Markit Manufacturing PMI, Factory Orders MoM, Trade Balance, PPI MoM, Export and Import Prices, Michigan Consumer Sentiment, Retail Sales MoM, Industrial Production MoM, you get the idea. You keep a list of all of the releases you want to trade, when they are released, and the ideal hold time and "surprise" threshold. A few minutes before the prescribed release time you open up your broker's software, turn on your squawk, maybe jot a few notes about consensuses and model forecasts, and get your finger on the button. At the moment you hear the release you open the trade in the correct direction, hold it (without looking at the chart!) for the required amount of time, then close it and go on with your day.
Some benefits of trading this way: * Most major economic releases come out at either 8:30 AM ET or 10:00 AM ET, and then you're done for the day. * It's easily backtestable. You can look back at the numbers and see exactly what to expect your return to be. * It's fun! Packing your trading into 30 seconds and knowing that institutions are moving billions of dollars around as fast as they can based on the exact same news you just read is thrilling. * You can wow your friends by saying things like "The St. Louis Fed had some interesting remarks on consumer spending in the latest Beige Book." * No crayons involved.
Some downsides: * It's tricky to be fast enough without writing custom software. Some broker software is very slow and requires multiple dialog boxes before a position is opened, which won't cut it. * The profits are very slim, you're not going to impress your instagram followers to join your expensive trade copying service with your 30-second twice-weekly trades. * Any friends you might wow with your boring-ass economic talking points are themselves the most boring people in the world.
I hope you enjoyed this long as fuck post and you give trading economic news a try!
submitted by thicc_dads_club to Forex [link] [comments]

Where is Bitcoin Going and When?

Where is Bitcoin Going and When?

The Federal Reserve and the United States government are pumping extreme amounts of money into the economy, already totaling over $484 billion. They are doing so because it already had a goal to inflate the United States Dollar (USD) so that the market can continue to all-time highs. It has always had this goal. They do not care how much inflation goes up by now as we are going into a depression with the potential to totally crash the US economy forever. They believe the only way to save the market from going to zero or negative values is to inflate it so much that it cannot possibly crash that low. Even if the market does not dip that low, inflation serves the interest of powerful people.
The impending crash of the stock market has ramifications for Bitcoin, as, though there is no direct ongoing-correlation between the two, major movements in traditional markets will necessarily affect Bitcoin. According to the Blockchain Center’s Cryptocurrency Correlation Tool, Bitcoin is not correlated with the stock market. However, when major market movements occur, they send ripples throughout the financial ecosystem which necessary affect even ordinarily uncorrelated assets.
Therefore, Bitcoin will reach X price on X date after crashing to a price of X by X date.

Stock Market Crash

The Federal Reserve has caused some serious consternation with their release of ridiculous amounts of money in an attempt to buoy the economy. At face value, it does not seem to have any rationale or logic behind it other than keeping the economy afloat long enough for individuals to profit financially and politically. However, there is an underlying basis to what is going on which is important to understand in order to profit financially.
All markets are functionally price probing systems. They constantly undergo a price-discovery process. In a fiat system, money is an illusory and a fundamentally synthetic instrument with no intrinsic value – similar to Bitcoin. The primary difference between Bitcoin is the underlying technology which provides a slew of benefits that fiat does not. Fiat, however, has an advantage in being able to have the support of powerful nation-states which can use their might to insure the currency’s prosperity.
Traditional stock markets are composed of indices (pl. of index). Indices are non-trading market instruments which are essentially summaries of business values which comprise them. They are continuously recalculated throughout a trading day, and sometimes reflected through tradable instruments such as Exchange Traded Funds or Futures. Indices are weighted by market capitalizations of various businesses.
Price theory essentially states that when a market fails to take out a new low in a given range, it will have an objective to take out the high. When a market fails to take out a new high, it has an objective to make a new low. This is why price-time charts go up and down, as it does this on a second-by-second, minute-by-minute, day-by-day, and even century-by-century basis. Therefore, market indices will always return to some type of bull market as, once a true low is formed, the market will have a price objective to take out a new high outside of its’ given range – which is an all-time high. Instruments can only functionally fall to zero, whereas they can grow infinitely.
So, why inflate the economy so much?
Deflation is disastrous for central banks and markets as it raises the possibility of producing an overall price objective of zero or negative values. Therefore, under a fractional reserve system with a fiat currency managed by a central bank – the goal of the central bank is to depreciate the currency. The dollar is manipulated constantly with the intention of depreciating its’ value.
Central banks have a goal of continued inflated fiat values. They tend to ordinarily contain it at less than ten percent (10%) per annum in order for the psyche of the general populace to slowly adjust price increases. As such, the markets are divorced from any other logic. Economic policy is the maintenance of human egos, not catering to fundamental analysis. Gross Domestic Product (GDP) growth is well-known not to be a measure of actual growth or output. It is a measure of increase in dollars processed. Banks seek to produce raising numbers which make society feel like it is growing economically, making people optimistic. To do so, the currency is inflated, though inflation itself does not actually increase growth. When society is optimistic, it spends and engages in business – resulting in actual growth. It also encourages people to take on credit and debts, creating more fictional fiat.
Inflation is necessary for markets to continue to reach new heights, generating positive emotional responses from the populace, encouraging spending, encouraging debt intake, further inflating the currency, and increasing the sale of government bonds. The fiat system only survives by generating more imaginary money on a regular basis.
Bitcoin investors may profit from this by realizing that stock investors as a whole always stand to profit from the market so long as it is managed by a central bank and does not collapse entirely. If those elements are filled, it has an unending price objective to raise to new heights. It also allows us to realize that this response indicates that the higher-ups believe that the economy could crash in entirety, and it may be wise for investors to have multiple well-thought-out exit strategies.

Economic Analysis of Bitcoin

The reason why the Fed is so aggressively inflating the economy is due to fears that it will collapse forever or never rebound. As such, coupled with a global depression, a huge demand will appear for a reserve currency which is fundamentally different than the previous system. Bitcoin, though a currency or asset, is also a market. It also undergoes a constant price-probing process. Unlike traditional markets, Bitcoin has the exact opposite goal. Bitcoin seeks to appreciate in value and not depreciate. This has a quite different affect in that Bitcoin could potentially become worthless and have a price objective of zero.
Bitcoin was created in 2008 by a now famous mysterious figure known as Satoshi Nakamoto and its’ open source code was released in 2009. It was the first decentralized cryptocurrency to utilize a novel protocol known as the blockchain. Up to one megabyte of data may be sent with each transaction. It is decentralized, anonymous, transparent, easy to set-up, and provides myriad other benefits. Bitcoin is not backed up by anything other than its’ own technology.
Bitcoin is can never be expected to collapse as a framework, even were it to become worthless. The stock market has the potential to collapse in entirety, whereas, as long as the internet exists, Bitcoin will be a functional system with a self-authenticating framework. That capacity to persist regardless of the actual price of Bitcoin and the deflationary nature of Bitcoin means that it has something which fiat does not – inherent value.
Bitcoin is based on a distributed database known as the “blockchain.” Blockchains are essentially decentralized virtual ledger books, replete with pages known as “blocks.” Each page in a ledger is composed of paragraph entries, which are the actual transactions in the block.
Blockchains store information in the form of numerical transactions, which are just numbers. We can consider these numbers digital assets, such as Bitcoin. The data in a blockchain is immutable and recorded only by consensus-based algorithms. Bitcoin is cryptographic and all transactions are direct, without intermediary, peer-to-peer.
Bitcoin does not require trust in a central bank. It requires trust on the technology behind it, which is open-source and may be evaluated by anyone at any time. Furthermore, it is impossible to manipulate as doing so would require all of the nodes in the network to be hacked at once – unlike the stock market which is manipulated by the government and “Market Makers”. Bitcoin is also private in that, though the ledge is openly distributed, it is encrypted. Bitcoin’s blockchain has one of the greatest redundancy and information disaster recovery systems ever developed.
Bitcoin has a distributed governance model in that it is controlled by its’ users. There is no need to trust a payment processor or bank, or even to pay fees to such entities. There are also no third-party fees for transaction processing. As the ledge is immutable and transparent it is never possible to change it – the data on the blockchain is permanent. The system is not easily susceptible to attacks as it is widely distributed. Furthermore, as users of Bitcoin have their private keys assigned to their transactions, they are virtually impossible to fake. No lengthy verification, reconciliation, nor clearing process exists with Bitcoin.
Bitcoin is based on a proof-of-work algorithm. Every transaction on the network has an associated mathetical “puzzle”. Computers known as miners compete to solve the complex cryptographic hash algorithm that comprises that puzzle. The solution is proof that the miner engaged in sufficient work. The puzzle is known as a nonce, a number used only once. There is only one major nonce at a time and it issues 12.5 Bitcoin. Once it is solved, the fact that the nonce has been solved is made public.
A block is mined on average of once every ten minutes. However, the blockchain checks every 2,016,000 minutes (approximately four years) if 201,600 blocks were mined. If it was faster, it increases difficulty by half, thereby deflating Bitcoin. If it was slower, it decreases, thereby inflating Bitcoin. It will continue to do this until zero Bitcoin are issued, projected at the year 2140. On the twelfth of May, 2020, the blockchain will halve the amount of Bitcoin issued when each nonce is guessed. When Bitcoin was first created, fifty were issued per block as a reward to miners. 6.25 BTC will be issued from that point on once each nonce is solved.
Unlike fiat, Bitcoin is a deflationary currency. As BTC becomes scarcer, demand for it will increase, also raising the price. In this, BTC is similar to gold. It is predictable in its’ output, unlike the USD, as it is based on a programmed supply. We can predict BTC’s deflation and inflation almost exactly, if not exactly. Only 21 million BTC will ever be produced, unless the entire network concedes to change the protocol – which is highly unlikely.
Some of the drawbacks to BTC include congestion. At peak congestion, it may take an entire day to process a Bitcoin transaction as only three to five transactions may be processed per second. Receiving priority on a payment may cost up to the equivalent of twenty dollars ($20). Bitcoin mining consumes enough energy in one day to power a single-family home for an entire week.

Trading or Investing?

The fundamental divide in trading revolves around the question of market structure. Many feel that the market operates totally randomly and its’ behavior cannot be predicted. For the purposes of this article, we will assume that the market has a structure, but that that structure is not perfect. That market structure naturally generates chart patterns as the market records prices in time. In order to determine when the stock market will crash, causing a major decline in BTC price, we will analyze an instrument, an exchange traded fund, which represents an index, as opposed to a particular stock. The price patterns of the various stocks in an index are effectively smoothed out. In doing so, a more technical picture arises. Perhaps the most popular of these is the SPDR S&P Standard and Poor 500 Exchange Traded Fund ($SPY).
In trading, little to no concern is given about value of underlying asset. We are concerned primarily about liquidity and trading ranges, which are the amount of value fluctuating on a short-term basis, as measured by volatility-implied trading ranges. Fundamental analysis plays a role, however markets often do not react to real-world factors in a logical fashion. Therefore, fundamental analysis is more appropriate for long-term investing.
The fundamental derivatives of a chart are time (x-axis) and price (y-axis). The primary technical indicator is price, as everything else is lagging in the past. Price represents current asking price and incorrectly implementing positions based on price is one of the biggest trading errors.
Markets and currencies ordinarily have noise, their tendency to back-and-fill, which must be filtered out for true pattern recognition. That noise does have a utility, however, in allowing traders second chances to enter favorable positions at slightly less favorable entry points. When you have any market with enough liquidity for historical data to record a pattern, then a structure can be divined. The market probes prices as part of an ongoing price-discovery process. Market technicians must sometimes look outside of the technical realm and use visual inspection to ascertain the relevance of certain patterns, using a qualitative eye that recognizes the underlying quantitative nature
Markets and instruments rise slower than they correct, however they rise much more than they fall. In the same vein, instruments can only fall to having no worth, whereas they could theoretically grow infinitely and have continued to grow over time. Money in a fiat system is illusory. It is a fundamentally synthetic instrument which has no intrinsic value. Hence, the recent seemingly illogical fluctuations in the market.
According to trade theory, the unending purpose of a market or instrument is to create and break price ranges according to the laws of supply and demand. We must determine when to trade based on each market inflection point as defined in price and in time as opposed to abandoning the trend (as the contrarian trading in this sub often does). Time and Price symmetry must be used to be in accordance with the trend. When coupled with a favorable risk to reward ratio, the ability to stay in the market for most of the defined time period, and adherence to risk management rules; the trader has a solid methodology for achieving considerable gains.
We will engage in a longer term market-oriented analysis to avoid any time-focused pressure. The Bitcoin market is open twenty-four-hours a day, so trading may be done when the individual is ready, without any pressing need to be constantly alert. Let alone, we can safely project months in advance with relatively high accuracy. Bitcoin is an asset which an individual can both trade and invest, however this article will be focused on trading due to the wide volatility in BTC prices over the short-term.

Technical Indicator Analysis of Bitcoin

Technical indicators are often considered self-fulfilling prophecies due to mass-market psychology gravitating towards certain common numbers yielded from them. They are also often discounted when it comes to BTC. That means a trader must be especially aware of these numbers as they can prognosticate market movements. Often, they are meaningless in the larger picture of things.
  • Volume – derived from the market itself, it is mostly irrelevant. The major problem with volume for stocks is that the US market open causes tremendous volume surges eradicating any intrinsic volume analysis. This does not occur with BTC, as it is open twenty-four-seven. At major highs and lows, the market is typically anemic. Most traders are not active at terminal discretes (peaks and troughs) because of levels of fear. Volume allows us confidence in time and price symmetry market inflection points, if we observe low volume at a foretold range of values. We can rationalize that an absolute discrete is usually only discovered and anticipated by very few traders. As the general market realizes it, a herd mentality will push the market in the direction favorable to defending it. Volume is also useful for swing trading, as chances for swing’s validity increases if an increase in volume is seen on and after the swing’s activation. Volume is steadily decreasing. Lows and highs are reached when volume is lower.
Therefore, due to the relatively high volume on the 12th of March, we can safely determine that a low for BTC was not reached.
  • VIX – Volatility Index, this technical indicator indicates level of fear by the amount of options-based “insurance” in portfolios. A low VIX environment, less than 20 for the S&P index, indicates a stable market with a possible uptrend. A high VIX, over 20, indicates a possible downtrend. VIX is essentially useless for BTC as BTC-based options do not exist. It allows us to predict the market low for $SPY, which will have an indirect impact on BTC in the short term, likely leading to the yearly low. However, it is equally important to see how VIX is changing over time, if it is decreasing or increasing, as that indicates increasing or decreasing fear. Low volatility allows high leverage without risk or rest. Occasionally, markets do rise with high VIX.
As VIX is unusually high, in the forties, we can be confident that a downtrend for the S&P 500 is imminent.
  • RSI (Relative Strength Index): The most important technical indicator, useful for determining highs and lows when time symmetry is not availing itself. Sometimes analysis of RSI can conflict in different time frames, easiest way to use it is when it is at extremes – either under 30 or over 70. Extremes can be used for filtering highs or lows based on time-and-price window calculations. Highly instructive as to major corrective clues and indicative of continued directional movement. Must determine if longer-term RSI values find support at same values as before. It is currently at 73.56.
  • Secondly, RSI may be used as a high or low filter, to observe the level that short-term RSI reaches in counter-trend corrections. Repetitions based on market movements based on RSI determine how long a trade should be held onto. Once a short term RSI reaches an extreme and stay there, the other RSI’s should gradually reach the same extremes. Once all RSI’s are at extreme highs, a trend confirmation should occur and RSI’s should drop to their midpoint.

Trend Definition Analysis of Bitcoin

Trend definition is highly powerful, cannot be understated. Knowledge of trend logic is enough to be a profitable trader, yet defining a trend is an arduous process. Multiple trends coexist across multiple time frames and across multiple market sectors. Like time structure, it makes the underlying price of the instrument irrelevant. Trend definitions cannot determine the validity of newly formed discretes. Trend becomes apparent when trades based in counter-trend inflection points continue to fail.
Downtrends are defined as an instrument making lower lows and lower highs that are recurrent, additive, qualified swing setups. Downtrends for all instruments are similar, except forex. They are fast and complete much quicker than uptrends. An average downtrend is 18 months, something which we will return to. An uptrend inception occurs when an instrument reaches a point where it fails to make a new low, then that low will be tested. After that, the instrument will either have a deep range retracement or it may take out the low slightly, resulting in a double-bottom. A swing must eventually form.
A simple way to roughly determine trend is to attempt to draw a line from three tops going upwards (uptrend) or a line from three bottoms going downwards (downtrend). It is not possible to correctly draw a downtrend line on the BTC chart, but it is possible to correctly draw an uptrend – indicating that the overall trend is downwards. The only mitigating factor is the impending stock market crash.

Time Symmetry Analysis of Bitcoin

Time is the movement from the past through the present into the future. It is a measurement in quantified intervals. In many ways, our perception of it is a human construct. It is more powerful than price as time may be utilized for a trade regardless of the market inflection point’s price. Were it possible to perfectly understand time, price would be totally irrelevant due to the predictive certainty time affords. Time structure is easier to learn than price, but much more difficult to apply with any accuracy. It is the hardest aspect of trading to learn, but also the most rewarding.
Humans do not have the ability to recognize every time window, however the ability to define market inflection points in terms of time is the single most powerful trading edge. Regardless, price should not be abandoned for time alone. Time structure analysis It is inherently flawed, as such the markets have a fail-safe, which is Price Structure. Even though Time is much more powerful, Price Structure should never be completely ignored. Time is the qualifier for Price and vice versa. Time can fail by tricking traders into counter-trend trading.
Time is a predestined trade quantifier, a filter to slow trades down, as it allows a trader to specifically focus on specific time windows and rest at others. It allows for quantitative measurements to reach deterministic values and is the primary qualifier for trends. Time structure should be utilized before price structure, and it is the primary trade criterion which requires support from price. We can see price structure on a chart, as areas of mathematical support or resistance, but we cannot see time structure.
Time may be used to tell us an exact point in the future where the market will inflect, after Price Theory has been fulfilled. In the present, price objectives based on price theory added to possible future times for market inflection points give us the exact time of market inflection points and price.
Time Structure is repetitions of time or inherent cycles of time, occurring in a methodical way to provide time windows which may be utilized for inflection points. They are not easily recognized and not easily defined by a price chart as measuring and observing time is very exact. Time structure is not a science, yet it does require precise measurements. Nothing is certain or definite. The critical question must be if a particular approach to time structure is currently lucrative or not.
We will measure it in intervals of 180 bars. Our goal is to determine time windows, when the market will react and when we should pay the most attention. By using time repetitions, the fact that market inflection points occurred at some point in the past and should, therefore, reoccur at some point in the future, we should obtain confidence as to when SPY will reach a market inflection point. Time repetitions are essentially the market’s memory. However, simply measuring the time between two points then trying to extrapolate into the future does not work. Measuring time is not the same as defining time repetitions. We will evaluate past sessions for market inflection points, whether discretes, qualified swings, or intra-range. Then records the times that the market has made highs or lows in a comparable time period to the future one seeks to trade in.
What follows is a time Histogram – A grouping of times which appear close together, then segregated based on that closeness. Time is aligned into combined histogram of repetitions and cycles, however cycles are irrelevant on a daily basis. If trading on an hourly basis, do not use hours.
  • Yearly Lows (last seven years): 1/1/13, 4/10/14, 1/15/15, 1/17/16, 1/1/17, 12/15/18, 2/6/19
  • Monthly Mode: 1, 1, 1, 1, 2, 4, 12
  • Daily Mode: 1, 1, 6, 10, 15, 15, 17
  • Monthly Lows (for the last year): 3/12/20 (10:00pm), 2/28/20 (7:09am), 1/2/20 (8:09pm), 12/18/19 (8:00am), 11/25/19 (1:00am), 10/24/19 (2:59am), 9/30/19 (2:59am), 8/29,19 (4:00am), 7/17/19 (7:59am), 6/4/19 (5:59pm), 5/1/19 (12:00am), 4/1/19 (12:00am)
  • Daily Lows Mode for those Months: 1, 1, 2, 4, 12, 17, 18, 24, 25, 28, 29, 30
  • Hourly Lows Mode for those Months (Military time): 0100, 0200, 0200, 0400, 0700, 0700, 0800, 1200, 1200, 1700, 2000, 2200
  • Minute Lows Mode for those Months: 00, 00, 00, 00, 00, 00, 09, 09, 59, 59, 59, 59
  • Day of the Week Lows (last twenty-six weeks):
Weighted Times are repetitions which appears multiple times within the same list, observed and accentuated once divided into relevant sections of the histogram. They are important in the presently defined trading time period and are similar to a mathematical mode with respect to a series. Phased times are essentially periodical patterns in histograms, though they do not guarantee inflection points
Evaluating the yearly lows, we see that BTC tends to have its lows primarily at the beginning of every year, with a possibility of it being at the end of the year. Following the same methodology, we get the middle of the month as the likeliest day. However, evaluating the monthly lows for the past year, the beginning and end of the month are more likely for lows.
Therefore, we have two primary dates from our histogram.
1/1/21, 1/15/21, and 1/29/21
2:00am, 8:00am, 12:00pm, or 10:00pm
In fact, the high for this year was February the 14th, only thirty days off from our histogram calculations.
The 8.6-Year Armstrong-Princeton Global Economic Confidence model states that 2.15 year intervals occur between corrections, relevant highs and lows. 2.15 years from the all-time peak discrete is February 9, 2020 – a reasonably accurate depiction of the low for this year (which was on 3/12/20). (Taking only the Armstrong model into account, the next high should be Saturday, April 23, 2022). Therefore, the Armstrong model indicates that we have actually bottomed out for the year!
Bear markets cannot exist in perpetuity whereas bull markets can. Bear markets will eventually have price objectives of zero, whereas bull markets can increase to infinity. It can occur for individual market instruments, but not markets as a whole. Since bull markets are defined by low volatility, they also last longer. Once a bull market is indicated, the trader can remain in a long position until a new high is reached, then switch to shorts. The average bear market is eighteen months long, giving us a date of August 19th, 2021 for the end of this bear market – roughly speaking. They cannot be shorter than fifteen months for a central-bank controlled market, which does not apply to Bitcoin. (Otherwise, it would continue until Sunday, September 12, 2021.) However, we should expect Bitcoin to experience its’ exponential growth after the stock market re-enters a bull market.
Terry Laundy’s T-Theory implemented by measuring the time of an indicator from peak to trough, then using that to define a future time window. It is similar to an head-and-shoulders pattern in that it is the process of forming the right side from a synthetic technical indicator. If the indicator is making continued lows, then time is recalculated for defining the right side of the T. The date of the market inflection point may be a price or indicator inflection date, so it is not always exactly useful. It is better to make us aware of possible market inflection points, clustered with other data. It gives us an RSI low of May, 9th 2020.
The Bradley Cycle is coupled with volatility allows start dates for campaigns or put options as insurance in portfolios for stocks. However, it is also useful for predicting market moves instead of terminal dates for discretes. Using dates which correspond to discretes, we can see how those dates correspond with changes in VIX.
Therefore, our timeline looks like:
  • 2/14/20 – yearly high ($10372 USD)
  • 3/12/20 – yearly low thus far ($3858 USD)
  • 5/9/20 – T-Theory true yearly low (BTC between 4863 and 3569)
  • 5/26/20 – hashrate difficulty halvening
  • 11/14/20 – stock market low
  • 1/15/21 – yearly low for BTC, around $8528
  • 8/19/21 – end of stock bear market
  • 11/26/21 – eighteen months from halvening, average peak from halvenings (BTC begins rising from $3000 area to above $23,312)
  • 4/23/22 – all-time high
Taken from my blog: http://aliamin.info/2020/
submitted by aibnsamin1 to Bitcoin [link] [comments]

Running a ponzi and stealing $180K, IRL.


I wanted to write a quick post in answer to the people who routinely make claims I have a history of stealing from people in my previous company and base this upon a blog they read. If you would like to discuss this further, please make a post and link it to me to engage on. I will do so as long as we deal with the facts of how a PAMM company really works.
I won't engage in circular debates where the essential point is, "I don't believe you". You don't have to - that's not how any of this works. Just fact check.

Anti-SEO:

I want to avoid Google ranking on this post. Although for my personal 'PR' it would be beneficial to aim to rank something answering claims, at some points in this some others involved in the company will not really come over in the best light. I assume it's likely these people are still involved things (Not spoke with them for 5 yrs) - It'd be unfair to rank bad PR on them.

The failure of the company was squarely due to me. Anything anyone else did either would not have happened or not have mattered if I'd done better. I do not want anything I do now to further hinder anyone.

So I will refer to names by only one letter (or number if applicable).

Ponzi Claims:


I found it strange at the time this ended up centred around the ponzi scheme side of things. There was a reasonable question to be asked and answered as to if it was a pyramid scheme. Were people signing up just to sign people up, or was there a core product of fair market value. The services sold I'd previously ran at the same sort of price point direct to market - so I felt on fairly good ground on that.
Initially I's actually been a bit excited initially, because I was a reader of the blog in question and I liked the work they'd done on pyramid schemes. I thought I'd be able to either validate I was doing things right, or learn how I should be doing them better. I never thought the ponzi side of it would take any more than a few minutes to clear up. But that was not so ...
A ponzi scheme was to all intents and purposes impossible. All of our business was done via three different brokers and all of our results publicly tracked with close to real time updates for marketing purposes. Of the three brokers we were using, two of them had good regulation. An off-shore broker had to be used for US clients, so this is the only one with any sort of question mark.
All of our results over all the brokers were almost identical (Some execution/costs variance). The two regulated brokers were under different regulators. Most, if not all, the brokers held clients funds in segregated accounts. All brokers would have to have been fully complicit in the scam - and it costs more to get regulated than there was to steal. Logically, it could not have been so.
We were using a PAMM model. This works by the client opening a brokerage account and signing a LPoA to allow trades to be copied onto their account. The LPoA grants the company no access to the funds. Money laundering laws also dictate the funds can only be redeemed to same source they were funded. PAMMs are big business. Protection of all parties is built into it, it's a well trusted model.
This should have taken no less than 5 minutes to self verify. It could not have been a ponzi.

£50,000 Fine:


That happened. Turns out if you set up a PAMM in the Netherlands and then let a bunch of people refer investment to it this is classed as running a ... I can't remember exactly and even at the time it was in Dutch so I didn't personally read it all. The underlying problem was not the model in any way. We were told at the time we basically jut had to pay £2,000 for each country we did business in.
We were global. At this time the company had neither the money to do that, or pay the fine they gave us for not having the money to do that.
My mistaken assumption was that since when you run a PAMM you are basically piggybacking off the broker's licence, all was well and good. This was true - but the problem was sourcing. Paying people to refer investment was what we were fined for when you get right down to it.

$180,000 Stolen:


This was just a headline. In many ways it's misleading. Firstly, nothing was stolen or even taken. It was lost or given away to clients who'd lost in the PAMMs that went bad. All the money lost was lost trying to get enough money to make good all the PAMMs. So it was not stolen, and there is nothing in anyway to imply that's a suitable word to use. In the blog, no explanation of that is offered.
What seems to be inferred is that this was commissions due out to clients that the company kept. Even outside the above mentioned this would be wrong. All affiliates were paid. You will not find a single one who says they were not. Further to that, of all the funds invested into the company (We'll call the company '5') somewhere in the 60 - 70% range was sourced directly by me.
Other funds were sourced by my co-founder. Investments were made through passive advertising without them being attributed to a refer. All in all, assuming we did not pay the affiliates and we had this much, $18,000 would be the number. Of the $180,000 somewhere a bit over $100,000 would have been mine. I never took that, and could not have "Stolen" it.
I don't see the point in getting super technical on everything by going through how, but the number also probably wasn't $180,000. I think this was an overestimate made in a throw away comment by my co-founder (We'll call her 'M') who was (Justifiably) extremely angry at me at the time she came up with the number and added it in a post (Of this multi paragraph post, this one line and one number was taken - if memory servers, all context was left out when the blogger cited this as stolen. Which would make sense. The post was berating me for losing the money. That didn't fit the narrative.

What Backs the Story?

Of all of the claims of wrongdoing (Apart from the fine, which is documented and true) - there is no evidence proposed for any of the claims made. All of it hinges on a story told to the blogger by one person, who was another of my co-founders 'We'll call her 'E'. E was either a late teenager or very early 20s at the time.
In the founding of 5, E was essential. Before 5 I'd been running a service selling trading signals and selling them at $5 a week subscription. I was generating a lot of business (Working all day, every day and having fun with it. Like I did here for a while, but at that time I really was marketing). 5 - 10 people a day could be signing up.
I knew nothing at all about how to structure an online business. No listing of new clients to send emails. Nothing about making membership sites with password access etc. I was working off a Wix site I made myself with no on-boarding system in place. The volume of people joining was crushing me. I could not process them and was getting a lot of PayPal disputes.
I wanted to send them the stuff. Just did not have the process to ensure this was being done. E stepped in and saved me on that. She made original 5 website (On Wordpress, I believe it was later upgraded to something else). Set up memberships payments. Automated listing. Also she suggested changing the name to what the company became. E made the work I was doing work.
After that, she had varying performance. Her gripe in the blog is she was not paid for helping to found the company. Left out of this is the fact she was not paid because she was head of marketing and we were not getting enough clients. Almost all of them coming from me hitting the DMs and signing people up the old fashioned way.
On results of trading, everything was going well (and this was my area). Things were going so well people legit through it must be a ponzi! But we did not have in-flow of clients. On this I again blame myself. I sort of assumed this would all work itself out and did not put focus on fixing problems before they became problems.
There was a lot of pressure on everyone. E got into a new romantic relationship. I think she was heavily influenced by this person (I found E to be good hearted on the whole). E and M started to get along less and less. Then E and M seemed to hate each other. It all seemed to come from nowhere, but it quickly got to the point me and M felt it was not working with E, and she thought the same.
Pretty much everything is based upon the story told to the blogger by E. As I've said before I found her to be a good heart overall and believe she was influenced into doing what she did, and would not have done it on her own gumption. Therefore I won't rip into her; but if you're reading, 'E' (Won't be lol) - that was a bit naughty, wasn't it? Little 'Economic with the truth'.

Why would the blogger post such big claims with no evidence?

People should ask themselves this on the first read through of the blog, to be fair. If you're a single source reporting on a story - tell how you know it's true. I think this mainly came down to revenge. After the ponzi thing I wrote blog line by line ripping the initial blog to bits. It was written in a very cheeky sort of tone, and what I was saying was right.
He then played, "My blog's bigger than your blog" , on which he was right.

If you think there is some smoking gun here in any way, just email the blogger and ask them how they know. What evidence were they ever given any money was stolen. There was none.

Money taken from the company:

In it's sad and drawn out end, cash on hand and assets within the company got down to around $10,000 and we were due out over 10* this to clients who I wanted to pay back. I was not bringing in new business (It seemed unethical to do until I fixed old problems - this was a miscalculation. No business was the big problem) and there was the 50K fine.
The company was essentially bankrupt. I wanted to use the remaining 10K to have one last ditch effort to re-coup losses, or randomly select clients to pay the 10K to. M didn't. At this time we fell out (Forever). I have no idea what happened to that 10K. I think M probably kept it. At the time I was livid about that - but to be honest, after all the work she did she deserved something. Losing was not her fault. To 'M' if you're reading (Won't be), I'm sorry.

What went wrong?


I was not good enough. When I got ahead I thought I was coasting. I came from a background of having nothing and as soon as I started to make a few grand I assumed I was gliding to being a millionaire. I stopped learning. Stopped improving. I never watered what I planted, and it withered and died.
I fail. Turns out you can not coast up a learning curve without ending up on your arse.
submitted by 2020sbear to u/2020sbear [link] [comments]

Gold approaches 9-year peak

Gold approaches 9-year peak
Gold prices on Tuesday climbed to a nearly nine-year high as investors continued to seek refuge in the precious metal as a safe haven amid surging Covid-19 infections worldwide.

https://preview.redd.it/j9pedjxn8cc51.jpg?width=1500&format=pjpg&auto=webp&s=890bf4fe3b201058d78200d5e9f0d8af883b51b3
The local gold price climbed at a moderate pace as the baht strengthened against the US dollar.
The price of gold peaked at US$1,824.5 an ounce on Tuesday, the highest level since September 2011, as global infections surpassed more than 14.8 million cases and over 613,000 deaths.
The SPDR fund bought 4.97 tonnes of gold on Monday after buying 6.43 tonnes last week.
Gold was lifted by a weaker US dollar and fireworks in silver, which climbed 3% to $19.33 an ounce overnight, said Jeffrey Halley, senior market analyst for Asia-Pacific at forex firm Oanda.
"A move through $1,820 an ounce [for gold] should see more stop-loss sellers, as well as model-driven buyers, hit the market," Mr Halley said. "That could lead to a reasonably rapid spike by gold into the mid-1,830s an ounce, reinvigorating gold's rally."
Jitti Tangsithpakdi, chairman of the Gold Traders Association and owner of Chin Hua Heng Goldsmith, said gold continues to rise because of the weaker dollar and the global economic slowdown.
If the economic downturn does not reverse, gold will remain as a safe-haven asset, Mr Jitti said, adding that the pandemic and foreign exchange volatility have contributed to the surge in prices.
On the domestic front, gold edged up to 27,300 baht per baht-weight as the baht strengthened to 31.67 against the dollar at press time, up from 31.80 on Monday.
"Gold, as a safe haven when the global economy is in downturn, is investible because the price continues to be on an upward trend supported by the uncertainty of the Covid-19 pandemic and progress towards a vaccine," said MTS Gold chairman Kritcharat Hirunyasiri.
Mr Kritcharat said investors should invest with caution and buy gold when the price falls to $1,805 for global spot and 27,000 baht for domestic gold.
Tanarat Pasawongse, chief executive of Hua Seng Heng Group, said global gold prices in the medium term are expected to move upward, while sideways movement is anticipated in the short term, with a resistance line at $1,830-$1,850.
For gold futures investors, the resistance line is 27,610 baht and the support line is 27,100 baht, he said.
submitted by MIEX_Official to u/MIEX_Official [link] [comments]

Immediate Aftermath : The more data we collect and analyze, the clearer the picture becomes.

This is the updated first part of the list that has recorded the notable events as the world deals with the COVID-19 pandemic. [2nd Part] ― The LINKS to events and sources are placed throughout the timeline.
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The More Data We Collect and Analyze, the Clearer the Picture Becomes.
Someone threw a stone in a pond a long way away. And we're only just feeling the ripples. — Fukuhara from Giri/Haji, Netflix series
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On Jan 30, Italian PM announced that Italy had blocked all flights to and from China. While Italy has banned people from air-travelling to China, however according to IATA data, there's no measurement implemented for air-travellers from China into Italy till the Mar 07. Especially for Chinese people who have EU passports.
On Jan 31, the US announced the category-I travel restrictions, barring all foreigners who have been in China for the past 14 days, with measures including the refusal of visas and mandatory quarantine.
• "Because the US focused on China and didn't expect the infected people's entry from Europe and the Middle East, the Maginot Line was breached from behind. And so little of credible data at the beginning made the US government to miscalculate its strategic response to the virus." — Dr. Zhang Lun, currently a visiting scholar at Harvard (economics & sociology), during the interview with ICPC on Mar 29.
Also on Jan 31, the WHO changed its tune and declared the coronavirus outbreak a Global Public Health Emergency of international concern (PHEIC).
Decisions on a PHEIC always involve politics .... West African countries discouraged a declaration in 2014 after they were hit by the largest Ebola virus outbreak on record, mainly because of concern about the economic impact.
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On Feb 02, regarding the US category-I travel restrictions, Kamala Harris, the former Democratic presidential candidate, declared on Twitter:
Since 2017, Trump’s travel bans have never been rooted in national security—they’re about discriminating against people of color. They are, without a doubt, rooted in anti-immigrant, white supremacist ideologies. This travel ban is no different.
On Feb 03, criticizing Trump for his travel restrictions continues. Chinese foreign ministry spokeswoman Hua Chunying (华春莹), a Peking University professors James Liang (梁建章), New York Times, the Nation, OBSERVER, the Boston Globe, Yahoo, and Daily Kos were saying,
it's a "panicky" decision and "racist" or it's "cruel and callous," he's stoking fear for political gains, and the president is "inappropriately overreacting." And professors Liang even said the US ban "will hurt goodwill and cooperation [with China] in the future." [1] [2] [3] [4] [5] [6] [7] [8] [9]
Also on Feb 03, Mr. Tedros of the WHO said there's no need for travel ban measure that "unnecessarily interfere with international travel and trade" trying to halt the spread of the virus.
China's delegate took the floor ... and denounced measures by "some countries" that have denied entry to people holding passports issued in Hubei province - at the centre of the outbreak - and to deny visas and cancel flights.
Also on Feb 03, China is expected to gradually implement a larger stimulus packages (in total) than a USD $572 billion from 2008. — We'd never find out but my guess is that the fund will probably go to Shanghai clique.
On Feb 04, The FDA has given emergency authorization to a new test kit by the CDC that promises to help public health labs meet a potential surge in cases.
The speed ... pushing through a new diagnostic test shows just how seriously they’re taking the potentially pandemic threat of 2019-nCoV. It’s also a sign that the world is starting to learn how to deal with an onslaught of new pathogens.
Also on Feb 04, the Wuhan Institute of Virology and China's Academy of Military Medical Sciences (AMMS, Chief Chen Wei belongs to) have jointly applied to patent the use of Remdesivir. Scientists from both institutes said in a paper published in Nature’s Cell Research that they found both Remdesivir and Chloroquine to be an effective way to inhibit the coronavirus.
On Feb 06, Jamestown Foundation, a Washington-based research & analysis unit, noted that with State Council of PRC praising his performance of containing the pandemic situation, the council expanded Li Keqiang's political control over Politburo Standing Committee of CCP. (Li Keqiang = Communist Youth League = Shanghai clique)
Also, on Feb 06, as the US evacuation planes leave China, the wave of the US evacuees have arrived who are met by the CDC personnel at the quarantine sites for screening, and those who were suspected of infection will be placed under quarantine for 14 days.
Also, on Feb 06, a CDC-developed lab test kit to detect the new coronavirus began shipping to qualified US laboratories and international ones. — However, on Feb 12, the CDC said some of the testing kits have flaws and do not work properly. The CDC finally ended up shipping the working test kits for mass testings on Feb 27. This was three weeks later than originally planned.
On Feb 07, China National Petroleum has recently declared Force Majeure on gas imports. They are trying to create a breathing room for their foreign exchange reserves shortage. China's foreign exchange reserves fell to mere USD $3.1 trillion in Oct. 2019.
On the same day, Bloomberg reported that PetroChina has directed employees in 20 countries to buy N95 face masks and send them home in China. The goal is to get 2 million masks shipped back. You can also find YouTube videos that show Overseas Chinese are scouring the masks at the Home Depot to ship them to China (the video in Korean). Also Chris Smith is pissed.
On Feb 09, Trump renews his national emergency on its southern border, and Elizabeth Goitein from the Brennan Center for Justice, published an opinion article on New York Times titled "Trump Has Abused This Power. And He Will Again if He’s Not Stopped."
On Feb 10, Dr. Tedros said that an advance three-person team of the WHO arrived in Beijing for a joint mission to discuss with Chinese officials the agenda and questions. Then, the joint mission of about 10 international experts will soon follow, he said. — Those WHO experts ended up visiting Chinese epicentre for the first time on Feb 24.
On Feb 12, the US targets Russian oil company for helping Venezuela skirt sanctions. The US admin seemingly tried to secure leverage against Russia after noticing something suspicious was up.
On the same day, Trump told Reuters "I hope this outbreak or this event (for the US) may be over in something like April." — Dr. Zhong Nanshan (钟南山), China's top tier SARS-hero doctor, also said "the peak of the virus (for China) should come in mid to late February, followed by a plateau or decrease," adding that his forecast was based on on mathematical modelling and data from recent events and government action.
On Feb 13, Tom Frieden who is a former US CDC chief and currently the head of public health nonprofit Resolve to Save Lives, said:
As countries are trying to develop their own control strategies, they are looking for evidence of whether the situation in China is getting worse or better. [But] We still don't have very basic information. [since the WHO just entered China] We hope that information will be coming out.
On the same day, the CDC reports that the 15th case in the US was confirmed. The patient was a part of group who were under a federal quarantine order at the JBSA-Lackland base because of a recent trip to Hubei Province, China.
By Feb 13, China hasn't accepted the US CDC's offer to send top experts, and they haven't released the "disaggregated" data (specific figures broken out from the overall numbers) even though repeatedly been asked.
On Feb 14, CCP's United Front posted an article on its official website, saying (Eng. text by Google Translation):
Fast! There is no time difference to raise urgently needed materials! Some Overseas Chinese have used their professions in the field of medicine in order to purchase relevant materials Hubei province in short of supply (to send them to China). .... Some Overseas Chinese took advantage of the connection resources, opened green transportation channels through our embassies and consulates abroad, and their related enterprises, and quickly sent large quantities of medical supplies (to China), making this love relay link and cooperation seamless.
On Feb 18, Reuters reports that 3M is on the list of firms eligible for China loans to ease coronavirus crisis.
There is no indication from the list that loans offered will necessarily be sought, or that such firms are in any financial need. The Bank of Shanghai told Reuters it will lend 5.5 billion yuan ($786 million) to 57 firms on its list.
On Feb 21, Xi Jinping writes a thank-you letter to Bill Gates for his foundation’s support to China regarding COVID-19 outbreak.
On Feb 24, China was rumoured on Twitter to delay the phase one trade deal implementation indefinitely which includes the increase of China's purchasing American products & services by at least $200 billion over the next two years.
Also on Feb 24, S&P 500 Index started to drop. Opened with 3225.9 and closed 3128.2. By the Mar 23, it dropped to 2208.9.
Also on Feb 24, China's National Health Commission says the WHO experts have visited Wuhan city for the first time, the locked-down central Chinese city at the epicentre, inspecting two hospitals and a makeshift one at a sports centre.
On Feb 26, IF the picture that has been circulated on Twitter were real, then chief Chen Wei and her team have developed the first batch of COVID-19 vaccine within time frame of a month.
On the same day, the CDC's latest figures displays 59 people in the US who have tested positive for COVID-19.
Also on Feb 26, the Washington Post published an article that says:
.... the WHO said it has repeatedly asked Chinese officials for "disaggregated" data — meaning specific figures broken out from the overall numbers — that could shed light on hospital transmission and help assess the level of risk front-line workers face. "We received disaggregated information at intervals, though not details about health care workers," said Tarik Jasarevic of the WHO. — The comment, in an email on Feb 22 to the Post, was one of the first instances that the WHO had directly addressed shortcomings in China's reporting or handling of the coronavirus crisis.
On Feb 27, after missteps, the CDC says its test kit is ready and the US started to expand testing.
On Feb 28, China transferred more than 80,000 Uighurs to factories used by global brands such as Apple, Nike, & Volkswagen & among others.
Also on Feb 28, the WHO published the official report of the WHO-China joint mission on coronavirus disease 2019. (PDF)
On Feb 29, quoting Caixin media's investigation published on the same day, Lianhe Zaobao, the largest Singapore-based Chinese-language newspaper, published an article reporting the following:
Dr. Li Wenliang said in the interview with Caixin media; [in Dec 2019] another doctor (later turned out to be Dr. Ai Fen) examined and tried to treat a patient who exhibited SARS-like symptoms which akin to influenza resistant to conventional treatment methods. And "the family members who took care of her (the patient) that night also had a fever, and her other daughter also had a fever. This is obviously from person to person" Dr. Li said in the interview."
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On Mar 01, China's State Council super tighten up their already draconian internet law.
On the same day, Princelings published an propaganda called "A Battle Against Epidemic: China Combating COVID-19 in 2020" which compiles numerous state media accounts on the heroic leadership of Xi Jinping, the vital role of the Communist Party, and the superiority of the Chinese system in fighting the virus.
Starting on Mar 03, the US Fed has taken two significant measures to provide monetary stimulus. It's going to be no use as if a group of people with serious means are manipulating the markets to make sure MM will have liquidity concerns when they need it most.
On Mar 04, Xinhua News, China's official state-run press agency posted an article "Be bold: the world should thank China" which states that
If China retaliates against the US at this time, it will also announce strategic control over medical products, and ban exports of said products to the US. ... If China declares today that its drugs are for domestic use only, the US will fall into the hell of new coronavirus epidemic.
On Mar 05, Shanghai Index has recovered the coronavirus loss almost completely.
On Mar 07, Saudi's Ahmed bin Abdulaziz and Muhammad bin Nayef were arrested on the claims of plotting to overthrow King Salman. — Ahmed bin Abdulaziz is known to have very tight investment-interest relationship with Bill Gates, Bill Browder, Blackstone, & BlackRock: One common factor that connects these people is China.
On Mar 08, the Russia–Saudi oil price war has begun. The ostensible reason was simple: China, the biggest importer of oil from Saudi and Russia, was turning back tankers while claiming that the outbreak forced its economy to a standstill.
On Mar 10, the Washington Post published the article saying that the trade group for manufacturers of personal protective equipment urged in 2009 "immediate action" to restock the national stockpile including N95 masks, but it hasn't been replenished since.
On Mar 11, the gentleman at the WHO declares the coronavirus outbreak a "Global Pandemic." He called on governments to change the course of the outbreak by taking "urgent and aggressive action." This was a full twelve days after the organization published the official report regarding the situation in China.
On Mar 13, the US admin declared a National Emergency and announced the plan to release $50 billion in federal resources amid COVID-19.
Also on Mar 13, China's Ministry of Commerce states that China is now the best region for global investment hedging.
On Mar 15, Business Insider reports that Trump tried to poach German scientists working on a coronavirus vaccine and offered cash so it would be exclusive to the US. The problem is the official CureVac (the German company) twitter account, on Mar 16, 2020, tweeted the following:
To make it clear again on coronavirus: CureVac has not received from the US government or related entities an offer before, during and since the Task Force meeting in the White House on March 2. CureVac rejects all allegations from press.
On Mar 16, the fan club of European globalists has published a piece titled, "China and Coronavirus: From Home-Made Disaster to Global Mega-Opportunity." The piece says:
The Chinese method is the only method that has proved successful [in fighting the virus], is a message spread online in China by influencers, including many essentially promoting propaganda. ... it is certainly a message that seems to be resonating with opinion leaders around the world.
On the same day, unlike China that had one epicentre, Wuhan city, the US now overtakes China with most cases reporting multiple epicentres simultaneously.
Also on Mar 16, the US stocks ended sharply lower with the Dow posting its worst point drop in history. But some showed a faint hint of uncertain hope.
On Mar 17, according to an article on Chinese version of Quora, Zhihu, chief Chen Wei and her team with CanSino Biologics officially initiated a Phase-1 clinical trial for COVID-19 vaccine at the Wuhan lab, Hubei China, which Bloomberg News confirmed. — Click HERE, then set its time period as 1 year, and see when the graph has started to move up.
Also on Mar 17, China's state media, China Global TV Network (CGTN), has produced YouTube videos for Middle Eastern audiences to spread the opinion that the US has engineered COVID-19 events.
Also on Mar 17, Al Jazeera reported that the US President has been criticized for repeatedly referring to the coronavirus as the "Chinese Virus" as critics saying Trump is "fueling bigotry."
• China's Xinhua News tweeted "Racism is not the right tool to cover your own incompetence."
• Tucker Carlson asked: "Why would America's media take China's side amid coronavirus pandemic?"
• Also, Mr. Bill Gates: "We should not call this the Chinese virus."
On Mar 19, for the first time, China reports zero local infections.
Also on Mar 19, Al Jazeera published an analysis report, titled "Coronavirus erodes Trump's re-election prospects."
On Mar 22, Bloomberg reports that China's mobile carriers lost 21 million users during this pandemic event. It's said to be the first net decline since starting to report monthly data in 2000.
On Mar 26, EURACTV reports that China cashes in off coronavirus, selling Spain $466 million in supplies. However, Spain returns 9,000 "quick result" test kits to China, because they were deemed substandard. — Especially the sensibility of the test was around 30 percent, when it should be higher than 80 percent.
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On Apr 03, Germany and other governments are bolstering corporate defenses to address worries that coronavirus-weakened companies could be easy prey for bargain hunting by China's state owned businesses.
On Apr 05, New York Times says "Trump Again Promotes Use of Unproven Anti-Malaria Drug (hydroxychloroquine)."
On Apr 06, a Democratic State Rep. Karen Whitsett from Detroit credits hydroxychloroquine and President Trump for "saving her in her battle with the coronavirus."
On Apr 07, the US CDC removed the following part from its website.
Although optimal dosing and duration of hydroxychloroquine for treatment of COVID-19 are unknown, some U.S. clinicians have reported anecdotally different hydroxychloroquine dosing such as: 400mg BID on day one, then daily for 5 days; 400 mg BID on day one, then 200mg BID for 4 days; 600 mg BID on day one, then 400mg daily on days 2-5.
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☞ If there were ever a time for people not to be partisan and tribal, the time has come: We need to be ever vigilant and attentive to all kinds of disinformation & misinformation to see it better as well as to be sharp in our lives. — We really do need to come together.
☞ At first, I was going to draw up a conspiracy theory-oriented list focused on Team-Z, especially Mr. Gates. However, although it's nothing new tbh, recently many chats and discussions seem overflowing with disinformation & misinformation which is, in my opinion, particularly painful at a time like this. Hence, this post became a vanilla list that's just recorded the notable events. — We all are subject to misinformation, miscalculation, and misjudgment. But the clearer the picture becomes the better we can identify Funkspiel.
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Immediate Aftermath pt.2.a
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Feasible Timeline of the Operation
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☞ Go Back to the Short Story.
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submitted by vanillabluesea to conspiracy [link] [comments]

Hibiscus Petroleum Berhad (5199.KL)


https://preview.redd.it/gp18bjnlabr41.jpg?width=768&format=pjpg&auto=webp&s=6054e7f52e8d52da403016139ae43e0e799abf15
Download PDF of this article here: https://docdro.id/6eLgUPo
In light of the recent fall in oil prices due to the Saudi-Russian dispute and dampening demand for oil due to the lockdowns implemented globally, O&G stocks have taken a severe beating, falling approximately 50% from their highs at the beginning of the year. Not spared from this onslaught is Hibiscus Petroleum Berhad (Hibiscus), a listed oil and gas (O&G) exploration and production (E&P) company.
Why invest in O&G stocks in this particularly uncertain period? For one, valuations of these stocks have fallen to multi-year lows, bringing the potential ROI on these stocks to attractive levels. Oil prices are cyclical, and are bound to return to the mean given a sufficiently long time horizon. The trick is to find those companies who can survive through this downturn and emerge into “normal” profitability once oil prices rebound.
In this article, I will explore the upsides and downsides of investing in Hibiscus. I will do my best to cater this report to newcomers to the O&G industry – rather than address exclusively experts and veterans of the O&G sector. As an equity analyst, I aim to provide a view on the company primarily, and will generally refrain from providing macro views on oil or opinions about secular trends of the sector. I hope you enjoy reading it!
Stock code: 5199.KL
Stock name: Hibiscus Petroleum Berhad
Financial information and financial reports: https://www.malaysiastock.biz/Corporate-Infomation.aspx?securityCode=5199
Company website: https://www.hibiscuspetroleum.com/

Company Snapshot

Hibiscus Petroleum Berhad (5199.KL) is an oil and gas (O&G) upstream exploration and production (E&P) company located in Malaysia. As an E&P company, their business can be basically described as:
· looking for oil,
· drawing it out of the ground, and
· selling it on global oil markets.
This means Hibiscus’s profits are particularly exposed to fluctuating oil prices. With oil prices falling to sub-$30 from about $60 at the beginning of the year, Hibiscus’s stock price has also fallen by about 50% YTD – from around RM 1.00 to RM 0.45 (as of 5 April 2020).
https://preview.redd.it/3dqc4jraabr41.png?width=641&format=png&auto=webp&s=7ba0e8614c4e9d781edfc670016a874b90560684
https://preview.redd.it/lvdkrf0cabr41.png?width=356&format=png&auto=webp&s=46f250a713887b06986932fa475dc59c7c28582e
While the company is domiciled in Malaysia, its two main oil producing fields are located in both Malaysia and the UK. The Malaysian oil field is commonly referred to as the North Sabah field, while the UK oil field is commonly referred to as the Anasuria oil field. Hibiscus has licenses to other oil fields in different parts of the world, notably the Marigold/Sunflower oil fields in the UK and the VIC cluster in Australia, but its revenues and profits mainly stem from the former two oil producing fields.
Given that it’s a small player and has only two primary producing oil fields, it’s not surprising that Hibiscus sells its oil to a concentrated pool of customers, with 2 of them representing 80% of its revenues (i.e. Petronas and BP). Fortunately, both these customers are oil supermajors, and are unlikely to default on their obligations despite low oil prices.
At RM 0.45 per share, the market capitalization is RM 714.7m and it has a trailing PE ratio of about 5x. It doesn’t carry any debt, and it hasn’t paid a dividend in its listing history. The MD, Mr. Kenneth Gerard Pereira, owns about 10% of the company’s outstanding shares.

Reserves (Total recoverable oil) & Production (bbl/day)

To begin analyzing the company, it’s necessary to understand a little of the industry jargon. We’ll start with Reserves and Production.
In general, there are three types of categories for a company’s recoverable oil volumes – Reserves, Contingent Resources and Prospective Resources. Reserves are those oil fields which are “commercial”, which is defined as below:
As defined by the SPE PRMS, Reserves are “… quantities of petroleum anticipated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions.” Therefore, Reserves must be discovered (by drilling, recoverable (with current technology), remaining in the subsurface (at the effective date of the evaluation) and “commercial” based on the development project proposed.)
Note that Reserves are associated with development projects. To be considered as “commercial”, there must be a firm intention to proceed with the project in a reasonable time frame (typically 5 years, and such intention must be based upon all of the following criteria:)
- A reasonable assessment of the future economics of the development project meeting defined investment and operating criteria; - A reasonable expectation that there will be a market for all or at least the expected sales quantities of production required to justify development; - Evidence that the necessary production and transportation facilities are available or can be made available; and - Evidence that legal, contractual, environmental and other social and economic concerns will allow for the actual implementation of the recovery project being evaluated.
Contingent Resources and Prospective Resources are further defined as below:
- Contingent Resources: potentially recoverable volumes associated with a development plan that targets discovered volumes but is not (yet commercial (as defined above); and) - Prospective Resources: potentially recoverable volumes associated with a development plan that targets as yet undiscovered volumes.
In the industry lingo, we generally refer to Reserves as ‘P’ and Contingent Resources as ‘C’. These ‘P’ and ‘C’ resources can be further categorized into 1P/2P/3P resources and 1C/2C/3C resources, each referring to a low/medium/high estimate of the company’s potential recoverable oil volumes:
- Low/1C/1P estimate: there should be reasonable certainty that volumes actually recovered will equal or exceed the estimate; - Best/2C/2P estimate: there should be an equal likelihood of the actual volumes of petroleum being larger or smaller than the estimate; and - High/3C/3P estimate: there is a low probability that the estimate will be exceeded.
Hence in the E&P industry, it is easy to see why most investors and analysts refer to the 2P estimate as the best estimate for a company’s actual recoverable oil volumes. This is because 2P reserves (‘2P’ referring to ‘Proved and Probable’) are a middle estimate of the recoverable oil volumes legally recognized as “commercial”.
However, there’s nothing stopping you from including 2C resources (riskier) or utilizing 1P resources (conservative) as your estimate for total recoverable oil volumes, depending on your risk appetite. In this instance, the company has provided a snapshot of its 2P and 2C resources in its analyst presentation:
https://preview.redd.it/o8qejdyc8br41.png?width=710&format=png&auto=webp&s=b3ab9be8f83badf0206adc982feda3a558d43e78
Basically, what the company is saying here is that by 2021, it will have classified as 2P reserves at least 23.7 million bbl from its Anasuria field and 20.5 million bbl from its North Sabah field – for total 2P reserves of 44.2 million bbl (we are ignoring the Australian VIC cluster as it is only estimated to reach first oil by 2022).
Furthermore, the company is stating that they have discovered (but not yet legally classified as “commercial”) a further 71 million bbl of oil from both the Anasuria and North Sabah fields, as well as the Marigold/Sunflower fields. If we include these 2C resources, the total potential recoverable oil volumes could exceed 100 million bbl.
In this report, we shall explore all valuation scenarios giving consideration to both 2P and 2C resources.
https://preview.redd.it/gk54qplf8br41.png?width=489&format=png&auto=webp&s=c905b7a6328432218b5b9dfd53cc9ef1390bd604
The company further targets a 2021 production rate of 20,000 bbl (LTM: 8,000 bbl), which includes 5,000 bbl from its Anasuria field (LTM: 2,500 bbl) and 7,000 bbl from its North Sabah field (LTM: 5,300 bbl).
This is a substantial increase in forecasted production from both existing and prospective oil fields. If it materializes, annual production rate could be as high as 7,300 mmbbl, and 2021 revenues (given FY20 USD/bbl of $60) could exceed RM 1.5 billion (FY20: RM 988 million).
However, this targeted forecast is quite a stretch from current production levels. Nevertheless, we shall consider all provided information in estimating a valuation for Hibiscus.
To understand Hibiscus’s oil production capacity and forecast its revenues and profits, we need to have a better appreciation of the performance of its two main cash-generating assets – the North Sabah field and the Anasuria field.

North Sabah oil field
https://preview.redd.it/62nssexj8br41.png?width=1003&format=png&auto=webp&s=cd78f86d51165fb9a93015e49496f7f98dad64dd
Hibiscus owns a 50% interest in the North Sabah field together with its partner Petronas, and has production rights over the field up to year 2040. The asset contains 4 oil fields, namely the St Joseph field, South Furious field, SF 30 field and Barton field.
For the sake of brevity, we shall not delve deep into the operational aspects of the fields or the contractual nature of its production sharing contract (PSC). We’ll just focus on the factors which relate to its financial performance. These are:
· Average uptime
· Total oil sold
· Average realized oil price
· Average OPEX per bbl
With regards to average uptime, we can see that the company maintains relative high facility availability, exceeding 90% uptime in all quarters of the LTM with exception of Jul-Sep 2019. The dip in average uptime was due to production enhancement projects and maintenance activities undertaken to improve the production capacity of the St Joseph and SF30 oil fields.
Hence, we can conclude that management has a good handle on operational performance. It also implies that there is little room for further improvement in production resulting from increased uptime.
As North Sabah is under a production sharing contract (PSC), there is a distinction between gross oil production and net oil production. The former relates to total oil drawn out of the ground, whereas the latter refers to Hibiscus’s share of oil production after taxes, royalties and expenses are accounted for. In this case, we want to pay attention to net oil production, not gross.
We can arrive at Hibiscus’s total oil sold for the last twelve months (LTM) by adding up the total oil sold for each of the last 4 quarters. Summing up the figures yields total oil sold for the LTM of approximately 2,075,305 bbl.
Then, we can arrive at an average realized oil price over the LTM by averaging the average realized oil price for the last 4 quarters, giving us an average realized oil price over the LTM of USD 68.57/bbl. We can do the same for average OPEX per bbl, giving us an average OPEX per bbl over the LTM of USD 13.23/bbl.
Thus, we can sum up the above financial performance of the North Sabah field with the following figures:
· Total oil sold: 2,075,305 bbl
· Average realized oil price: USD 68.57/bbl
· Average OPEX per bbl: USD 13.23/bbl

Anasuria oil field
https://preview.redd.it/586u4kfo8br41.png?width=1038&format=png&auto=webp&s=7580fc7f7df7e948754d025745a5cf47d4393c0f
Doing the same exercise as above for the Anasuria field, we arrive at the following financial performance for the Anasuria field:
· Total oil sold: 1,073,304 bbl
· Average realized oil price: USD 63.57/bbl
· Average OPEX per bbl: USD 23.22/bbl
As gas production is relatively immaterial, and to be conservative, we shall only consider the crude oil production from the Anasuria field in forecasting revenues.

Valuation (Method 1)

Putting the figures from both oil fields together, we get the following data:
https://preview.redd.it/7y6064dq8br41.png?width=700&format=png&auto=webp&s=2a4120563a011cf61fc6090e1cd5932602599dc2
Given that we have determined LTM EBITDA of RM 632m, the next step would be to subtract ITDA (interest, tax, depreciation & amortization) from it to obtain estimated LTM Net Profit. Using FY2020’s ITDA of approximately RM 318m as a guideline, we arrive at an estimated LTM Net Profit of RM 314m (FY20: 230m). Given the current market capitalization of RM 714.7m, this implies a trailing LTM PE of 2.3x.
Performing a sensitivity analysis given different oil prices, we arrive at the following net profit table for the company under different oil price scenarios, assuming oil production rate and ITDA remain constant:
https://preview.redd.it/xixge5sr8br41.png?width=433&format=png&auto=webp&s=288a00f6e5088d01936f0217ae7798d2cfcf11f2
From the above exercise, it becomes apparent that Hibiscus has a breakeven oil price of about USD 41.8863/bbl, and has a lot of operating leverage given the exponential rate of increase in its Net Profit with each consequent increase in oil prices.
Considering that the oil production rate (EBITDA) is likely to increase faster than ITDA’s proportion to revenues (fixed costs), at an implied PE of 4.33x, it seems likely that an investment in Hibiscus will be profitable over the next 10 years (with the assumption that oil prices will revert to the mean in the long-term).

Valuation (Method 2)

Of course, there are a lot of assumptions behind the above method of valuation. Hence, it would be prudent to perform multiple methods of valuation and compare the figures to one another.
As opposed to the profit/loss assessment in Valuation (Method 1), another way of performing a valuation would be to estimate its balance sheet value, i.e. total revenues from 2P Reserves, and assign a reasonable margin to it.
https://preview.redd.it/o2eiss6u8br41.png?width=710&format=png&auto=webp&s=03960cce698d9cedb076f3d5f571b3c59d908fa8
From the above, we understand that Hibiscus’s 2P reserves from the North Sabah and Anasuria fields alone are approximately 44.2 mmbbl (we ignore contribution from Australia’s VIC cluster as it hasn’t been developed yet).
Doing a similar sensitivity analysis of different oil prices as above, we arrive at the following estimated total revenues and accumulated net profit:
https://preview.redd.it/h8hubrmw8br41.png?width=450&format=png&auto=webp&s=6d23f0f9c3dafda89e758b815072ba335467f33e
Let’s assume that the above average of RM 9.68 billion in total realizable revenues from current 2P reserves holds true. If we assign a conservative Net Profit margin of 15% (FY20: 23%; past 5 years average: 16%), we arrive at estimated accumulated Net Profit from 2P Reserves of RM 1.452 billion. Given the current market capitalization of RM 714 million, we might be able to say that the equity is worth about twice the current share price.
However, it is understandable that some readers might feel that the figures used in the above estimate (e.g. net profit margin of 15%) were randomly plucked from the sky. So how do we reconcile them with figures from the financial statements? Fortunately, there appears to be a way to do just that.
Intangible Assets
I refer you to a figure in the financial statements which provides a shortcut to the valuation of 2P Reserves. This is the carrying value of Intangible Assets on the Balance Sheet.
As of 2QFY21, that amount was RM 1,468,860,000 (i.e. RM 1.468 billion).
https://preview.redd.it/hse8ttb09br41.png?width=881&format=png&auto=webp&s=82e48b5961c905fe9273cb6346368de60202ebec
Quite coincidentally, one might observe that this figure is dangerously close to the estimated accumulated Net Profit from 2P Reserves of RM 1.452 billion we calculated earlier. But why would this amount matter at all?
To answer that, I refer you to the notes of the Annual Report FY20 (AR20). On page 148 of the AR20, we find the following two paragraphs:
E&E assets comprise of rights and concession and conventional studies. Following the acquisition of a concession right to explore a licensed area, the costs incurred such as geological and geophysical surveys, drilling, commercial appraisal costs and other directly attributable costs of exploration and appraisal including technical and administrative costs, are capitalised as conventional studies, presented as intangible assets.
E&E assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an E&E asset may exceed its recoverable amount. The Group will allocate E&E assets to cash generating unit (“CGU”s or groups of CGUs for the purpose of assessing such assets for impairment. Each CGU or group of units to which an E&E asset is allocated will not be larger than an operating segment as disclosed in Note 39 to the financial statements.)
Hence, we can determine that firstly, the intangible asset value represents capitalized costs of acquisition of the oil fields, including technical exploration costs and costs of acquiring the relevant licenses. Secondly, an impairment review will be carried out when “the carrying amount of an E&E asset may exceed its recoverable amount”, with E&E assets being allocated to “cash generating units” (CGU) for the purposes of assessment.
On page 169 of the AR20, we find the following:
Carrying amounts of the Group’s intangible assets, oil and gas assets and FPSO are reviewed for possible impairment annually including any indicators of impairment. For the purpose of assessing impairment, assets are grouped at the lowest level CGUs for which there is a separately identifiable cash flow available. These CGUs are based on operating areas, represented by the 2011 North Sabah EOR PSC (“North Sabah”, the Anasuria Cluster, the Marigold and Sunflower fields, the VIC/P57 exploration permit (“VIC/P57”) and the VIC/L31 production license (“VIC/L31”).)
So apparently, the CGUs that have been assigned refer to the respective oil producing fields, two of which include the North Sabah field and the Anasuria field. In order to perform the impairment review, estimates of future cash flow will be made by management to assess the “recoverable amount” (as described above), subject to assumptions and an appropriate discount rate.
Hence, what we can gather up to now is that management will estimate future recoverable cash flows from a CGU (i.e. the North Sabah and Anasuria oil fields), compare that to their carrying value, and perform an impairment if their future recoverable cash flows are less than their carrying value. In other words, if estimated accumulated profits from the North Sabah and Anasuria oil fields are less than their carrying value, an impairment is required.
So where do we find the carrying values for the North Sabah and Anasuria oil fields? Further down on page 184 in the AR20, we see the following:
Included in rights and concession are the carrying amounts of producing field licenses in the Anasuria Cluster amounting to RM668,211,518 (2018: RM687,664,530, producing field licenses in North Sabah amounting to RM471,031,008 (2018: RM414,333,116))
Hence, we can determine that the carrying values for the North Sabah and Anasuria oil fields are RM 471m and RM 668m respectively. But where do we find the future recoverable cash flows of the fields as estimated by management, and what are the assumptions used in that calculation?
Fortunately, we find just that on page 185:
17 INTANGIBLE ASSETS (CONTINUED)
(a Anasuria Cluster)
The Directors have concluded that there is no impairment indicator for Anasuria Cluster during the current financial year. In the previous financial year, due to uncertainties in crude oil prices, the Group has assessed the recoverable amount of the intangible assets, oil and gas assets and FPSO relating to the Anasuria Cluster. The recoverable amount is determined using the FVLCTS model based on discounted cash flows (“DCF” derived from the expected cash in/outflow pattern over the production lives.)
The key assumptions used to determine the recoverable amount for the Anasuria Cluster were as follows:
(i Discount rate of 10%;)
(ii Future cost inflation factor of 2% per annum;)
(iii Oil price forecast based on the oil price forward curve from independent parties; and,)
(iv Oil production profile based on the assessment by independent oil and gas reserve experts.)
Based on the assessments performed, the Directors concluded that the recoverable amount calculated based on the valuation model is higher than the carrying amount.
(b North Sabah)
The acquisition of the North Sabah assets was completed in the previous financial year. Details of the acquisition are as disclosed in Note 15 to the financial statements.
The Directors have concluded that there is no impairment indicator for North Sabah during the current financial year.
Here, we can see that the recoverable amount of the Anasuria field was estimated based on a DCF of expected future cash flows over the production life of the asset. The key assumptions used by management all seem appropriate, including a discount rate of 10% and oil price and oil production estimates based on independent assessment. From there, management concludes that the recoverable amount of the Anasuria field is higher than its carrying amount (i.e. no impairment required). Likewise, for the North Sabah field.
How do we interpret this? Basically, what management is saying is that given a 10% discount rate and independent oil price and oil production estimates, the accumulated profits (i.e. recoverable amount) from both the North Sabah and the Anasuria fields exceed their carrying amounts of RM 471m and RM 668m respectively.
In other words, according to management’s own estimates, the carrying value of the Intangible Assets of RM 1.468 billion approximates the accumulated Net Profit recoverable from 2P reserves.
To conclude Valuation (Method 2), we arrive at the following:

Our estimates Management estimates
Accumulated Net Profit from 2P Reserves RM 1.452 billion RM 1.468 billion

Financials

By now, we have established the basic economics of Hibiscus’s business, including its revenues (i.e. oil production and oil price scenarios), costs (OPEX, ITDA), profitability (breakeven, future earnings potential) and balance sheet value (2P reserves, valuation). Moving on, we want to gain a deeper understanding of the 3 statements to anticipate any blind spots and risks. We’ll refer to the financial statements of both the FY20 annual report and the 2Q21 quarterly report in this analysis.
For the sake of brevity, I’ll only point out those line items which need extra attention, and skip over the rest. Feel free to go through the financial statements on your own to gain a better familiarity of the business.
https://preview.redd.it/h689bss79br41.png?width=810&format=png&auto=webp&s=ed47fce6a5c3815dd3d4f819e31f1ce39ccf4a0b
Income Statement
First, we’ll start with the Income Statement on page 135 of the AR20. Revenues are straightforward, as we’ve discussed above. Cost of Sales and Administrative Expenses fall under the jurisdiction of OPEX, which we’ve also seen earlier. Other Expenses are mostly made up of Depreciation & Amortization of RM 115m.
Finance Costs are where things start to get tricky. Why does a company which carries no debt have such huge amounts of finance costs? The reason can be found in Note 8, where it is revealed that the bulk of finance costs relate to the unwinding of discount of provision for decommissioning costs of RM 25m (Note 32).
https://preview.redd.it/4omjptbe9br41.png?width=1019&format=png&auto=webp&s=eaabfc824134063100afa62edfd36a34a680fb60
This actually refers to the expected future costs of restoring the Anasuria and North Sabah fields to their original condition once the oil reserves have been depleted. Accounting standards require the company to provide for these decommissioning costs as they are estimable and probable. The way the decommissioning costs are accounted for is the same as an amortized loan, where the initial carrying value is recognized as a liability and the discount rate applied is reversed each year as an expense on the Income Statement. However, these expenses are largely non-cash in nature and do not necessitate a cash outflow every year (FY20: RM 69m).
Unwinding of discount on non-current other payables of RM 12m relate to contractual payments to the North Sabah sellers. We will discuss it later.
Taxation is another tricky subject, and is even more significant than Finance Costs at RM 161m. In gist, Hibiscus is subject to the 38% PITA (Petroleum Income Tax Act) under Malaysian jurisdiction, and the 30% Petroleum tax + 10% Supplementary tax under UK jurisdiction. Of the RM 161m, RM 41m of it relates to deferred tax which originates from the difference between tax treatment and accounting treatment on capitalized assets (accelerated depreciation vs straight-line depreciation). Nonetheless, what you should take away from this is that the tax expense is a tangible expense and material to breakeven analysis.
Fortunately, tax is a variable expense, and should not materially impact the cash flow of Hibiscus in today’s low oil price environment.
Note: Cash outflows for Tax Paid in FY20 was RM 97m, substantially below the RM 161m tax expense.
https://preview.redd.it/1xrnwzm89br41.png?width=732&format=png&auto=webp&s=c078bc3e18d9c79d9a6fbe1187803612753f69d8
Balance Sheet
The balance sheet of Hibiscus is unexciting; I’ll just bring your attention to those line items which need additional scrutiny. I’ll use the figures in the latest 2Q21 quarterly report (2Q21) and refer to the notes in AR20 for clarity.
We’ve already discussed Intangible Assets in the section above, so I won’t dwell on it again.
Moving on, the company has Equipment of RM 582m, largely relating to O&G assets (e.g. the Anasuria FPSO vessel and CAPEX incurred on production enhancement projects). Restricted cash and bank balances represent contractual obligations for decommissioning costs of the Anasuria Cluster, and are inaccessible for use in operations.
Inventories are relatively low, despite Hibiscus being an E&P company, so forex fluctuations on carrying value of inventories are relatively immaterial. Trade receivables largely relate to entitlements from Petronas and BP (both oil supermajors), and are hence quite safe from impairment. Other receivables, deposits and prepayments are significant as they relate to security deposits placed with sellers of the oil fields acquired; these should be ignored for cash flow purposes.
Note: Total cash and bank balances do not include approximately RM 105 m proceeds from the North Sabah December 2019 offtake (which was received in January 2020)
Cash and bank balances of RM 90m do not include RM 105m of proceeds from offtake received in 3Q21 (Jan 2020). Hence, the actual cash and bank balances as of 2Q21 approximate RM 200m.
Liabilities are a little more interesting. First, I’ll draw your attention to the significant Deferred tax liabilities of RM 457m. These largely relate to the amortization of CAPEX (i.e. Equipment and capitalized E&E expenses), which is given an accelerated depreciation treatment for tax purposes.
The way this works is that the government gives Hibiscus a favorable tax treatment on capital expenditures incurred via an accelerated depreciation schedule, so that the taxable income is less than usual. However, this leads to the taxable depreciation being utilized quicker than accounting depreciation, hence the tax payable merely deferred to a later period – when the tax depreciation runs out but accounting depreciation remains. Given the capital intensive nature of the business, it is understandable why Deferred tax liabilities are so large.
We’ve discussed Provision for decommissioning costs under the Finance Costs section earlier. They are also quite significant at RM 266m.
Notably, the Other Payables and Accruals are a hefty RM 431m. What do they relate to? Basically, they are contractual obligations to the sellers of the oil fields which are only payable upon oil prices reaching certain thresholds. Hence, while they are current in nature, they will only become payable when oil prices recover to previous highs, and are hence not an immediate cash outflow concern given today’s low oil prices.
Cash Flow Statement
There is nothing in the cash flow statement which warrants concern.
Notably, the company generated OCF of approximately RM 500m in FY20 and RM 116m in 2Q21. It further incurred RM 330m and RM 234m of CAPEX in FY20 and 2Q21 respectively, largely owing to production enhancement projects to increase the production rate of the Anasuria and North Sabah fields, which according to management estimates are accretive to ROI.
Tax paid was RM 97m in FY20 and RM 61m in 2Q21 (tax expense: RM 161m and RM 62m respectively).

Risks

There are a few obvious and not-so-obvious risks that one should be aware of before investing in Hibiscus. We shall not consider operational risks (e.g. uptime, OPEX) as they are outside the jurisdiction of the equity analyst. Instead, we shall focus on the financial and strategic risks largely outside the control of management. The main ones are:
· Oil prices remaining subdued for long periods of time
· Fluctuation of exchange rates
· Customer concentration risk
· 2P Reserves being less than estimated
· Significant current and non-current liabilities
· Potential issuance of equity
Oil prices remaining subdued
Of topmost concern in the minds of most analysts is whether Hibiscus has the wherewithal to sustain itself through this period of low oil prices (sub-$30). A quick and dirty estimate of annual cash outflow (i.e. burn rate) assuming a $20 oil world and historical production rates is between RM 50m-70m per year, which considering the RM 200m cash balance implies about 3-4 years of sustainability before the company runs out of cash and has to rely on external assistance for financing.
Table 1: Hibiscus EBITDA at different oil price and exchange rates
https://preview.redd.it/gxnekd6h9br41.png?width=670&format=png&auto=webp&s=edbfb9621a43480d11e3b49de79f61a6337b3d51
The above table shows different EBITDA scenarios (RM ‘m) given different oil prices (left column) and USD:MYR exchange rates (top row). Currently, oil prices are $27 and USD:MYR is 1:4.36.
Given conservative assumptions of average OPEX/bbl of $20 (current: $15), we can safely say that the company will be loss-making as long as oil remains at $20 or below (red). However, we can see that once oil prices hit $25, the company can tank the lower-end estimate of the annual burn rate of RM 50m (orange), while at RM $27 it can sufficiently muddle through the higher-end estimate of the annual burn rate of RM 70m (green).
Hence, we can assume that as long as the average oil price over the next 3-4 years remains above $25, Hibiscus should come out of this fine without the need for any external financing.
Customer Concentration Risk
With regards to customer concentration risk, there is not much the analyst or investor can do except to accept the risk. Fortunately, 80% of revenues can be attributed to two oil supermajors (Petronas and BP), hence the risk of default on contractual obligations and trade receivables seems to be quite diminished.
2P Reserves being less than estimated
2P Reserves being less than estimated is another risk that one should keep in mind. Fortunately, the current market cap is merely RM 714m – at half of estimated recoverable amounts of RM 1.468 billion – so there’s a decent margin of safety. In addition, there are other mitigating factors which shall be discussed in the next section (‘Opportunities’).
Significant non-current and current liabilities
The significant non-current and current liabilities have been addressed in the previous section. It has been determined that they pose no threat to immediate cash flow due to them being long-term in nature (e.g. decommissioning costs, deferred tax, etc). Hence, for the purpose of assessing going concern, their amounts should not be a cause for concern.
Potential issuance of equity
Finally, we come to the possibility of external financing being required in this low oil price environment. While the company should last 3-4 years on existing cash reserves, there is always the risk of other black swan events materializing (e.g. coronavirus) or simply oil prices remaining muted for longer than 4 years.
Furthermore, management has hinted that they wish to acquire new oil assets at presently depressed prices to increase daily production rate to a targeted 20,000 bbl by end-2021. They have room to acquire debt, but they may also wish to issue equity for this purpose. Hence, the possibility of dilution to existing shareholders cannot be entirely ruled out.
However, given management’s historical track record of prioritizing ROI and optimal capital allocation, and in consideration of the fact that the MD owns 10% of outstanding shares, there is some assurance that any potential acquisitions will be accretive to EPS and therefore valuations.

Opportunities

As with the existence of risk, the presence of material opportunities also looms over the company. Some of them are discussed below:
· Increased Daily Oil Production Rate
· Inclusion of 2C Resources
· Future oil prices exceeding $50 and effects from coronavirus dissipating
Increased Daily Oil Production Rate
The first and most obvious opportunity is the potential for increased production rate. We’ve seen in the last quarter (2Q21) that the North Sabah field increased its daily production rate by approximately 20% as a result of production enhancement projects (infill drilling), lowering OPEX/bbl as a result. To vastly oversimplify, infill drilling is the process of maximizing well density by drilling in the spaces between existing wells to improve oil production.
The same improvements are being undertaken at the Anasuria field via infill drilling, subsea debottlenecking, water injection and sidetracking of existing wells. Without boring you with industry jargon, this basically means future production rate is likely to improve going forward.
By how much can the oil production rate be improved by? Management estimates in their analyst presentation that enhancements in the Anasuria field will be able to yield 5,000 bbl/day by 2021 (current: 2,500 bbl/day).
Similarly, improvements in the North Sabah field is expected to yield 7,000 bbl/day by 2021 (current: 5,300 bbl/day).
This implies a total 2021 expected daily production rate from the two fields alone of 12,000 bbl/day (current: 8,000 bbl/day). That’s a 50% increase in yields which we haven’t factored into our valuation yet.
Furthermore, we haven’t considered any production from existing 2C resources (e.g. Marigold/Sunflower) or any potential acquisitions which may occur in the future. By management estimates, this can potentially increase production by another 8,000 bbl/day, bringing total production to 20,000 bbl/day.
While this seems like a stretch of the imagination, it pays to keep them in mind when forecasting future revenues and valuations.
Just to play around with the numbers, I’ve come up with a sensitivity analysis of possible annual EBITDA at different oil prices and daily oil production rates:
Table 2: Hibiscus EBITDA at different oil price and daily oil production rates
https://preview.redd.it/jnpfhr5n9br41.png?width=814&format=png&auto=webp&s=bbe4b512bc17f576d87529651140cc74cde3d159
The left column represents different oil prices while the top row represents different daily oil production rates.
The green column represents EBITDA at current daily production rate of 8,000 bbl/day; the orange column represents EBITDA at targeted daily production rate of 12,000 bbl/day; while the purple column represents EBITDA at maximum daily production rate of 20,000 bbl/day.
Even conservatively assuming increased estimated annual ITDA of RM 500m (FY20: RM 318m), and long-term average oil prices of $50 (FY20: $60), the estimated Net Profit and P/E ratio is potentially lucrative at daily oil production rates of 12,000 bbl/day and above.
2C Resources
Since we’re on the topic of improved daily oil production rate, it bears to pay in mind the relatively enormous potential from Hibiscus’s 2C Resources. North Sabah’s 2C Resources alone exceed 30 mmbbl; while those from the yet undiagnosed Marigold/Sunflower fields also reach 30 mmbbl. Altogether, 2C Resources exceed 70 mmbbl, which dwarfs the 44 mmbbl of 2P Reserves we have considered up to this point in our valuation estimates.
To refresh your memory, 2C Resources represents oil volumes which have been discovered but are not yet classified as “commercial”. This means that there is reasonable certainty of the oil being recoverable, as opposed to simply being in the very early stages of exploration. So, to be conservative, we will imagine that only 50% of 2C Resources are eligible for reclassification to 2P reserves, i.e. 35 mmbbl of oil.
https://preview.redd.it/mto11iz7abr41.png?width=375&format=png&auto=webp&s=e9028ab0816b3d3e25067447f2c70acd3ebfc41a
This additional 35 mmbbl of oil represents an 80% increase to existing 2P reserves. Assuming the daily oil production rate increases similarly by 80%, we will arrive at 14,400 bbl/day of oil production. According to Table 2 above, this would yield an EBITDA of roughly RM 630m assuming $50 oil.
Comparing that estimated EBITDA to FY20’s actual EBITDA:
FY20 FY21 (incl. 2C) Difference
Daily oil production (bbl/day) 8,626 14,400 +66%
Average oil price (USD/bbl) $68.57 $50 -27%
Average OPEX/bbl (USD) $16.64 $20 +20%
EBITDA (RM ‘m) 632 630 -
Hence, even conservatively assuming lower oil prices and higher OPEX/bbl (which should decrease in the presence of higher oil volumes) than last year, we get approximately the same EBITDA as FY20.
For the sake of completeness, let’s assume that Hibiscus issues twice the no. of existing shares over the next 10 years, effectively diluting shareholders by 50%. Even without accounting for the possibility of the acquisition of new oil fields, at the current market capitalization of RM 714m, the prospective P/E would be about 10x. Not too shabby.
Future oil prices exceeding $50 and effects from coronavirus dissipating
Hibiscus shares have recently been hit by a one-two punch from oil prices cratering from $60 to $30, as a result of both the Saudi-Russian dispute and depressed demand for oil due to coronavirus. This has massively increased supply and at the same time hugely depressed demand for oil (due to the globally coordinated lockdowns being implemented).
Given a long enough timeframe, I fully expect OPEC+ to come to an agreement and the economic effects from the coronavirus to dissipate, allowing oil prices to rebound. As we equity investors are aware, oil prices are cyclical and are bound to recover over the next 10 years.
When it does, valuations of O&G stocks (including Hibiscus’s) are likely to improve as investors overshoot expectations and begin to forecast higher oil prices into perpetuity, as they always tend to do in good times. When that time arrives, Hibiscus’s valuations are likely to become overoptimistic as all O&G stocks tend to do during oil upcycles, resulting in valuations far exceeding reasonable estimates of future earnings. If you can hold the shares up until then, it’s likely you will make much more on your investment than what we’ve been estimating.

Conclusion

Wrapping up what we’ve discussed so far, we can conclude that Hibiscus’s market capitalization of RM 714m far undershoots reasonable estimates of fair value even under conservative assumptions of recoverable oil volumes and long-term average oil prices. As a value investor, I hesitate to assign a target share price, but it’s safe to say that this stock is worth at least RM 1.00 (current: RM 0.45). Risk is relatively contained and the upside far exceeds the downside. While I have no opinion on the short-term trajectory of oil prices, I can safely recommend this stock as a long-term Buy based on fundamental research.
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