Everyone Should Wear Masks

Everyone should wear masks.  The main reason that people don’t is vanity.

According to CDC, face masks work in protecting yourself from virus infection. Note that a face mask is not necessarily the same as respirators.  An N95 mask is a respirator.

A mask does these things:

  1. It reduces the chance that you get infected, even though it is not perfect
  2. It reduces inoculum (viral load), which reduces how sick you get, even if you get infected.  Watch:  https://youtu.be/efaDuE-XEi4?t=1193    Summary:  At time of infection, if you get hit with 100 virus particles, versus 100,000 virus particles, you will be less sick.
  3. It reduces the number of people that you will infect, because you don’t know for the first few days that you are contagious, after getting infected.  The mask reduces the inoculum that you spray into the air.

All of the above benefits help “flatten the curve”.

It can be a construction, painter’s or homemade mask.  It doesn’t have to be surgical mask.  Any mask, even a scarf, is better than nothing. It may sound funny, but a Halloween mask is better than nothing.

It is no coincidence that everyone in the Asian countries, which have tiny numbers of infected, wear masks.  Taiwan, Hong Kong, South Korea and Singapore knew that it was important that everyone in public wear masks.  You cannot “flatten the curve” if the public has a high R (infectious rate) or get very sick (from getting hit with high inoculum levels), both of which masks reduce.  Hence, their governments made masks available and told everyone to wear them.

Note the woman shopper in the photo of this article about Taiwan.  

Notice that her mask is not a medical ask.  Any mask helps, as it limits the inoulum that she is spraying into the air, if she is infected.

In Taiwan, people are still going to work and school.  They can go to restaurants.  They aren’t worried about “flattening the curve”.  Meanwhile, we are freaked out, trapped in our homes and our economy is cratering.

As Chris Martenson said: “Why is face mask use – proven effective at stopping disease – not being promoted for general use? Because the government failed to stockpile and had no plan for how to ramp up production, and chose to shame the public into not buying masks instead of being honest.”

How South Korea “flattened the curve”

Take a look at these Korean apps helping people avoid areas infected by the coronavirus.

There are probably dozens of Canadians who can develop these apps as well, but only if the government provides the data.

“The app collects data from public government info including the Korea Centers for Disease Control to show the date a patient was diagnosed with COVID-19, along with the person’s nationality, age, gender, and where they visited.

If a person using the app comes within 100 meters, or about 328 feet, of a place where a person carrying the virus has been, they get a push notification warning”

I don’t think there is a privacy issue because names of the infected are not provided.

“These precautions in South Korea are in addition to measures by government and health officials, including efficient “drive-thru” testing that takes less than 10 minutes.”

This is partly how South Korea stopped the virus from continuing to grow exponentially.  South Korea has done other things as well, such as restricting travel, aggressive testing, aggressive contact tracing and wearing masks, that many Western countries and other countries have not done and still are not doing. Hence, South Korea has significantly lower “Tot Cases/1M pop”.

In other words, South Korea has “flattened the curve”.  Italy and Spain have not.  Several other countries will not.

Worse Than 2009

The stock market correction started on February 24th. We were busy preparing for and then flew to Hawaii for our vacation. It was surreal to watch this doom-filled volatility from the beautiful, sun-lit hotel pool in Hawaii with tall palm trees all around.

A couple of days later, the stocks bounced. Nevertheless, I told my wife that this is going to be worse than 2008, but it will not go in a straight line. There will be many “head fakes”, “sucker rallies” and “dead cat bounces”.

Fast forward to today and we have a full blown crisis, where both the U.S. and Canada had announced aid packages:

  • White House pushed for $1 trillion package.
  • Canada announced $82B aid package.

These will not be enough.  It’s likely that these governments will increase this or announce another package.

This recession is going to be worse than the 2009 recession.  Here is what caused the 2009 recession:

  • U.S. government enacted CREA (Community Reinvestment Act), which pushed banks to lend to low-income borrowers, in order to increase home ownership.
  • Fannie Mae and Freddie Mac bought mortgages from banks, in order to get banks to lend out more mortgages.  They ended up with half of the country’s mortgages.
  • Wall Street jumped on board and sold mortgages to earn commissions.  They sold to high risk, low-income borrowers because Wall Street was not the lender and therefore didn’t take the risk.
  • This fuelled the housing bubble.
  • Bubble burst
  • Homeowners stopped paying banks.
  • Banks were on verge of bankruptcy and stopped lending.
  • Tightening credit caused recession.

What most people do not realize is that it was the government that created the housing bubble and ultimately the crash and recession.  The bail outs of Fannie Mae and Freddie Mac were much bigger than for AIG or the banks.

Consequently, the stock market dropped by as much as 10% in day, on multiple days.

During this deep recession in 2009, credit was tight, but people were still able to consume or produce.  In May, 2009, Hawaii was dirt cheap, so my wife and I took a 10 day vacation for $2,200, which included hotel and flights.

This recession is much more different.  Even if Hawaii vacations are selling for $100, you cannot buy one.  People are told to stay home, self-isolate or stay in quarantine.  Borders are closing.  You cannot fly to Hawaii from Canada even if you offered $1 million to the airlines.

In 2009, you still saw people in restaurants, bars, movie theatres, etc.  Today, you see no one.

In 2009, people still bought TVs, computers, electronics, etc.  Today, Apple’s stores are closed.

The stock market has already dropped by 10% in a day, on multiple days.

In 2009, once credit loosened, the economy could recover. Today, the virus is still growing exponentially. To slow this down, the government is clamping down the people, which is clamping down the economy. If the government lets people go back to normal activities, the virus will flare up again, which will prompt the government to clamp people down again. This can happen repeatedly until the vaccine comes out in 12-18 months. Until the vaccine comes out, the economy might be kept in a coma.

In addition to the devastating impact on health and lives, this virus will wipe out trillions of dollars of wealth around the world.  Bankruptcies will soar. Millions of jobs will be lost.  The number of people on welfare will go up.

The crisis will eventually subside. Things will eventually go back to normal, once the vaccine comes out.  Social distancing is going to be very boring.  During this process, you will become poorer.  To prepare, make sure that you have a budget and have enough of a buffer to pay for several months of expenses.

Note that the aid packages will come from you.  You will pay for them.  The government cannot create wealth.  It can only take it from you to give to somebody else.   Therefore, the country’s wealth will be the same as without the aid packages, and the country will still be poorer than before the virus.

Governments will likely bail out companies. Despite being an investor and shareholder, I object to this, and so should you. Many of these companies, such as the airlines and Boeing, were making billions of dollars of profits for many years. Instead of stashing this money into their bank accounts, they used it to buy back shares. This juiced the stocks, which benefited shareholders, but more importantly, it increased the executives’ stock options and bonuses. Now that their companies are losing money, their companies should sell shares to raise money. That’s the main purpose of the stock market: enable companies to sell shares to raise money.

If governments bail them out, they will be “Privatizing Profits and Socializing Losses”.

Some people might blame capitalism for these bail outs. This is socialism, not capitalism. Capitalism advocates that incompetent businesses should die and disappear. Socialism advocates that governments help businesses. “Socializing Losses” is socialism.

Similarly, the problem with Wall Street in 2009 was socialism, not capitalism. Bailing out Wall Street firms is socialism. Furthermore, it was the government that created the housing bubble. (Similarly, Canada’s government created its housing bubble, but that is another long discussion.)

Some people might argue that compensating executives with stocks is the source of the problem. I disagree. If the government does not intervene with bail outs, these executives will learn the hard way for their mistake of stock buy backs and for not stashing enough money in the bank. Now that their stock price is low, these executives will not make bonuses. When they get their company to sell stock, they will continue to forgo bonuses, but they will prevent their company from going bankrupt.

This is the punishment and lesson that executives should endure and learn, but will not if the government bails them out.

You, as a taxpayer, should not pay for their mistake of not stashing their profits into their bank accounts.

Even if you bail out these companies, it does not prevent them from declaring bankruptcy. Governments forced taxpayers to give billions of dollars to GM in 2008. It still declared bankruptcy anyways.

Countries Need to Stop Listening to WHO

The WHO did not and will not tell countries to ban travel. In fact, they told countries to not ban travel when they found out about the problem in China. WHO’s director general, Dr. Tedros, is incredibly incompetent or corrupt.

Luckily, Taiwan, Singapore and Hong Kong did not listen and banned travel immediately as soon as they found out about the virus. They did several other things as well, that we are still not doing. Taiwan and Hong Kong should have the most cases outside of China, yet Taiwan has fewer than Slovenia.

China locked down Wuhan when it had 300 official cases. Canada has 247 cases, is growing exponentially and yet, Canada is still taking thousands of flights from many hot spot countries.

Spain had 228 cases on March 4. Ten days later, stores are closed (except groceries and pharmacies).

If Canada continues growing exponentially, stores can be closed in 10 days.

France had 212 cases on March 3. Eleven days later, stores are closed.

Italy had 229 cases on Feb 24. Two weeks later, the country is locked down. 19 days later, 175 people die in one day.

Politicians should stop listening to WHO and read:

Coronavirus: Why You Must Act Now

Coronavirus Will Go Exponential in More Countries

Countries are having different results with the virus. The growth is linear in some and exponential in others. See the following graph:

To prevent exponential growth, countries must do what South Korea, Hong Kong, Singapore and Taiwan are doing:

  • Containment (Hong Kong closed its border with China.  Travel from all hot spots, such as China, South Korea, Japan, Iran and Italy should have been banned since January.  We are still taking thousands of flights from them.)
  • Banning social gatherings.
  • Masks.  Most people in Hong Kong wear masks when they go out.  This not only reduces the chances of catching the virus, but more importantly, it reduces the number of people that you will infect if you have the virus.  During the incubation period before you develop symptoms, you can be infecting others and not know it.
  • Aggressive testing.
  • Contact Tracing  (In addition, South Korea has an app that tells you the locations that all infected people have visited.)
  • Quarantine  (China is the most aggressive with this, by limiting the times that people can leave their homes.)
  • Removal of deterrent of quarantine, such as paying for lost wages, so that people will not break quarantine.

For countries that have not done the above, such as Italy and Iran, the number of cases have grown exponentially.

Many other countries, including the U.S., Canada and many European countries, are not doing the above. The virus will grow exponentially in these countries.

The WHO and CDC have really dropped the ball.  WHO downplayed it for far too long and tried to be politically correct instead of being honest. The WHO and CDC have documentation from prior years that explain what should be done. This first thing that should be done is: CONTAINMENT.

“If the Containment Zone encompasses major air, land, and sea transit points, it is possible that screening procedures could be used but the preferable alternative is to close that entry point.”

From WHO Interim Protocol: Rapid operations to contain the initial emergence of pandemic influenza

In January, WHO should have told every country to practise containment, which includes banning travel from China.  Instead of doing this, WHO downplayed the situation and praised China’s efforts.  In February, WHO issued a statement saying that they are not calling it a pandemic but some dishonest, politically correct phrase.

We have no containment.

This virus is many times worse than SARS or the flu.  According to WHO’s website, a pandemic is when a virus spreads around the world.  Yet, WHO would not call this a pandemic until today, after the virus has spread to 109 countries:

World Health Organization declares the coronavirus outbreak a global pandemic

CDC should have enabled testing of thousands of Americans since weeks ago.  There are likely many thousands of Americans (and Canadians) who are infected but we don’t know yet.  China and Iran likely have many multiples more infected than they are reporting. Watch the interview of this doctor’s frustration in the CDC and his inability to test:

The other challenge is that governments are caught between a rock and a hard place:  saves lives or save their economies.  To save lives, they will need to clamp down their people, but this will clamp down their economies.  The right thing to do is to save lives, but when they do this, their economies will crater.  Many people will lose their lives or many people will lose their jobs and income. It is not a easy choice.

“Up to 150 million Americans are expected to contract the coronavirus, congressional doctor says”

Please practise social distancing.  Work at home if you can.  Do not shake hands.  Avoid social gatherings. There are going to be many long, boring months until they come up with a vaccine.

Went to Cash Because of COVID-19 (Coronavirus)

I’ve been following the reports on this virus for the past 3 weeks. Since early February, I felt that this would cause a correction but was surprised that the market was ignoring it.

Then I got busy getting ready for my vacation to Hawaii and flying there when the correction started.

Yesterday, I got some time here in Hawaii to research this more. Today I sold my stocks.

It looks like the WHO (World Health Organization) and several countries have been lying about the severity of this virus. China, Thailand, Vietnam, Iran and the U.S. likely have multiple times more cases than they are reporting.

The U.S. has only reported 50-60 cases, all of which came from travellers from the Diamond Princess cruise ship or China. Yet, California has thousands in quarantine. Today, the first case is reported where the source of the infection is unknown. This implies that it is spreading within the U.S. and many more will be reported in the future.

Iran and Thailand likely have tens of thousands of cases.

This virus is much more infectious, easily spread and deadly than either SARS or the flu. People are succumbing and falling on the ground in some countries. Victims can get sick more than once. Contagious period can be up to 27 days without symptoms. Another difference is the size of the Chinese economy compared to when SARS broke out. This means that the impact to the world economy will be much more significant.

China has been shutting down almost entire cities. This will disrupt supply chains that the world depends on, which in turn will slow the world’s economy.

CDC has said that a pandemic is essentially assured. Germany said that they will have an epidemic. Europe is not doing enough to contain it. The U.S. is not doing enough testing. Italy is using the military to quarantine victims. There are long lineups at the grocery stores in South Korea and the shelves are empty in stores near the cluster in Italy. The number of cases worldwide are doubling every 4-5 days. Vaccine is one to one and a half years away. It looks like it is going to get worse before it gets better.

There is a possibility that this might be the start of the next bear market or recession. Hopefully, I’m wrong.

Warren Buffett goes Solar

The world is on the tipping point of switching to 100% solar.

This will be another huge disruption, on a similar scale to electric cars replacing gas cars. Warren Buffett is not going to miss this party.

“Warren Buffett Has Started The Biggest Energy Revolution”

Solar is now CHEAPER than fossil fuel energy.

“In most parts of the world today, solar is the cheapest source of new power generation. So why hasn’t the world switched the plug to solar just yet?”

The only thing holding back the world from going 100% solar is the battery.  “MIT researchers estimated battery costs must sink to $20 per megawatt hour if we ever want to switch 100% to solar power.”

Buffett is investing in a solar farm that will store electricity in batteries for $13 per megawatt hour (MWh). That’s $7 less than MIT’s threshold. Combined with generation, the solar farm’s electricity will cost $33 per MWh. That’s $37 less than the $70 for natural gas.

Massive change is coming.

People all over the world are going to switch to solar, not just to make the world greener, but to make their wallets greener.

“The best news for investors, we are still in the early innings of this energy revolution. While the Invesco Solar ETF rallied 51% last year, it’s still down 88% from its highs…In the grand scheme of things, it has barely budged. With so much room for growth, solar stocks could easily double, triple, quadruple, or better in the coming years.”

There are many ways to invest in solar. There are many panel manufacturers, installation companies, financiers of solar installations, solar farm companies such as Warren Buffett’s, etc. But there are mainly just two inverter manufacturers: Enphase (which I own) and SolarEdge. This is similar to smartphones where there are mainly just two smartphone makers, Apple and Samsung. Another way to play solar is with Tesla, which is making batteries for utility companies and solar roofs.

7 Extraordinary Trades

I have made bad, mediocre and good trades. Here are the extraordinarily bad and good trades.


I bought this in 2009. This went to ZERO. Bankrupt.


I bought this in 2009. This went to ZERO. Bankrupt.


I bought this in 2011 and was defrauded. NIVS turned out to be one of many fraudulent Chinese reverse-takeovers that listed on the NYSE. This got delisted and went to ZERO.


I bought a few in approximately April 2013 for approximately $40 each. Then it went to $10,000 each in 2017 and crashed in 2018. However, it has recovered some since 2018 and I believe it will fully recover or reach new highs.


I bought this in 2015 for approximately $12 per share. It dropped by approximately 50%, so I put three times more money into the stock (by selling my other stocks) at approximately $6 per share. But it continued to drop until it went down approximately 95% to 72 cents or less in May 2017. Since then, it has shot up to $30 or more.

This has to be the wildest rollercoaster ride that I have ever been on. Who needs to go to Disney World when you can ride Enphase? The next time your kid wants you to take them to Disney World, buy them some Enphase stock.

Enphase is a good example of how the stock is much more extreme than the business metrics. Enphase’s revenue declined in 2016, but the long term future looked okay to good. Prices of solar components continued to decline. If this continues, it will be cheaper than the grid. Nevertheless, shareholders panicked and dumped the stock.

If you cannot handle this kind of volatility, buy ETFs because you will lose money with stocks.


I bought $880 worth for my kid in November 2017 for approximately $27 per share. I watched it climb to $70 per share in 2018. Then it started dropping. When it dropped to $44, I thought it was an opportunity to get in, so I bought some in November 2018. But it kept dropping. I waited and waited until it bottomed, which it did at $27, which was 32% lower than the $44 that I bought it at. After it bounced, I bought approximately three times more for myself for approximately $30 per share in December 2018. Since then, it has rocketed to as high as $160.

Since I bought so close to the bottom in December 2018, I wonder if the SEC is going to be suspicious of insider trading.


I started researching this company in early 2019 and determined that they make the best car in the world, but the world doesn’t know it yet.

However, bad news were coming out. Tesla had missed street expectations for one or two quarters. Sales dropped from 2018. They had to make a secondary offering to raise cash. Short sellers were bashing Tesla incessantly. Bears used the TSLAQ symbol to imply bankruptcy. They mocked Elon Musk’s “Funding secured at $420” tweet. They mocked Elon Musk’s unfilled claims. They posted news about Tesla cars on fire and Auto-pilot killing its driver. The stock kept declining. I waited and waited and waited until it would bottom. It bottomed at $180. Then it bounced and I bought it at approximately $206 per share in early June 2019.

Like Roku, I bought Tesla near the bottom. Tesla’s stock had been range bound for over 5 years. After the June 2019 bottom, it has rocketed up to $728 per share. The SEC must be convinced that I have insider information now. They are probably spying on me as I type this.

I can unequivocally tell you that I do not have insider information and I do not know Elon Musk personally. I do not even know the janitor at Tesla.

I am simply very bullish on the company. You can read my other posts for my reasons. However, I did not think that it will shoot up this quickly. It would seem that it is due for a correction, but I have no idea what it will do in the short run.

Compare U.S. to Canada

People might deny it, but for most, the most important issue is money. Consequently, the number one political issue at every election for most voters is money. They might disguise it as jobs, healthcare, education, daycare, etc. But those are all money-related. If people had lots of money, they would care less about those. If they had tens of millions of dollars, they would not need a job and not worry about healthcare and education, because they can pay for the best in the world.

Therefore, the most important mandate for the country’s leader is: Has he/she improved the prosperity of voters?

Compare Canadian to U.S. stock performance, since Justin Trudeau was elected as Prime Minister. The S&P/TSX Composite index has gone up 25.1% from Oct 25, 2015 to Jan 31, 2020. Meanwhile, the U.S. S&P 500 has gone up 58.8% over the same period. (S&P/TSX closed at 13,841.90 on Oct 25, 2015 and 17,318.49 on Jan 31, 2020. S&P 500 closed at 2,030.77 on Oct 25, 2015 and 3,225.52 on Jan 31, 2020.)

Below is a graphical representation of the difference, though I was not able to get Yahoo to show the lines to Jan 31, 2020.

Here is more data to show Trudeau’s underperformance.

Canadian annual GDP growth (%) for 2016: 1.10
Canadian quarterly GDP growth (%):
2017 Q1:  0.6
2017 Q2:  1.2
2017 Q3:  0.4
2017 Q4:  0.4
2018 Q1:  0.5
2018 Q2:  0.4
2018 Q3:  0.6
2018 Q4:  0.2
2019 Q1:  0.2
2019 Q2:  0.9
2019 Q3:  0.3

U.S. annual GDP growth (%) for 2016: 1.57
U.S. quarterly GDP growth (%):
2017 Q1:  2.3
2017 Q2:  2.2
2017 Q3:  3.2
2017 Q4:  3.5
2018 Q1:  2.5
2018 Q2:  3.5
2018 Q3:  2.9
2018 Q4:  1.1
2019 Q1:  3.1
2019 Q2:  2.0
2019 Q3:  2.1

If Trudeau did not bring in 3 times more immigrants than the U.S. (on a per capita basis), Canada’s GDP growth would be even lower, probably in recession.

This is partly why I’ve allocated 100% of my portfolio to U.S. equities for many years.

Note that immigration is how most politicians try to boost GDP. However, this is not important to voters. GDP for the country does little for them. They care more about GDP-per-person, or more specifically, income. After many years of mass immigration, the average income has been relatively flat. This is because most political leaders are incapable of increasing GDP-per-person. Increasing GDP is easy. Simply increase immigration.

Fear of Draw Downs

A common term used in the investment world is “draw down”. It simply refers to the amount that your stock portfolio went down in value, which was caused by a correction, dip, crash or bear market in the stock market.

Investors panic over this. They care more about this than gains. That is, their fear emotion about this is stronger than their greed emotion to make money.

Consequently, investment professionals, such as hedge fund managers and investment advisors are very acute to this and try to minimize it. In fact, they have “mandates” to do this, otherwise they lose clients or get sued by clients. Hence, they hedge and create balanced portfolios with fixed income.

However, this is the major factor that causes under-performance, as explained in my article Why Most funds Underperform. Many investors are willing to forego gains in order to avoid draw downs.

Warren Buffett wrote an article about students of Ben Graham and David Dodd, who became super-investors:

The Superinvestors of Graham and Doddsville

These students became full-time fund managers who outperformed the market, by approximately 8-16% per year on average. However, they under-performed in these years (corresponding to lists in their tables):

  • Walter Schloss:  1, 9, 16, 17, 19, 24
  • Tweedy:  8, 14
  • Sequoia:  1, 2, 3, 4, 9, 10  
  • Charlie Munger:  3, 8, 10, 11, 12
  • Pacific:  5, 7, 8, 9, 10, 15

So, even if you under-perform some years, you can become rich from the stock market. Buffett is the only fund manager who did not under-perform a single year.

They all became rich by outperforming the index over many years.  However, during some years, they had “draw downs” that caused their funds to go negative.

Despite these “draw downs”, Buffett considers them to be the best investors in the world. Were they afraid of draw downs? No. Buffett has said that he and Munger have seen their portfolios drop by 40%, multiple times.

If you look at Charlie Munger’s performance in Buffett’s article, you will see that Munger had draw downs of -31.9% in 1973 and -31.5% in 1974. After those two years, his fund dropped by 53%. Most investors would panic and their hair would burst into flames if they experience this kind of draw down.

Despite this, Buffett considered Munger to be such a superior investor that he asked Munger to be his partner at Berkshire Hathaway.

This is because Buffett and Munger focus on Business Metrics, and less so on stock prices.

If you freak out over draw downs, you will lose money or be a mediocre investor.

You will also see that Munger’s fund was extremely volatile. As explained in my article Why Most funds Underperform, a Wall Street firm would not consider me because my portfolio was volatile. But, the less volatile your portfolio is, the less likely you will outperform.

Get the Truth on Investing!