People, Culture & Investment: Master So, Feng Shui and Investment

Image from hk.asia-city.com

Master Peter So, is one of the most respected feng shui master in Hong Kong, or probably in Asia. He is also one of the few feng shui masters who actually has translated feng shui books in English, inside those books, are a great amount of highly formal vocabulary, really worth reading even if you are not interested in feng shui, just for the sake of widening your horizon.

Image from amazon.com

There are many reasons for his success, his long waist-length straight hair, his fashionable look, the sharpness and directness of his criticism, the fluent hyper-speed recitation of the Ba-zhi diagnoses, etc., but his quirk cannot sustain his fame if he is not truthful enough.

And his most truthful quote, is "the highest level of feng shui, is random guessing."

Sounds very demeaning to the great Chinese system, but his words are absolutely true.

Feng shui, as he often says, is statistics, is a collection of statistical knowledge (though impressionised rather than hard number facts) through thousands of years of observations in the human behaviour in relation to the geography of the surroundings in China. Hence feng shui can affect people's living conditions in certain good or bad ways in general, but there are always exceptions.

See what Dr. House has to say about the feng shui of his office (Season 8 Episode 5).

Surprised that westerners care about feng shui too? You'll be even more surprised after Googling English books on feng shui.

Back to my previous point, what Dr. House felt was really no joke. Feng shui is a lot about comfortability.

A Ceiling Beam
Image from idyllwild

For example, a sudden appearance of a ceiling beam tends to make people feel uncomfortable or even sick. Sounds unconvincing, but Master So's explanation is that the beam deflects air movements downwards, thus having your air-conditioner's wind hitting the beam and deflecting to hit directly above your head, will really make you uncomfortable or even sick.

Scared by one's own reflection in the mirror
Image from moviesblog.mtv

Another example is that mirrors should never face any doors or beds as it will cause discomfort, unrest or even poor health. His explanation is that human tends to be scared by sudden moving objects. Whether it is in the day or at night, when you open the door and suddenly you see some unexpected moving object in front of you, you will be frightened by it. That moving object is of course your own reflection in the mirror. Continually suffering from the scare of your own reflection in the middle of the night while you head to the toilet isn't a smart choice.

This, to me, actually makes sense.

Computer and monitor near the bed
Image from seemslegit

But what is even more amazing about Master So, is that he is often caught saying that he is a feng shui master who least believes in feng shui! He explained by saying that many of the teachings from the old feng shui textbooks will not apply in the modern days simply because many things in the modern days never existed in the past, like the electromagnetic influences from the computer and the monitor next to your bed, or the power transmission towers near your home, or the bright signboards in the opposite building which flashes right outside your windows affecting your sleep quality.

"Feng shui isn't foolproof".

Power Transmission Tower
Image from made-in-china

Can feng shui foretell the future? Probably not. Otherwise, Master Peter So will surely try to explain future trends with feng shui when he talks about investment. The fact is, even a feng shui master himself, he hardly discusses his investments in terms of feng shui. What he does share, are his observations through the years of observations of the market movement, supporting it with statistics (or arguably, his own style of feng shui).

"Anything regarding Gods and Demons, I have zero idea! 

Feng shui is statistics, not religious studies." -- Master Peter So. 

Here's an article which demonstrates his firm belief in statistics.

Feng shui masters hit the investment trail By Li Tao (China Daily) Updated: 2010-02-22 10:52 HONG KONG: While financial analysts read all sorts of indexes to form a picture of the economy, feng shui experts in Hong Kong are applying their art to a similar end. Peter So, a popular local feng shui master, is trying to convince undecided investors not to purchase property in Hong Kong until 2015. So said past experience showed the city's property prices rising continuously for five years and then falling over the next six. He said prices peaked in 2009, the final year of the last cycle, and were now due to tumble. "The theory has never been wrong in the past," said So. "Apartment prices fell in value almost 50 percent between 1986 and 1991 and then rebounded to another high in 1997. They slumped again in 2003 because of the breakout of SARS, and it is acknowledged that property prices have been way up over the past few years, even though the city's economy was damaged severely by the global financial crisis." So said the next bottoming of the property market would occur in 2015 and he had now started saving money ahead of the eventuality. As to stocks, So eschewed predicting whether it would be a lucrative market or not this year, but advised investors to differentiate odd years from even ones when buying, a tactic he said was effective eight times of 10. "Though the stock market is volatile, rough fluctuations still can be determined. Generally, the market rises high initially but ends low in odd years. The trend reverses in even years. This is an even year, so investors should consider buying stocks in May or June, when the market will be at the year's bottom," said So. However, just like the mercurial markets, predictions from different feng shui masters vary, sometimes considerably. Edwin Ma, another local feng shui master, disagrees with So about the city's property market. "If I am to make a suggestion to my clients, I will definitely advise them to pour money into the property market this year," Ma said. Ma anticipates a flat year in housing prices, but he said it was still worth investing since "in comparison with stocks, property prices are de facto guaranteed to make a fortune, while most stocks were not". He added: "The stock market seemed exuberant last year, but it has become the playground only for rich people because profitable stocks were no longer affordable to most ordinary investors." Ma said although the Hang Seng Index ended high in 2009, most investors were unhappy because star stocks such as HSBC had surged to more than HK$80 a share - far beyond their affordability. However, any cheap stocks they were holding barely made money, or even dwindled in value over the year. Ma also warned people born in the years of the tiger, monkey or snake to be extra cautious with money in 2010. Feng shui is an ancient Chinese aesthetics system believed to apply the laws of both heaven (astronomy) and earth (geography) to help people improve their lives. Cynics say it is based solely on anecdote or guesswork and lacks plausibility. However, feng shui is extremely popular in China and is growing in popularity in many foreign countries.

After reading the above article, I did some research myself. I found this article dated Dec 3rd, 2008, and it shows a chart and 2 tables.

Image from fundsupermart

From the above chart, and the table below obtained from Hang Seng Indexes,

Month-end weighted average P/E Ratio (Table 1)
Image from hsi.com.hk

if you are thinking about investing in stocks, when the current Price-to-Earning ratio (PE) is around 6.78 to 10, it is considered as a good bargain. But what about timing?

Image from fundsupermart

Looking at the table above, it is fair to say that roughly every 3 or 6 years (depending on how you want to see it) something disastrous will happen, the recent one is 2009, so either if history will repeat itself in a different way, then 2012 or 2015 would be the danger years, which matches what Master So said in the above article.

Image from fundsupermart

The duration it took to rebound seems to vary greatly from the above table, so if you read the above article on the 3rd Dec 2008, and decided to buy in stocks after the month-end weighted average PE was published in Jan 2009, this is what should have happened...

Month-end weighted average P/E Ratio (Table 2)
Image from hsi.com.hk

Which means that your investment should have lost roughly 10% till Feb 2009, but then you should have earned double by Jul 2009. Back to the feng shui issue, if feng shui is statistics, then feng shui is just the Chinese name for "Data Analysis". Master So's data analysis concludes that this year's May and June is the bottom of the market, but according to my own analysis using the data from Hang Seng Indexes...

Since 1973 till today,

Image from Locky's English Playground

• January and March each have 7 times being the lowest PE month, while other months are quite even, this could mean January and March are likely to be the best time to buy stocks in Hong Kong. 
• At the same time, December has 12 times being the highest PE month, followed by February with 8 times, then January and July with 5 times, meaning that these months are likely to be the months at which the stocks in Hong Kong are the most expensive.

But the questions are, 

1. How do I know which January is the highest PE or the lowest PE month? 
2. Should I buy in January and then sell in February?

These are questions which need more analysis to be done, after I have found out, it will be my feng shui.

More on that later.

Please "Like" this entry and the English Playground if you want more of this kind. 

Vocabulary:
recitation -- (n) [C] saying a piece of writing aloud from memory
quirk -- (n) [C] an unusual part of someone's personality or habit, or something that is strange and unexpected
fame -- (n) [U] when you are known or recognized by many people because of your achievements, skills, etc
demeaning -- (adj) causing someone to become or feel less respected
comfortability -- (n) [U] how comfortable one's is about something or someone
ceiling beam -- (n)[C] A beam is a horizontal structural element that is capable of withstanding load primarily by resisting bending.
power transmission tower -- (n) [C] a tall structure, usually a steel lattice tower, used to support an overhead power line.
foretell -- (vb)  [T] (foretold, foretold) literary to state what is going to happen in the future
tumble -- (vb)[I] to fall a lot in value in a short time
slump -- (vb) [I] (of prices, values or sales) to fall suddenly
breakout -- (n) [C] a violent escape, especially by a group, from prison
bottom out-- (phrasal verb)  to have reached the lowest point in a continuously changing situation and to be about to improve
eschew -- (vb)  [T] formal to avoid something intentionally, or to give something up
lucrative -- (adj) (especially of a business, job or activity) producing a lot of money
differentiate -- (vb) [I or T] to show or find the difference between things which are compared
mercurial -- (adj) changing suddenly and often
aesthetics -- (US also esthetics) (n)[U] the formal study of art, especially in relation to the idea of beauty
cynic -- (n) [C] disapproving a person who believes that people are only interested in themselves and are not sincere
plausibility -- (n)[U] seeming likely to be true, or able to be believed



Resources:
Feng shui masters hit the investment trail @China Daily
http://www.chinadaily.com.cn/bizchina/2010-02/22/content_9483738.htm

Transmission Tower @ Wikipedia
http://en.wikipedia.org/wiki/Transmission_tower

Feng Shui @ Wikipedia
http://en.wikipedia.org/wiki/Feng_shui

House MD - "Feng Shui" @ YouTube
http://www.youtube.com/watch?v=cyKp9QgapIg

Hong Kong Market At Huge Discount! @ fundsupermart.com
http://www.fundsupermart.com.hk/hk/main/research/viewHTML.tpl?lang=en&articleNo=3104

Peter So Man-fung @ HK Asia City
http://hk.asia-city.com/events/article/peter-so-man-fung-renowned-fortune-teller

Master SoTurning the wheel of fortune @ CUHK
http://www.com.cuhk.edu.hk/varsity/0012/people/masterso.htm

@ Master So Classroom
http://masterso.com/classroom/classroom4_02.php

http://v.youku.com/v_show/id_XMTE2MDgzMzI=.html

Hang Seng Indexes
http://www.hsi.com.hk/HSI-Net/HSI-Net

http://dictionary.cambridge.org/dictionary/british/recitation?q=recitation+
http://dictionary.cambridge.org/dictionary/british/quirk?q=quirk
http://dictionary.cambridge.org/dictionary/british/fame?q=fame+
http://dictionary.cambridge.org/dictionary/british/demeaning?q=demeaning+
http://en.wikipedia.org/wiki/Beam_(structure)
http://en.wikipedia.org/wiki/Power_transmission_tower
http://dictionary.cambridge.org/dictionary/british/foretell?q=foretell+
http://dictionary.cambridge.org/dictionary/british/tumble_1?q=tumble
http://dictionary.cambridge.org/dictionary/british/slump_1?q=slump+
http://dictionary.cambridge.org/dictionary/british/breakout?q=breakout
http://dictionary.cambridge.org/dictionary/british/bottom-out?q=bottoming#bottom-out__2
http://dictionary.cambridge.org/dictionary/british/eschew?q=eschew+
http://dictionary.cambridge.org/dictionary/british/lucrative?q=lucrative+
http://dictionary.cambridge.org/dictionary/british/differentiate_1?q=differentiate+
http://dictionary.cambridge.org/dictionary/british/aesthetics?q=aesthetics+
http://dictionary.cambridge.org/dictionary/british/cynic?q=cynics+#cynic__3
http://dictionary.cambridge.org/dictionary/british/plausible?q=plausibility+