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From: "Gray Zhu, 800-289-2498, 212-279-6700" <grayzhu@panix.com>
To: Multiple recipients of list <icnet-l@ifcss.org>
Subject: IC940901: What are futures?
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==================    IC940901: Investment Club  ======================

1. What are futures? ................................... Gray Zhu
2. Another book introduced ............................. SHIWEI XU
_______________________________________________________________________
   (be sure to read the Disclaimer in the end if you have not read)

1. What are futures?

Let start with the fact that China had flood disaster this year, so
China is very likely to import wheat for early next year's needs. Now
the government is not sure about where the price is going to be next
year, say January. On the other hand farmer in the US is not sure what
price they can get when their crops grow up. The Chinese government
can sign a contract with a farmer in the US to buy wheat at the
current price say $1 million for 1,000,000 kilograms, i.e. $1/kg.
Both side will feel secure about their futures. The Chinese side will
have to pay a down payment 1% (let's assume so) for $1000. This is a
futures contract for $1000.

If the price of wheat rise from $1/kg to $1.01/kg, the farmer has to
pay $10,000 to the Chinese side, compensating the difference between
the market price and the contract price, So that if there is any
problem with the farmer's crops, China can buy from the market, it
will actually pay the contract price.

Now, China side can also sell the $1,000 contract for $11,000 in the
futures trading market, without exercising the contract, i.e. without
waiting for the wheat to be delivered. (??? - not sure)

On the other hand, If the price changes to $0.99/kg, China has to pay
the farmer $10,000 to the farmer. Because if China changes mind, the
farmer can still sell the wheat in the market, getting the total of 1
million dollars including the $10,000 + 1,000,000kg x $0.99/kg.

Again the farmer can sell the contract in the market for
$10000-$1000=$9000, because the $1000 down payment is taken by the
farmer already. (??? - not sure)

Traders rarely exercise contracts. They buy and sell many contracts
without the need of seeing the real thing. If we don't the real thing,
why don't we trade some numbers as well - this is exactly what index,
foreign currency futures all about.

As a matter of fact, China doesnt need to sign a contract with any
body, just need to buy contracts from the futures exchange. When I
LONG a contract (L1), I am buying a contract from the market, When I
SHORT a contract (S1), I am selling a contract. S1 after L1 is
actually selling a contract I have, net position is zero. L1 after S1
is covering a short position, net position is also zero. Either long
or short is called a position.

Although you can pay $1000 down payment for a contract, but you may
lose much more if the market goes down (up to $1 million in the
example case). But because the market is so huge and liquid, the price
does not change that much as you may think in a finite time period.

-Gray Zhu.

------------------------------------------
2. Another book introduced.

From: Shiwei Xu <sxu@UMDNJ.EDU>

My favorite book on investment is Benjamin Graham's "The Intelligent 
Investor".  It outlines the basic principles of the so called Value-
investing style that Graham popularized.  If it does't teach you a way
to beat the market, it will definitely tell you how not to lose money
through the ups and downs of your investment experience.  Another book
by Graham and Dodd is the classic "Security Analysis".  You learned a 
lot if you are up to it.  But if not, you have all the basics in the 
more straight forward "The Intelligent Investor".

-- 
SHIWEI XU
sxu@umdnj.edu

==========================================================================
                           Disclaimers:

 a) Material on ICnet  is for general information only, and made available
    to  voluntary  subscribers  (subscription  is  free).    There  is  no
    guarantee of  accuracy in either text or numbers, so please read  with
    your own discretion.  Opinion expressed by any author is  his own, not
    necessarily  his  employer's.  Nobody on  the icnet-l or related (Hong
    Guang, Gray Zhu or their employers, or any other members, or ifcss.org
    which is the  ftp provider) except yourself assumes any responsibility
    for any consequences of using the material.

 b) You are free to forward and copy the material  for private use. If you
    do forward, it is mandatory to let it ALWAYS GO  WITH DISCLAIMER.  Use 
    of the material for commercial  purpose without written consent of the 
    author is prohibited.

 c) Any past performance examples should  not be considered a guarantee of
    future   results.    Any  company mentioned   does    not constitute a
    recommendation by anybody.

==========================================================================
For specific recommendations and info on IC-VIP, contact grayzhu@panix.com 
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
                  ICnet - Investment Club on network
__________________________________________________________________________
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__________________________________________________________________________
     ALL INVESTMENTS INVOLVE RISK, STUDY CAREFULLY BEFORE INVESTING.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

From icnet-l@ifcss.org Mon Sep 12 19:03:36 1994
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From: "Gray Zhu 718-601-3746, (718)-358-2468" <grayzhu@panix.com>
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Subject: IC940912: The Art of Market
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==================    IC940912: Investment Club  ======================

          A New Era For Investing - The Art Of Market Physics

                      by Ning Zhu and Gray Zhu


                    -------- "Abstract" --------

  You are going to be introduced something you have never heard before.
  And, your life could be changed if you take full advantage of it.  A
  trading model of the stock and commodity market has been developed
  based on physics. Performance of the model were 76% and 95% return in
  1992 and 1993 respectively. With $1 million capital, the potential
  gain could reach over 100% annually with risk less than 10%, what it
  means is a $50,000  investment could bring you wealth of $1,600,000
  in 5 years.  Based on the model, a limited partnership "Newton Fund"
  is proposed, with the objective "It's my turn to get rich".


======================= Table of Contents ========================

1. A new era for investing in the market.
2. How money can be made
3. Take full advantage of the model - "It's my turn to get rich."
4. We do not like Lotto - make conservative money
5. The laws of physics are the laws of the market - don't read.
==================================================================

1. A new era for investing in the market.
-----------------------------------------

In recent years, many physics principles have been applied to the
market to forecast the movements, especially in the derivative
trading. These statistical models based on physics and mathematics are
mostly complicated, and not decisive.  

But, things will probably change! A new trading model of the stock and
commodity market has been developed (primarily by Ning Zhu) based on
simple physics principles.  Simple language and terminology will be
used to explain to you what we can do to "get rich".  Performance of
the model were 76% and 95% return in 1992 and 1993 respectively.

We believe the model and strategy could turn $50,000 investment into
$1,600,000 in 5 years. You could become one of the top 2% wealthy man
in the United States, not only intelligence wise, but money wise,
depending on whether you have the courage or not.


2. How money can be made
------------------------

Do you want to know how easily money can be made? It is simple

Most of the weekdays, you go to work from home, and go home after
work. Right?

One day, you come out of the door and find it is raining, you may go
back home to pick up an umbrella; Another day, you find letters in the
mailbox, and have to go back home check it. It happens sometime.

Now, if you are half way to the office, what is the chance of your
coming back home to pick up an umbrella? 

Very little! 90% chance you are going to the office all the way.

Wake up please! Same analogy, same thing happens in the market!

What's amazing is that the model we developed has the ability to
identify the chance of "your coming back home" to pick up an umbrella
after half way to the office is about 12%.  i.e. the chance of your
going all the way 88%.

How? You don't want know the garbage like Fourier Transformation,
Partial Wave, Partial Differential Equation, Lagrangian Interpolation
and Extrapolation, Path Integral.

"Let me assume you are right, so what?"

How about following the market when you see it is at half way? Let's
say "go to office" is moving up in the market, and "go back home" is
moving down in the market. When we see "half way to the office", we
take Long (L) position, and short (S) when we see "half way to home"
after work. 

How much do we make, then? The distantance you have passed is the
money we are going to make!

Where is the half way in the market? That is again junk terms like
Brown Motion and Free Path, Boltzman Distribution, SU(3) Symmetry
Group, Parity, Gamma Function, etc. 

All you want to know is the model can detect where is the "half
way". Performance of the model were 76% and 95% return in 1992 and
1993 respectively, and paper trade results have been showing to you in
the past two weeks.

A Chart and a table are available upon request. In the chart,
"half-way" found to be is 1.0 at the time, with this number in hands,
you can measure when you should trade! and how much money you can
make!

Amazing! Do you want to know more? call the numbers at the end of this
article.


3. Take full advantage of the model - "it's my turn to get rich."
-----------------------------------------------------------------

Have you ever heard of George Sorros? a Hungarian guy who made all his
friends milliaires in a few years. Simply because Sorros had the right
strategy in the futures trading. 

Do you want to be one of the "next George Sorros' friends"?

Have you ever heard of Warren Buffet? In Omaha, NE, a whole street of
residents have become millinares. How? apparently not by selling
buffet for dinner.  Buffet brought his neighbours into his fund and
made them money. 

Do you want to be the "next Buffet neighbour"?

The chance is in front of you:

With two "rocket scientists" (Ph.D's in physics), One vehicle - Newton
Fund equiped with the right model and strategy. YOU CAN TAKE THE RIDE
AS FAR AS YOU WANT!

More information can be found in "Preliminary Agreement" which is
enclosed or sent to you. Or contact the phone numbers and address at
the end of this article.


4. We don't like Lotto - making conservative money
--------------------------------------------------

You don't like to buy Lotto, we don't either!

Let's do it conservatively!

We have a swimming pool with 5 lanes, and 100 atheletes. We send 5
athelete into the pool to swim, money is earned according to distance.
and 95 of them are staying intact. 

When we find one in trouble (any kind of light injury), two out of the
95 is sent to support the one who is in trouble, and swim with the
original one, when the problem is solved, the two come back (take
profit), and the original one continues to swim (make money).

In case of the two is again in trouble along with the original one, we
send 3 more out of the remaining 93 to support the three, and 6 people
will swim (make money) that lane. If the support is successful, we
pull out the 5 (take profit) but one continues to swim (make money);
if not, WE PUMP THE WATER (exit the market) and see what's going on at
the bottom of the water (a ghost?  World War III ?).

Remember the success rate of a support is 88%.

Could we be more CONSERVATIVE?

For detailed discussion, please read the "Preliminary Agreement".  Or
call the number at the end of the article.
 
5. The laws of physics are the laws of the market.
--------------------------------------------------

o Newton's Laws

	a) Market movement has inertia, and can be described by
	   moving averages. Market shows trend as inertia, and the 
           trend tends to continue if no significant "force".

	b) News events are the force cause acceleration of price.

	c) Action/Reaction are the Bull/Bear, Demand/Supply,
           Long/Short, Support/Resistance in the market. Any given moment,
	   they are balanced.

o Brown motion: Average Free Path of molecular motion of the market can
           be determine using statistical tools.

o Symmetry: Up, Down, Strange, Charm, Bottom, and Top are found or to 
            be found in particle physics, they are also found in the
            market. 

            Parity: Bull/Bear
                    Demand/Supply, 
                    Support/Resistance
                    Long/Short

-------------------------- 
For further information, contact:

Gray Zhu (718)-601-3746
Ning Zhu (718)-358-2468

or 

grayzhu@panix.com

From icnet-l@ifcss.org Tue Sep 20 17:52:39 1994
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Subject: IC940920: Market Tumbled Today
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==================    IC940920: Investment Club  ======================

1. Market tumbled ........................................... Gray Zhu
2. A Letter from CCTV@******.wustl.edu ...................... CCTV
_______________________________________________________________________
   (be sure to read the Disclaimer in the end if you have not read)


-------------------------------
1. Market Drop 

The market tumbled due to the reasons that the US trade deficit
(import demand) and fear of inflation. Dow Jones Industrial Index down
67 points, S&P 500 down 7.5 points, and Nasdaq composite index down
about 10 points. Financial Services stocks lead the way, i.e.,
brokerage firms, regional banks, etc.

Also, heard that three top Micron Technology (MU, NYSE) officers
including president and vice presidents will leave the company next
month, reason unknown. It may concern our MU fans.


-------------------------------
2. A Letter from CCTV@******.wustl.edu .............. CCTV

>From: CCTV@******.wustl.edu

Hello Gray and Ning:

This weekend I closely read through your Newton Fund postings and
learned much more.  (You may not remember who ******** **** is: I
indicated xxK last week and mentioned I graduated from Peking U.,
Phys.  Dept too, and had a conversation with Ning and increased my
share to xxK.)  Last week when I indicated my share and when Ning
called me, I had only browsed through less than a quarter of them,
therefore the questions I asked Ning were unnecessary, since most of
them were already answered in your postings.  My apology.

While reading your postings, I become more and more excited,
encouraged, and interested.  I have a similar background as yours.
For years, I have been wondering those questions that your postings
had just answered.  I have been interested in finance/trading,
although I don't have an MBA.  I have been thinking how much more
potential the market has?  It seems to me that existing math methods
and artificial intelligence have not be fully used in this area; it
seems that there is a pretty large potential.  I thought, based on my
ability and background of math, data processing, computer literacy
etc., if I work in this area, I will probably outperform at least
average level.  On the other hand, I know that big companies are using
supercomputers doing their market analysis.  Is the potential really
big?  With my very limited resource, is it really worth to invest my
time on this uncertain field?  Now, your practice told me that, yes,
there is big potential, and at least it IS possible for people like me
to be successful, although it may not be easy.  Congratulations to
your success!  I am more convinced that market is a good place we
Chinese can develop and believe there will be more and more successful
stories.

I am sure you have a greater prospect in your mind than just Newton
Fund.  There will be a time when you want to expand your business.
When this time comes I hope that I will have a chance to contribute.
I am willing to sell my house and quit my current job and come.  My
interest in the Fund has been beyond making money from my share.  I hope
some day, in some form I can involve more in your development.  Before
that time, I wish that I can have a chance to visit your place (if
it's o.k.) and to know you better.

Best wishes,

-CCTV

(answered questions omitted - Gray)

==========================================================================
                           Disclaimers:

 a) Material on ICnet  is for general information only, and made available
    to  voluntary  subscribers  (subscription  is  free).    There  is  no
    guarantee of  accuracy in either text or numbers, so please read  with
    your own discretion.  Opinion expressed by any author is  his own, not
    necessarily  his  employer's.  Nobody on  the icnet-l or related (Hong
    Guang, Gray Zhu or their employers, or any other members, or ifcss.org
    which is the  ftp provider) except yourself assumes any responsibility
    for any consequences of using the material.

 b) You are free to forward and copy the material  for private use. If you
    do forward, it is mandatory to let it ALWAYS GO  WITH DISCLAIMER.  Use 
    of the material for commercial  purpose without written consent of the 
    author is prohibited.

 c) Any past performance examples should  not be considered a guarantee of
    future   results.    Any  company mentioned   does    not constitute a
    recommendation by anybody.

==========================================================================
For specific recommendations and info on IC-VIP, contact grayzhu@panix.com 
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
                  ICnet - Investment Club on network
__________________________________________________________________________
  SUB/SIGNOFF to: LISTSERV@IFCSS.ORG, with mailbody as:
                  SUB ICNET-L Firstname Lastname or: SIGNOFF ICNET-L
  Post mail to:   ICNET-L@IFCSS.ORG
  Anonymous ftp:  at ifcss.org, in direcctory: /org/icnet
  Gopher:         /org/icnet on ifcss.org, /ifcss/org/icnet on cnd.org
  Managers:       Guang Hong, HONG@opus.mco.edu
                  Gray Zhu, grayzhu@panix.com
__________________________________________________________________________
     ALL INVESTMENTS INVOLVE RISK, STUDY CAREFULLY BEFORE INVESTING.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

