Ramthoughts Ltd®

In previous two articles, Part (I) and Part (II) of the Bitcoin Block Hashing Algorithm [(Read more here)

One distinctive characteristic of banks is their asset composition ￂﾠ Generally, non-financial companies￢ﾀﾙ assets are predominantly tangible assets, such as plants, properties and equipment.ￂﾠ While bank assets are predominantly financial assets such as loans and securities and their liabilities are primarily deposits. Banks are also heavily regulated by authorities as such, capital, minimum liquidity, and the riskiness of assets must meet authorities￢ﾀﾙ requirements. Hence, certain conventional financial ratios such as Gross Profit Margin, Inventory Turnover, Current Ratio and D/E etc are not relevant. The most common rating approach for banks is ￢ﾀﾜCAMELS￢ﾀﾝ, an acronym of six components as follows: Capital adequacy Capital adequacy for banks is described in terms of the proportion of the bank￢ﾀﾙs assets funded with capital. For purposes of determining capital adequacy, a bank￢ﾀﾙs assets are adjusted based on their risk, with riskier ass...

One distinctive characteristic of banks is their asset composition ￂﾠ Generally, non-financial companies￢ﾀﾙ assets are predominantly tangible assets, such as plants, properties and equipment.ￂﾠ While bank assets are predominantly financial assets such as loans and securities and their liabilities are primarily deposits. Banks are also heavily regulated by authorities as such, capital, minimum liquidity, and the riskiness of assets must meet authorities￢ﾀﾙ requirements. Hence, certain conventional financial ratios such as Gross Profit Margin, Inventory Turnover, Current Ratio and D/E etc are not relevant. The most common rating approach for banks is ￢ﾀﾜCAMELS￢ﾀﾝ, an acronym of six components as follows: Capital adequacy Capital adequacy for banks is described in terms of the proportion of the bank￢ﾀﾙs assets funded with capital. For purposes of determining capital adequacy, a bank￢ﾀﾙs assets are adjusted based on their risk, with riskier ass...

Digress a bit this week ..

Peer-To-Peer (P2P) financing is gaining momentum lately in Malaysia ÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿ ÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿÂÿ...

Fourier Transform is one of the most important tools in the modern signal processing world ￂﾠ It is widely used in communications, geology, acoustic and engineering field.ￂﾠ However, its capability to decompose time series data into frequency domain has extended its usage to other fields such as finance and business (Read more here). In finance, moving average is a common indicator to track the movement of the stock market.ￂﾠ However, the period of the moving average indicator is normally selected at the discretion of the users, which sometimes may not be appropriate.ￂﾠ Fourier Transform is a good tool to determine the period for the moving average.ￂﾠ The following graph shows the significant period of the KLCI daily closing price determined by Fourier Transform. From the graph, short term significant periods are 8 and 17 days while medium term significant periods are 28, 43, and 61 days.ￂﾠ Fourier Transform computations could be found in popula...

The KLCI has been ÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâ ÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿâÿ...

In a previous article, stock market movement prediction using Google Trend search term (Read more here) was demonstrated ￂﾠ This week, a new search term will be used to study the stock market direction. In the following graph, the search term ￢ﾀﾜRecession￢ﾀﾝ frequency and the MSCI World Index were plotted together from 2004 to 2018.ￂﾠ The frequency of the search term is plotted in orange while the blue curve is the MSCI World Equity Index. Coincidently, two significant peaks of the search term frequency (red circle) occurred at the reversal of the market down trend.ￂﾠ This suggests that market might rebound when the sentiment is very negative.ￂﾠ So, our next question is whether the current ￢ﾀﾜrecession￢ﾀﾝ sentiment has reached its peak?ￂﾠ Google Trend might have the answer perhaps?

In previous article, RM exchange rate movement based on Brent Crude Oil and other political factors was demonstrated (Read more here) ￂﾠￂﾠToday, let's look at the impact of GE14 to RM. The chart below shows the relationship between RM and Brent Crude Oil.ￂﾠￂﾠThe scattered blue dots are the actual data of USD/RM corresponding to respective Brent Crude Oil price from July 2005 to July 2015 while the scattered red dots are the actual data of USD/RM corresponding to respective Brent Crude Oil price from August 2015 to December 2017.ￂﾠￂﾠThe green dots are pre-GE14 data while the yellow dots are post-GE14 data in 2018. Before the 1MDB scandal was exposed, RM was strongly correlated with oil price.ￂﾠￂﾠThis is shown by the blue dashed curve (July 2005 ￢ﾀﾓ July 2017, R2ￂﾠ= 0.74).ￂﾠￂﾠAfter the 1MDB scandal was exposed, RM was weakened to about one standard deviation from the historical trend.ￂﾠￂﾠIt was trading on the red dashed curve four month before the GE14.ￂﾠￂﾠHowever, RM...