Higgs Boson!

Just a bit of stuff I have been reading for leisure to todate. Opps, nothing related to finance!


WHEN it emerged that two experiments at CERN, the world's leading particle-physics laboratory on the outskirts of Geneva, are sending their most senior scientists to present the latest lowdown from the search for the Higgs particle on December 13th, speculations swirled. Will they at last confirm the existence of the boson, famously implicated in endowing other elementary particles with mass, which has eluded physicists for over 40 years? Might they say for sure that it does not exist, consigning the Standard Model, a framework which has governed particle physics for nearly as long on the assumption that it does, to the dustbin of dislodged theories—and sending their theoretically inclined colleagues back to the drawing board?
In the event, Fabiola Gianotti and Guido Tonelli, who lead ATLAS and CMS collaborations respectively, tried to sound a cautionary note. But the excitement during and after their presentations was palpable. For the two experiments have provided the most tantalising, though inconclusive, evidence to date for the existence of the sought-after particle, which Peter Higgs, a British physicist, plucked from mathematical formulae he had been working on in 1964 while trying to spruce up the Standard Model.
The model postulates the existence of 17 particles. Of these, 12 are fermions, like quarks (which coalesce into neutrons and protons in atomic nuclei), electrons (which whiz around these nuclei) and neutrinos (the ubiquitous, diaphanous beasts which have themselves been grabbing headlines of late by seemingly travelling faster than light). These make up ordinary matter. (All have corresponding anti-fermions which, logically, constitute antimatter.)
A further four particles, known as bosons, transmit three fundamental forces of nature. Familiar photons, particles of light, convey the electromagnetic force which holds electrons in orbit around atoms. Gluing quarks into protons and neutrons are appositely named gluons. Finally, W and Z bosons carry the weak nuclear force responsible for certain types of radioactive decay, as well as the hydrogen fusion which fuels stars. (How the fourth force, gravity, fits into all this remains arguably the greatest unsolved puzzle in physics.)
Physicists need the Higgs to make sense of the properties of these other 16 subatomic species. Without it, or something like it, they have no way to explain how fermions and some bosons get their mass. That, though, is not its main virtue. As far as the Standard Model is concerned, one could simply assume that mass is a fundamental property of particles with no need for further explanation. The rub is that a Higgs-less Standard Model predicts that all bosons should have no mass. Photons and gluons abide by this rule. The W and Z, by contrast, flout it, weighing almost as much as 100 protons.
Dr Higgs figured out (as did five other physicists around the same time) that this could be explained by postulating the existence of a field, later dubbed the Higgs field, which pervades all space. To understand how it works consider a ferromagnet which is heated up and then chilled. Each atom inside it acts as a minature magnet. At high temperatures, they wiggle around willy-nilly, not preferring any one direction to any other. The system is, in a sense, symmetrical: the milling atoms look the same whatever the observer’s vantage point. On reaching a particular temperature, though, they suddenly pick a preferred direction, creating a uniform magnetic field. They no longer look the same to different observers.
Something similar is believed to have happened with the Higgs field. At the scorching temparatures instants after the Big Bang it was in disarray and all elementary particles were oblivious to it. They were, in other words, massless. Moreover, photons, Ws and Zs all looked the same. There was no distinction between electromagnetism and the weak interaction. Instead, the three bosons conveyed the same “electroweak” force.
As the universe cooled, however, the pleasing uniformity suddenly collapsed: the Higgs field picked a direction. The W and Z feel the resulting field but the photon does not, just as some metals feel the pull of a ferromagnet and others don’t. Physicists say that on reaching a critical temperature, the symmetry between electromagnetic and weak force was spontaneously broken. The upshot may not look at all symmetrical, but it nonetheless reflects a deeper symmetry which just happens to be hidden from view in the low-temperature world. The Higgs boson emerges from the mathematical wizardry used to flesh out this symmetry-breaking mechanism.
Playing hard to get
Rolf-Dieter Heuer, the head of CERN, once quipped that physicists know everything about the Higgs apart from whether it exists. There are several reasons why the particle has proved so elusive. For a start, as Dr Heuer knows full well, his assertion is not strictly speaking true: theory is irritatingly noncommital about the particle’s mass. That means that searching for it involves looking across a wide range of possible masses. Past experiments at CERN's old accelerator, the Large Electron-Positron Collider (LEP), ruled out masses below 114 gigaelectron-volts (GeV), the esoteric unit particle physicists like to use. Anything higher, though, has been fair game.
Both ATLAS and CMS draw their subatomic cannon fodder from the LEP’s snazzier successor, the Large Hadron Collider (LHC), CERN’s (and the world’s) biggest particle accelerator. The LHC, housed in a 27km circular tunnel beneath the Franco-Swiss border, collides protons whizzing around it in opposite directions at a smidgen below the speed of light. The colliding protons’ kinetic energy is converted into other particles (since, as Einstein showed, energy and mass are one and the same). More precisely, each proton-proton collision involves a handful of quarks and gluons. It is only two of these that actually collide. The remaining lot cannot exist by themselves and decay to produce obfuscating detritus.
Moreover, the Higgs, should it emerge from such a collision, is unstable and immediately decays into less fleeting bits. ATLAS and CMS are honed to detect particular patterns of the less chimerical particles that the Higgs is believed to morph into. Unfortunately, the same patterns are not specific to the Higgs; other subatomic processes produce an abundance of identical telltales. So the experiments are not after a signature signal but a excess of such signals—a fraction of a percent or less—over what would be expected were the Higgs not real. Each having analysed some 380 trillion collisions recorded since the LHC got cracking in earnest in 2010, both have now seen just such an excess, around 125GeV.
At between one chance in 2,000 to one in 20 of being a fluke—depending on what statistical method is used—the findings fall short of the exacting one-in-3.5m target particle physicists have set themselves to claim discovery with confidence. But the fact that independent measurements of different possible decay patterns (especially extremely rare ones involving the production of two photons) from two separate experiments point to a mass of the putative Higgs within a few GeV of each other has led some physicists to claim that discovery is afoot.
Other see this as premature. Earlier this year both CMS and ATLAS presented alluring bumps around 130-140GeV but these evaporated on closer inspection. However, at the time they also observed smaller spikes around 125GeV which now appear to have grown into something statistically sturdier.
Importantly, ATLAS and CMS have also ruled out pretty much the entire range below 115GeV and between 130-600GeV, beyond which the LHC currently lacks the oomph to whip up anything of interest. This means that they can now focus their efforts on probing the interesting 15GeV-wide band. Dr Tonelli and Aleandro Nisati, who helps co-ordinate ATLAS’s research efforts, are wary of committing to a date by which a definitive answer to the Higgs question will be known. If all goes well, though, it could be as early as a few months from now.
Should the latest findings be confirmed, the next step will be to ascertain that the bump in question really is the sort of Higgs its eponymous conjurer envisaged. That will mean making precise measurements not just of its mass, but also of other properties like its assorted charges. If this ends in success, the Standard Model will finally be complete, and Dr Higgs will no doubt have earned his Nobel Prize, together with two other of the six physicists who came up with the same idea. (The Nobel committee’s rules prevent the prize being split more than three ways.)
A Higgs with a mass of 125GeV is also, in the words of John Ellis, a former head of theory at CERN, “just dandy” for a theory called supersymmetry which many see as the most viable successor to the Standard Model. It postulates the existence of heavier partners to all the known particles, and by doing so neatly explains many aspects of the physical reality the Standard Model has no purchase on. If a Higgs exists and weighs around 125GeV, then, the LHC ought, in principle, to be powerful enough to create the lighest supersymmetric particles.

Interpreting Analysts' Reports

I find the comments given below quite useful for a reference:-

Ritholtz culled the research on stock analysts from outside parties like McKinsey and Bianco Research and came to a few meaningful conclusions:

1. Analysts are almost always too optimistic. "Looking a year out, their earnings expectations are about twice the growth rate we've averaged," he says. So far pretty much in line with what we thought, but it gets better from here.

2. Analysts are "especially wrong at turning points as you head into a recession."

3. The "only time they weren't too bullish," Ritholtz notes, "was right in the middle of a recession."

Eurozone Crisis

I did some analysis. Currently the French CAX 40 is trading at around 2800+,  which is around the level of March 18th 2009. At the lowest during the last 2008/2009 Financial Crisis, it was trading at 2519 in March 10th 2009.  The only other time in the last ten years it is trading at such level was during the 2003 Sars crisis.

Also, I read a report that says that currently the three big French Banks (BNP, SocGen and Credit Agricole) are trading at valuations that will assume 100% percent writeoff of their Greek, Irish and Portuguese debts. For SocGen, it is also discounting their Spanish and Italian debts.  However, I do not know if their holding on commercial papers for these countries are discounted too. It would be logical that in the event of a Greek default, a lot of companies are going to bankrupt and will affect the French banks holding private sector debts.

I would think the event of a Greek default is currently priced in for the French Banks and I suspect the German Banks too. However, the effect of a contagion effect is hard to estimate as the EU todate has not demonstrated the ability to act with a single-mindedness like the Fed and US Treasury during a crisis.

Looking for Signs of an Impending Recession

There are two key problems facing the global economy right now that is generating a lot of uncertainty and fear in the market. One is the prospect of a impending recession in the US and second is the crisis in the eurozone.

Will there be a recession in the US? I am looking for signs of financial stress, slump in consumer spending, spike in unemployment and deacceleration in business activities. I do not yet find any signs of these as yet though signs of a slowdown to a grinding halt is pretty clear. A major jolt may bring things down to negative but is not a definite.

August Summary

This is a hyperbolic month. It can be painful to see how your portfolio shrink rapidly in size just over a couple of days. However, I did not sell anything but did a bit of trading which I typically seldom do. Leverage on the downtrend to make some small investments into SembCorp and Capitaland.

However, on the plus side, the dividends I got for this month is pretty good. I had dividends for the following counters this month:-

KeppelCorp
SIA
SATS
K-Green
SingTel
SuntecReit
FirstReit
StarHill
LMIR
SBSTransit
CitySpring
SingPost

Buffet'S Advantage

This is a good article that remind us that you may read as much as you want about financial guru like Buffet but ultimately you just cannot imitate him blindly. With GIC backing, Tony Tan tried but without similar success though.

Warren Buffett is renowned as America's best investor. He's a grandfatherly guy who lives in a modest house in Omaha, Neb. and only invests in everyday companies that he can understand. He is friends with Bill Gates, but never invested in Microsoft or any other Internet company.
Buffett's technique is simple. He finds a good company, invests at a bargain price, and then rides the company to greater success. He's made millions in Coca Cola, American Express, Wells Fargo, and the Washington Post. And he makes it look so easy that anyone could do it. But it's extremely unlikely that you will be able to match Buffett's level of success, even if you pick the same investments he does.

Back in 2008, during the height of the financial crisis, Warren Buffet made a highly publicized investment in the Wall Street firm Goldman Sachs. Buffett was buying when everyone else was panicking, and as a result many experts thought he was getting into a top company at a discount price.
You, too, could have invested in Goldman Sachs in 2008. But here's the difference between you and Buffett. If you had an extra $12,000, you could have purchased 100 shares of Goldman common stock at $120 a share. Considering that Goldman had been worth over $200 a share the year before, you might have thought you were getting a pretty good discount. You also would be receiving the Goldman dividend of $1.40 a share, a rate of just over 1 percent.

But Buffett had more than $12,000 to invest. He had $5 billion. So he negotiated a much better deal. He bought preferred stock that came with a special dividend. Instead of 1 percent, he negotiated a 10 percent dividend. So now every year he receives a check for $500 million. Then, only after he gets paid, do common stockholders get their paltry 1 percent.

So now, three years later, how have we done? Goldman is selling at roughly $110 a share, slightly below its 2008 price. If you had invested with Buffett, you would have lost about $1,000. Buffett's lost some capital too, but he's collected $500 million a year in his special dividend.
Buffett made a similar deal with General Electric. In 2008 he bought $3 billion in preferred shares with a 10 percent dividend. But you wouldn't have done well to follow him. The stock was selling at around $21 a share in the fall of 2008. Now it's running between $15 and $16, a loss of over 20 percent. But remember, unlike regular investors, Buffett's been collecting that 10 percent dividend. He's still ahead of the game.
Now Buffett is investing in beleaguered Bank of America. He invested $5 billion in a special preferred stock and will be getting a 6 percent dividend, while the regular stock you can buy pays less than 1 percent. Now I don't know whether Bank of America is a good deal at current prices. Maybe it is. But the point is, if you buy now, you're not getting the same terms as Buffett. You're just pumping money into his dividend payment and hoping for the best.

Buffet's Suggestion

Just come across an article from Buffet which I totally agree. We, in Singapore should do the same to foster a sense of social cohesion and prevent us from turning into a tax refuge for the super-rich else where.

Here is a segment extract:-
"For those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate. "