Tuesday, September 29, 2015
Monday, September 28, 2015
Crimson glory: All you need to know about the rare blood moon, Singapore News & Top Stories - The Straits Times
'via Blog this'
Global stocks tumble: Commodities lead the slump
Global stocks tumble: Commodities lead the slump: "Asian stock markets saw sharp losses on Tuesday with their European peers set to open the session on the back foot.
Japan's Nikkei Index slumped to an 8-month low, down around 4 percent, with Hong Kong and Australian shares also seeing a heavy bout of selling.
Commodity plays were among the biggest casualties as global growth and central bank policy in the U.S. continue to concern investors."
'via Blog this'
Japan's Nikkei Index slumped to an 8-month low, down around 4 percent, with Hong Kong and Australian shares also seeing a heavy bout of selling.
Commodity plays were among the biggest casualties as global growth and central bank policy in the U.S. continue to concern investors."
'via Blog this'
PayPal launches new e-commerce system in China | Telecom Asia
PayPal launches new e-commerce system in China | Telecom Asia: "Paypal has launched PayPal Biz+, a dedicated solution to help Chinese merchants unlock opportunities in the cross-border business-to-business-to-consumer (B2B2C) e-commerce market.
The solution was launched at the fourth annual Cross-Border E-Commerce Conference in Shenzhen, which gathered over 800 merchants from small-and-medium enterprises to large enterprises.
PayPal sees the B2B export market as a key growth driver of China’s 4 trillion yuan and rapidly-growing cross-border e-commerce market. The sector represents 80% of China’s total cross-border e-commerce market in 2014, which is expected to double by 2017.
“Opportunities in cross-border e-commerce abound for Chinese merchants. We have found a particularly exciting opportunity in the B2B2C sector where Chinese merchants sell to overseas buyers who in turn sell to end consumers,” said Patrick Foo, Head of Cross-border Business, PayPal China.
PayPal Biz+ solution is a comprehensive suite of offerings, which include seller protection from various risks, including unauthorized claims for payment reversal, refunds or “Item not received;” Renminbi withdrawal service to be launched in partnership with LianLianPay; risk management which helps merchants identify and avoid fraud at the earliest stage possible; and international logistics"
'via Blog this'
The solution was launched at the fourth annual Cross-Border E-Commerce Conference in Shenzhen, which gathered over 800 merchants from small-and-medium enterprises to large enterprises.
PayPal sees the B2B export market as a key growth driver of China’s 4 trillion yuan and rapidly-growing cross-border e-commerce market. The sector represents 80% of China’s total cross-border e-commerce market in 2014, which is expected to double by 2017.
“Opportunities in cross-border e-commerce abound for Chinese merchants. We have found a particularly exciting opportunity in the B2B2C sector where Chinese merchants sell to overseas buyers who in turn sell to end consumers,” said Patrick Foo, Head of Cross-border Business, PayPal China.
PayPal Biz+ solution is a comprehensive suite of offerings, which include seller protection from various risks, including unauthorized claims for payment reversal, refunds or “Item not received;” Renminbi withdrawal service to be launched in partnership with LianLianPay; risk management which helps merchants identify and avoid fraud at the earliest stage possible; and international logistics"
'via Blog this'
PayPal Here goes contactless - BIT
PayPal Here goes contactless - BIT: "A new contactless version of PayPal's Here card reader has arrived.
Back in March, PayPal announced that a contactless version of its PayPay Here card reader would be available "later in 2015."
Later, it turns out, was September. The new device costs $149 ($99 more than the Chip and PIN version), but there's no mention of a trade-in arrangement for owners of earlier models.
It works in conjunction with the PayPal Here app for iOS and most Android devices, and allows businesses to accept Mastercard and Visa payments (contactless, chip and PIN, or swipe; and credit or debit), with a transaction fee of 1.95 percent.
The app also sends receipts, processes refunds, displays sales history, and allows transfers from PayPal to an associated bank account.
Contactless payments are seen as a timesaver by a majority of Australian consumers and small business operators, according to PayPal's research.
"Consumers now expect the same level of technology from their local market stall as they experience at leading retailers and that level of expectation can be challenging and expensive for Aussie small businesses," said Emma Hunt, director of small business, PayPal Australia.
"With the local launch of the new PayPal Here device we're hoping to bridge that divide and provide the convenience and choice of payment options for businesses of every size."
PayPal's web site suggests the contactless reader is available from Officeworks, but at the time of writing that company only listed the Chip and PIN model."
'via Blog this'
Back in March, PayPal announced that a contactless version of its PayPay Here card reader would be available "later in 2015."
Later, it turns out, was September. The new device costs $149 ($99 more than the Chip and PIN version), but there's no mention of a trade-in arrangement for owners of earlier models.
It works in conjunction with the PayPal Here app for iOS and most Android devices, and allows businesses to accept Mastercard and Visa payments (contactless, chip and PIN, or swipe; and credit or debit), with a transaction fee of 1.95 percent.
The app also sends receipts, processes refunds, displays sales history, and allows transfers from PayPal to an associated bank account.
Contactless payments are seen as a timesaver by a majority of Australian consumers and small business operators, according to PayPal's research.
"Consumers now expect the same level of technology from their local market stall as they experience at leading retailers and that level of expectation can be challenging and expensive for Aussie small businesses," said Emma Hunt, director of small business, PayPal Australia.
"With the local launch of the new PayPal Here device we're hoping to bridge that divide and provide the convenience and choice of payment options for businesses of every size."
PayPal's web site suggests the contactless reader is available from Officeworks, but at the time of writing that company only listed the Chip and PIN model."
'via Blog this'
PayPal Here launches a mobile card reader that accepts Android Pay and Apple Pay | VentureBeat | Mobile | by Ruth Reader
PayPal Here launches a mobile card reader that accepts Android Pay and Apple Pay | VentureBeat | Mobile | by Ruth Reader: "PayPal Here is announcing the rollout of a new chip-card reading dongle in the U.S. that will also accept contactless mobile payments, including Android Pay and Apple Pay.
The announcement comes as Visa and MasterCard are shifting account holders over to chip-based credit cards. The new reader is set to debut on September 30 and will be available in the U.S., as well as the U.K. and Australia, where PayPal has previously launched chip-card reading dongles."
'via Blog this'
The announcement comes as Visa and MasterCard are shifting account holders over to chip-based credit cards. The new reader is set to debut on September 30 and will be available in the U.S., as well as the U.K. and Australia, where PayPal has previously launched chip-card reading dongles."
'via Blog this'
Tidal wave of cash headed this way!
I told you that as wealthy European investors and institutions read the handwriting on the wall, they would cash in their euros for dollars and then use them to buy stocks and other assets right here in the United States.
And I also told you that the rich and super-rich in Japan would do the same.
And they are — in droves. And every euro and every yen of flight capital that flows here is driving our supercycle investments higher.
But it turns out, that's only part of the story.
Because the demise of Europe and Japan — two of the world's largest economies — is adding to the stress being felt around the world right now. And it is triggering a tsunami of cash from all corners of the globe!
Consider this: As if to agree with my cycles analysis, Qatar's government investment fund — the Qatar Investment Authority (QIA) — is opening an office in New York in order to invest $35 billion right here in the United States!
Mark my words: This is only the beginning of a mega tidal wave of cash headed this way from the Middle East!
Imagine this: You are a wealthy sheikh in the Middle East. You see Europe crumbling before your very eyes. You see Japan teetering on the brink of default.
And you also see your own neighborhood being threatened. Russia seizing power in Syria ... Iraq on the verge of collapse ... ISIS tearing across the Middle East ... oil prices cratering ... and worse.
The question is, how much of your money do you want to leave exposed to these massive risks?
The answer many are giving is, "as little as possible!""
This is precisely why I created Supercycle Trader: To help you harness the most powerful economic wave any of us will ever see in our lifetimes: The supercycle of 2015-2020.
You owe it to yourself to get the facts: Click this link to discover how you can not only survive, but USE this crisis to go for windfall profits.
But please hurry: All enrollment must close on October 7 — just 9 short days from today.Click this link ... get the facts ... and join me in Supercycle Trader while there's still time.
Yours for supercycle survival and profits,
Larry Edelson
Senior Analyst, Weiss Research,
Editor, Supercycle Trader
Gov't shutdown would spur quick gold rally: Trader
With gold currently near $1,135 per troy ounce, the commodity will be worth a look once it breaks back above resistance at $1,151, Streible said. Once that happens, "we'll probably push on up to about the 200-day moving average at $1,174."
Richard Branson: VW cheating may be 'positive news'
Richard Branson: VW cheating may be 'positive news': "Branson's golden rule for entrepreneurs
The Virgin conglomerate runs branded businesses worldwide in industries including mobile, airlines, financial services, music, health and wellness and space.
Branson said he ended up getting into the airline business because he was bumped on the flight of one of his eventual competitors.
Even though Virgin seems be into everything, he said his rule for putting his brand on a business is: Can it do what it does better than its competitors"
'via Blog this'
The Virgin conglomerate runs branded businesses worldwide in industries including mobile, airlines, financial services, music, health and wellness and space.
Branson said he ended up getting into the airline business because he was bumped on the flight of one of his eventual competitors.
Even though Virgin seems be into everything, he said his rule for putting his brand on a business is: Can it do what it does better than its competitors"
'via Blog this'
NEWS | EMAS AMC Completes 2 Subsea Tieback Projects for Noble Energy in US GOM | Rigzone
NEWS | EMAS AMC Completes 2 Subsea Tieback Projects for Noble Energy in US GOM | Rigzone: "Ezra Holdings Limited (Ezra or the Group), a Singapore-based contractor and provider of integrated offshore solutions to the oil and gas (O&G) industry, disclosed Monday its Subsea Services division, EMAS AMC has successfully completed the first two of three Noble Energy-operated subsea tieback projects in the U.S. Gulf of Mexico.
The scope of work included project management, fabrication and installation of 8-inch steel catenary risers and 40 miles (64 kilometers) of 8-inch and 12-inch Pipe-in-Pipe (PIP) for the Big Bend and Dantzler field development projects in 7,000 feet (2,100 meters) of water depth. It also included the design, fabrication and installation of eight subsea structures weighing up to 100 tons each. All project management activities were performed at EMAS’ office in Houston, with pipeline production and structures fabrication at the EMAS Marine Base (EMB) in Ingleside, Texas.
Since May, Lewek Constellation has conducted more than 30 heavy lifts between 900 and 2,200 tons transferring rigid pipe reels, many of them in open water locations, for the Big Bend and Dantzler projects. This game-changing technology of multiple, transportable reels combined with heavy lift capability reduces the transit time and eliminates the need for direct spooling by the installation vessel, keeping the vessel in pipelay mode throughout the entire project. This effectively decouples Lewek Constellation from the spool base and takes the pipeline fabrication off the critical path.
“We are extremely proud of our achievements on these two field developments”, said Lionel Lee, Ezra Group CEO and Managing Director, “We are proud to announce a record for what we understand is the heaviest Pipe in Pipe (PIP) system ever deployed in the world using the reeling methodology, whilst proving the viability of our offshore reel-transfer technology in open waters. Our game-changing vessel used in combination with our unique transportable reel delivery system will offer clients more efficient pipe-lay options in ultra-deepwater when compared to more traditional methods.”
Lewek Constellation and Lewek Connector are now mobilized to lay the pipeline and umbilicals on the Noble Energy-operated Gunflint development project."
'via Blog this'
The scope of work included project management, fabrication and installation of 8-inch steel catenary risers and 40 miles (64 kilometers) of 8-inch and 12-inch Pipe-in-Pipe (PIP) for the Big Bend and Dantzler field development projects in 7,000 feet (2,100 meters) of water depth. It also included the design, fabrication and installation of eight subsea structures weighing up to 100 tons each. All project management activities were performed at EMAS’ office in Houston, with pipeline production and structures fabrication at the EMAS Marine Base (EMB) in Ingleside, Texas.
Since May, Lewek Constellation has conducted more than 30 heavy lifts between 900 and 2,200 tons transferring rigid pipe reels, many of them in open water locations, for the Big Bend and Dantzler projects. This game-changing technology of multiple, transportable reels combined with heavy lift capability reduces the transit time and eliminates the need for direct spooling by the installation vessel, keeping the vessel in pipelay mode throughout the entire project. This effectively decouples Lewek Constellation from the spool base and takes the pipeline fabrication off the critical path.
“We are extremely proud of our achievements on these two field developments”, said Lionel Lee, Ezra Group CEO and Managing Director, “We are proud to announce a record for what we understand is the heaviest Pipe in Pipe (PIP) system ever deployed in the world using the reeling methodology, whilst proving the viability of our offshore reel-transfer technology in open waters. Our game-changing vessel used in combination with our unique transportable reel delivery system will offer clients more efficient pipe-lay options in ultra-deepwater when compared to more traditional methods.”
Lewek Constellation and Lewek Connector are now mobilized to lay the pipeline and umbilicals on the Noble Energy-operated Gunflint development project."
'via Blog this'
Swiss watchdog opens probe into precious metal manipulation by UBS, HSBC
Swiss watchdog opens probe into precious metal manipulation by UBS, HSBC: "The Swiss competition regulator said on Monday it had opened an investigation into possible manipulation of the precious metals market by several major banks.
Switzerland's WEKO watchdog said its investigation, the result of a preliminary probe, was looking at possible collusion of bid/ask spreads in the market by UBS, Julius Baer, Deutsche Bank, HSBC, Barclays, Morgan Stanley and Mitsui.
Read MoreSwiss investigate Blatter for criminal mismanagement of FIFA
"It (WEKO) has indications that possible prohibited competitive agreements in the trading of precious metals were agreed among the banks mentioned," WEKO said in a statement.
A WEKO spokesman said the investigation would likely conclude in either 2016 or 2017, adding that the banks were suspected of violating Swiss corporate rules.
The WEKO investigation is the latest in a string of probes into manipulation of the precious metals and foreign exchange markets.
Last year, Switzerland's financial regulator FINMA said it had found a "clear attempt" to manipulate precious metals price benchmarks during a cross-market investigation into trading at UBS.
In May, four major banks pleaded guilty to trying to manipulate foreign exchange rates and, with two others, were fined nearly $6 billion in another settlement in a global investigation into the $5 trillion-a-day market."
'via Blog this'
Switzerland's WEKO watchdog said its investigation, the result of a preliminary probe, was looking at possible collusion of bid/ask spreads in the market by UBS, Julius Baer, Deutsche Bank, HSBC, Barclays, Morgan Stanley and Mitsui.
Read MoreSwiss investigate Blatter for criminal mismanagement of FIFA
"It (WEKO) has indications that possible prohibited competitive agreements in the trading of precious metals were agreed among the banks mentioned," WEKO said in a statement.
A WEKO spokesman said the investigation would likely conclude in either 2016 or 2017, adding that the banks were suspected of violating Swiss corporate rules.
The WEKO investigation is the latest in a string of probes into manipulation of the precious metals and foreign exchange markets.
Last year, Switzerland's financial regulator FINMA said it had found a "clear attempt" to manipulate precious metals price benchmarks during a cross-market investigation into trading at UBS.
In May, four major banks pleaded guilty to trying to manipulate foreign exchange rates and, with two others, were fined nearly $6 billion in another settlement in a global investigation into the $5 trillion-a-day market."
'via Blog this'
Sunday, September 27, 2015
Icahn warns of potential looming catastrophe
Icahn warns of potential looming catastrophe: "Danger ahead - that's the warning from Carl Icahn in a video coming tomorrow.
The activist says low rates caused bubbles in art, real estate and high-yield bonds – with potentially dramatic consequences.
"It's like giving somebody medicine and this medicine is being given and given and given and we don't know what's going to happen - you don't know how bad it's going to be. We do know when we did it a few years ago it caused a catastrophe, it caused '08. Where do you draw the line?"
In a telephone interview, Icahn said he's "more hedged now than I've been in years."
"The Fed may have backed itself into a corner. They should have absolutely raised rates six months ago," adding it's difficult now because of global concerns."
'via Blog this'
The activist says low rates caused bubbles in art, real estate and high-yield bonds – with potentially dramatic consequences.
"It's like giving somebody medicine and this medicine is being given and given and given and we don't know what's going to happen - you don't know how bad it's going to be. We do know when we did it a few years ago it caused a catastrophe, it caused '08. Where do you draw the line?"
In a telephone interview, Icahn said he's "more hedged now than I've been in years."
"The Fed may have backed itself into a corner. They should have absolutely raised rates six months ago," adding it's difficult now because of global concerns."
'via Blog this'
The Best-Of-The-Best Value Singapore REITs | The Motley Fool Singapore
The Best-Of-The-Best Value Singapore REITs | The Motley Fool Singapore: "Having looked at Singapore’s REITs by sector, the next logical step is to play off the best REITs in each group against each other to find Singapore’s best-of-the-best value REITs.
Value investors look for companies that meet certain stringent criteria. These include lower than average price-to-earnings ratio and an attractive price relative to book. A good value company should also have an above-average dividend yield. Additionally, it should have little or no debt.
Of all the Singapore-listed REITs how many ticks all the required boxes?
Since debt is an almost unavoidable part of REITs’ make up, we can relax the debt criterion and focus on the other three measures of value.
Of the 26 listed REITs, six manage to fulfil the first three criteria. These six are Ascott Residence Trust (SGX: A68U), Perennial China Retail Trust (SGX: N9LU), Keppel REIT (SGX: K71U), Frasers Commercial Trust (SGX: ND8U), Fortune Real Estate Investment Trust (SGX: F25U) and Mapletree Greater China Commercial Trust (SGX: RW0U).
Fortune and Frasers were two of the better looking amongst the Retail REITs. And with a price-to-earnings ratio of just 4.3, Fortune REIT appears to be the best value investment on this measure alone.
In terms of dividend yields, neither Fortune nor Fraser offer the best yield. Lippo Malls Indonesia Retail Trust (SGX: D5IU) with a yield of 7.8% is the best in class. However, Ascendas Hospitality Trust and Sabana REIT are not far behind, with yields of 7.4%.
Finally, the Holy Grail of value investing, namely the price-to-book ratio. Coming out trumps is Fortune REIT, which is priced at more than 30% discount to its book value. It is followed closely by Perennial China which has a price-to-book ratio of 0.73.
So, with an ultra-low PE ratio of 4.3; a dividend yield of 5.8% and a price-to-book of 0.66, Hong Kong-focussed, Fortune REIT, could be the current best-of-the-best value REIT in Singapore."
'via Blog this'
Value investors look for companies that meet certain stringent criteria. These include lower than average price-to-earnings ratio and an attractive price relative to book. A good value company should also have an above-average dividend yield. Additionally, it should have little or no debt.
Of all the Singapore-listed REITs how many ticks all the required boxes?
Since debt is an almost unavoidable part of REITs’ make up, we can relax the debt criterion and focus on the other three measures of value.
Of the 26 listed REITs, six manage to fulfil the first three criteria. These six are Ascott Residence Trust (SGX: A68U), Perennial China Retail Trust (SGX: N9LU), Keppel REIT (SGX: K71U), Frasers Commercial Trust (SGX: ND8U), Fortune Real Estate Investment Trust (SGX: F25U) and Mapletree Greater China Commercial Trust (SGX: RW0U).
Fortune and Frasers were two of the better looking amongst the Retail REITs. And with a price-to-earnings ratio of just 4.3, Fortune REIT appears to be the best value investment on this measure alone.
In terms of dividend yields, neither Fortune nor Fraser offer the best yield. Lippo Malls Indonesia Retail Trust (SGX: D5IU) with a yield of 7.8% is the best in class. However, Ascendas Hospitality Trust and Sabana REIT are not far behind, with yields of 7.4%.
Finally, the Holy Grail of value investing, namely the price-to-book ratio. Coming out trumps is Fortune REIT, which is priced at more than 30% discount to its book value. It is followed closely by Perennial China which has a price-to-book ratio of 0.73.
So, with an ultra-low PE ratio of 4.3; a dividend yield of 5.8% and a price-to-book of 0.66, Hong Kong-focussed, Fortune REIT, could be the current best-of-the-best value REIT in Singapore."
'via Blog this'
Saturday, September 26, 2015
Singapore’s Big Winner of the Week: A Stock that Yields a Mighty 22% | The Motley Fool Singapore
Singapore’s Big Winner of the Week: A Stock that Yields a Mighty 22% | The Motley Fool Singapore: "Going forward, T T J said it remains confident of the long term prospects and growth potential of its business. T T J’s Chairman and Managing Director, Teo Hock Chwee, said that the huge spike in dividends is a “testament to [management’s] confidence and the underlying strength of the Group.” As of 23 September 2015, the company’s order book stood at $99 million. T T J ended 31 July 2015 with a strong balance sheet carrying S$84.1 million in cash and just S$166,000 in borrowings.
At its current price, T T J is valued at just 8 times its trailing earnings and sports a dividend yield of a whopping 22%."
'via Blog this'
At its current price, T T J is valued at just 8 times its trailing earnings and sports a dividend yield of a whopping 22%."
'via Blog this'
3 Easy Ways for You to Lose Money in the Stock Market | The Motley Fool Singapore
3 Easy Ways for You to Lose Money in the Stock Market | The Motley Fool Singapore: "
1
inShare
American actor and humourist Will Rogers once said, “There are three kinds of men. Some learn by reading. Some learn by observation. The rest of them must pee on the electric fence for themselves.”
For obvious reasons, it’s far better to belong in the first two camps than the last. Here are some investing mistakes that have already been made by others so that we hopefully won’t have to repeat them again.
1. Using leverage to get rich quick
Investing in the stock market is a way to build wealth slowly but surely. Trying to quicken the process through the use of leverage (a.k.a. borrowed money) can be dangerous.
Warren Buffett and Charlie Munger are today a renowned duo of investors who sit at the helm of the giant American conglomerate and investment holding company Berkshire Hathaway. But, not many realise that in the earlier days of their career, Buffett and Munger were part of a trio with an individual called Rick Guerin.
According to Buffett, Guerin was every bit as good an investor as him and Munger. But, Guerin was in a hurry to get rich while Buffett and Munger were not.
To hasten his wealth-building process, Guerin invested with borrowed money. When there was a severe bear market in U.S. stocks in 1973 and 1974 (stocks fell by nearly half in that episode), Guerin had to meet margin calls as a result of his use of leverage to invest.
In order to raise the capital needed, Guerin was forced to sell his Berkshire stock to Buffett for less than US$40 apiece. Today, the same Berkshire shares are trading at US$192,200 each.
The stock market holds massive long-term potential but can be very volatile over the short-term. Those ups-and-downs, coupled with the use of leverage, can rob even the smartest of investors the chance to benefit from the long-term wealth-building capabilities of stocks.
2. Betting on macro-economic themes
If you knew a commodity’s price would more than triple over the next decade, you would think that purchasing shares of the commodity’s producers will be a surefire way to riches right? Wrong.
Gold was worth A$620 per ounce at end-September 2005. As of 15 September 2015, the precious metal has grown by 250% to A$1,550 (or nearly 10% a year). But, Australian gold miners have been a horrible investment as a group over the same period. To that point, the S&P / ASX All Ordinaries Gold Index, a market index made up of Australian gold mining stocks, has declined by nearly 4% per year from 3,372 points to 2,245.
There are many obstacles that stand between a growing macro-trend and a winning investment (the company’s business growth and its starting valuations are two such obstacles). As investors, we have to focus on the obstacles.
Along the same vein, while the price of crude palm oil had recently reached a six-year low, it does not necessarily mean that palm oil producers – like Golden Agri-Resources Ltd (SGX: E5H), Kencana Agri Ltd (SGX: F9M), and Bumitama Agri Ltd (SGX: P8Z), for instance – will make for a good long-term investment if and when the price of palm oil proceeds to rebound strongly.
3. Jumping in and out of our stocks
The legendary investor Peter Lynch once said that “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” He’s onto something here."
'via Blog this'
1
inShare
American actor and humourist Will Rogers once said, “There are three kinds of men. Some learn by reading. Some learn by observation. The rest of them must pee on the electric fence for themselves.”
For obvious reasons, it’s far better to belong in the first two camps than the last. Here are some investing mistakes that have already been made by others so that we hopefully won’t have to repeat them again.
1. Using leverage to get rich quick
Investing in the stock market is a way to build wealth slowly but surely. Trying to quicken the process through the use of leverage (a.k.a. borrowed money) can be dangerous.
Warren Buffett and Charlie Munger are today a renowned duo of investors who sit at the helm of the giant American conglomerate and investment holding company Berkshire Hathaway. But, not many realise that in the earlier days of their career, Buffett and Munger were part of a trio with an individual called Rick Guerin.
According to Buffett, Guerin was every bit as good an investor as him and Munger. But, Guerin was in a hurry to get rich while Buffett and Munger were not.
To hasten his wealth-building process, Guerin invested with borrowed money. When there was a severe bear market in U.S. stocks in 1973 and 1974 (stocks fell by nearly half in that episode), Guerin had to meet margin calls as a result of his use of leverage to invest.
In order to raise the capital needed, Guerin was forced to sell his Berkshire stock to Buffett for less than US$40 apiece. Today, the same Berkshire shares are trading at US$192,200 each.
The stock market holds massive long-term potential but can be very volatile over the short-term. Those ups-and-downs, coupled with the use of leverage, can rob even the smartest of investors the chance to benefit from the long-term wealth-building capabilities of stocks.
2. Betting on macro-economic themes
If you knew a commodity’s price would more than triple over the next decade, you would think that purchasing shares of the commodity’s producers will be a surefire way to riches right? Wrong.
Gold was worth A$620 per ounce at end-September 2005. As of 15 September 2015, the precious metal has grown by 250% to A$1,550 (or nearly 10% a year). But, Australian gold miners have been a horrible investment as a group over the same period. To that point, the S&P / ASX All Ordinaries Gold Index, a market index made up of Australian gold mining stocks, has declined by nearly 4% per year from 3,372 points to 2,245.
There are many obstacles that stand between a growing macro-trend and a winning investment (the company’s business growth and its starting valuations are two such obstacles). As investors, we have to focus on the obstacles.
Along the same vein, while the price of crude palm oil had recently reached a six-year low, it does not necessarily mean that palm oil producers – like Golden Agri-Resources Ltd (SGX: E5H), Kencana Agri Ltd (SGX: F9M), and Bumitama Agri Ltd (SGX: P8Z), for instance – will make for a good long-term investment if and when the price of palm oil proceeds to rebound strongly.
3. Jumping in and out of our stocks
The legendary investor Peter Lynch once said that “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” He’s onto something here."
'via Blog this'
Friday, September 25, 2015
Fishing Around For a Gold Cycle Bottom - Free Weekly Technical Analysis Chart - McClellan Financial
Fishing Around For a Gold Cycle Bottom - Free Weekly Technical Analysis Chart - McClellan Financial: "The price bottom associated with gold's 13-1/2 month cycle is ideally due right now. The problem is that gold does not always bottom exactly when it is supposed to, and there is still work yet to do. By that I mean that there are tasks associated with this cycle bottom which gold has not yet accomplished.
I mentioned back in April 2014 that gold was currently in "left translation" for this current cycle, and that this implies we should see a price low at the cycle bottom which goes below the December mid-cycle low. That means a dip to below around $1190/oz.
There is another feature of some of these cycles which I believe is making an appearance this time, and that is the tendency to see a late blowoff move just ahead of the final cycle low. The blue arrows in the chart above highlight some examples of this behavior, and it is not just a recent phenomenon. Here is a look back further in time, to show that this tendency for a late "
'via Blog this'
I mentioned back in April 2014 that gold was currently in "left translation" for this current cycle, and that this implies we should see a price low at the cycle bottom which goes below the December mid-cycle low. That means a dip to below around $1190/oz.
There is another feature of some of these cycles which I believe is making an appearance this time, and that is the tendency to see a late blowoff move just ahead of the final cycle low. The blue arrows in the chart above highlight some examples of this behavior, and it is not just a recent phenomenon. Here is a look back further in time, to show that this tendency for a late "
Please note that all sell signals occurred in either September or October (more about that later).
October 2008 was not the most opportune time to buy, although buying worked out better for buy-and hold investors than selling. The September 2001 and October 2002 sell signals were just plain wrong. They occurred within days of fairly significant lows.
According to data from SentimenTrader, there were 14 similar sell signals from 1930-1990. Six months later, the Dow Jones Industrials traded higher nine of 14 times.
If you come across a research piece highlighting the validity of the recent Dow Theory sell signal, you may be better off ignoring it than exploring it. Now may not be the time to rely on the “bell bottom” of market guides.
Perhaps the most important message of the above chart is that some of the best buying opportunities occurred in September or October.
Could this September/October be the same, or will this year be more like 2007?
Tom McClellan
Editor, The McClellan Market Report
'via Blog this'
The Magic of 150 Months - Free Weekly Technical Analysis Chart - McClellan Financial
The basic point is that a period of 150 months (12.5 years) shows up in lots of places as the time distance between several important turning points for stock prices. The price data in the chart this week is the log value of the monthly close of the DJIA. Using log scaling allows us to better see the turning points without the effect of arithmetic scaling interfering with the view.
Readers should understand that this is not meant to show a 150-month cycle persisting throughout history. Rather, it is an interesting coincidence that if you count forward by about 150 months from almost any major price turning point (high or low), you find another one, although not necessarily of the same type. There are probably even more such relationships than just the ones shown here.
As we noted in the newsletter article, the 150-month period is related to a longer 393-month turning point pattern by virtue of the Fibonacci ratio. Multiply 150 times 2.618 and you get 393. Alternatively, if you multiply 393 by 0.382, you get 150. It works backwards and forwards.
This is all relevant at the moment because we are arriving at the 150 month anniversary of the 2002-2003 lows. The Internet bubble’s collapse led to a big decline in 2002, and to a bottom in October 2002. But worries about an impending war with Iraq kept prices down, and we got another low in March 2003. So which one do we count from?
That’s the hard question. Counting forward 150 months from October 2002 gets us to April 2015. And 150 months from March 2003 gets us to September 2015. Split the difference, and we have May to July 2015, and that’s right where we sit now.
Understand that the 150-month figure has to be taken with a tolerance of plus or minus 2 months. Life is just not as precise as we might all like. And it is not yet clear which of the bottoms in 2002-03 was the one that the market thinks is the right one from which to count forward. We’ll know for sure in a few months, but for now we have to allow for either possibility.
Expecting a major top in 2015 fits well with the leading indication from the eurodollar Commitment of Traders data, as I discussed in the May 7 Chart In Focus. That analysis says that the top should be in early August, but there can be a little bit of wiggle room. Watching for the more precise topping indications is something we will be taking up in both our twice monthly McClellan Market Report and in our Daily Edition.
Tom McClellan
Editor, The McClellan Market Report"
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Bund Spread Gives Permission for Bear Market - Free Weekly Technical Analysis Chart - McClellan Financial
German government bonds are known in the industry as “Bunds”, a contraction of the prefix “bundes” which is German for “federal”. At the major stock market tops in 2000 and 2007, we saw the peak in the 10-year Bund-Treasury spread appear well in advance of the final price tops for stocks. So because that spread was still rising in April 2014, my supposition then was that the uptrend had more months to live.
Now we see a different condition. The Bund-Treasury spread peaked at 1.81 percentage points back in March 2015, and has since been contracting. Meanwhile, the DJIA and SP500 kept on rising to incrementally higher price highs as the summer wore on, eventually breaking down with the August 2015 minicrash.
I spelled out the logic of why this yield spread indication works in that prior article. I encourage you to go back and reread it. But the summary is that when investors’ willingness to accept risk is starting to wane, that is a setup for a bear market for stock prices.
With a divergence now in place between the DJIA and the Bund-Treasury spread, we can have a reasonable expectation that a bear market for stock prices should ensue. If it plays out like the last two, the bear market should last until the Bund-Treasury spread gets back down at least to parity, or preferably even lower. That could take a while; in the 2000 and 2007 examples, it took a couple of years. The eurodollar COT leading indication already tells us to expect a downward trend until April 2016, so that gives us at least several months to see how the Bund-Treasury spread behaves.
Tom McClellan
Editor, The McClellan Market Report"
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Shipping Confidence Levels Rise to 2015
Shipping Confidence Levels Rise to 2015: "Overall confidence levels in the shipping industry rose in the three months ended August 2015 to their highest level this year, according to the latest Shipping Confidence Survey from international accountant and shipping adviser Moore Stephens. Respondents to the survey were concerned predominantly about low freight rates and overtonnaging, with continuing doubts also expressed about private equity funding.
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Should you ignore or explore the Dow Theory sell signal? - MarketWatch
Just recently, the three Dow Jones Averages (Industrial, Transport, Utility) did something they haven't done since October 2008. All three dropped to new 52-week lows almost at the same time (Aug. 24 for the Industrials and Transports, Sept. 4 for the Utilities).
That's a pretty rare event. In fact, it has happened only four times in the past 25 years.
The chart below marks all unanimous new 52-week lows with a thin blue-dashed line. The dates were September 2001, October 2002, October 2008 and September 2015."
Please note that all sell signals occurred in either September or October (more about that later).
October 2008 was not the most opportune time to buy, although buying worked out better for buy-and hold investors than selling. The September 2001 and October 2002 sell signals were just plain wrong. They occurred within days of fairly significant lows.
According to data from SentimenTrader, there were 14 similar sell signals from 1930-1990. Six months later, the Dow Jones Industrials traded higher nine of 14 times.
If you come across a research piece highlighting the validity of the recent Dow Theory sell signal, you may be better off ignoring it than exploring it. Now may not be the time to rely on the “bell bottom” of market guides.
Perhaps the most important message of the above chart is that some of the best buying opportunities occurred in September or October.
Could this September/October be the same, or will this year be more like 2007?
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U.S. growth raised to 3.9% in second quarter, GDP report shows - MarketWatch
Consumer purchases jumped 3.6%, up from a prior estimate of 3.1%. Americans spent more on services such as health care and transportation.
Businesses also invested more in structures such as office buildings and plants than the government initially reported.
Investment on structures, for instance, rose 6.2%, double the earlier estimate. Outlays on equipment also rose slightly instead of declining. And spending for home construction climbed 9.3% instead of 7.8%.
Most other figures in the revised GDP report were little changed. Exports rose 5.1% while imports edged up 3%. The value of inventories increased by $113.5 billion. And Inflation as measured by the PCE price index rose at a 2.2% annual rate.
Despite a livelier spring, economists expect growth to slow in the soon-to-end third quarter. The U.S. is likely to expand at a milder 2.5% pace from July through September, according to economists surveyed by MarketWatch. They point to weaker business spending and a strong dollar that continues to constrain U.S. exports.
Furthermore, an alternative measure of the economy called gross domestic income grew a meager 0.7% in the second quarter. The government says averaging GDI and GDP together results in 2.3% growth.
A newfound concern is an economic slowdown in China that’s rattled stock markets all around the world, a threat scary enough to prompt the Federal Reserve to delay a long-expected increase in a key U.S. interest rate."
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Volkswagen's worst week ever: Winners and losers
Volkswagen
The company, once the shining example of Germany's economic prowess, is feeling the pain on many fronts:
Financial: It will set aside $7.3 billion in its third-quarter accounts to help cover the costs of the scandal. Fines are expected to add up to $18 billion, while almost $17 billion was wiped off VW's share price on Monday alone. Shares were up on Thursday but are still down about 24 percent from where they traded on last week before the scandal broke.
Personal: Martin Winterkorn stepped down on Wednesday as CEO, saying the firm needed a "fresh start." The company is expected to announce a successor on Friday – along with the names of those responsible for the scandal.
Brand damage: Having made some of Europe's most popular cars, the Volkswagen brand is now under fire. "This is a sad tumble for the company that was named one of the top global brands in 2014," Marianne Griebler, a marketing communications consultant, wrote on LinkedIn this week. "It's not enough to tell a good story. You have to make it real for your customers. And that's why Volkswagen hasn't just put a few dings in their brand; they may have totaled it."
The Volkswagen Golf was Germany's favorite car last year, measured by new passenger vehicle registrations. Volkswagen overtook Toyota as the world's biggest car maker by sales in the first half of the year, according to data from the car firms.
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‘Flash crash trader’ faces extradition to US
‘Flash crash trader’ faces extradition to US: ""If I am short I want to spoof it [the market] down, so I will place join offer orders," he is supposed to have written in a February 2009 email. "I want to put these join offer orders in the system much like a normal order but they are only seen when the market bid is taken out, or when the market goes offered.""
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Thursday, September 24, 2015
BlackRock sees good deals in China property
BlackRock sees good deals in China property: "For years, property was flagged as China's biggest risk but amid the country's apparent economic malaise and financial market unpredictability, property now offers opportunities for selective investors.
John Saunders, managing director and head of Asia-Pacific real estate at BlackRock, told CNBC on Thursday that Beijing's transition to service sector growth was a healthy catalyst for commercial real-estate.
"Now is the time to be looking" he said, pointing to high-quality office, retail and logistics assets in tier-1 cities including Beijing and Shanghai.
"We have already started to see more keen sellers in China and I think there will be buying opportunities as the conditions from China's old economy get less favorable."
It's not just commercial real-estate looking attractive; recent data increasingly reflects a revived residential market.
In the first eight months of the year, nationwide sales of new residential properties [excluding government-funded affordable housing] increased 18.7 percent on-year, higher than the 16.8 percent increase seen over the first seven months, according to the National Bureau of Statistics last week."
Moreover, existing home sales across 32 cities grew by a further 22.2 percent on year in the first three weeks of September, Barclays noted this week, saying the increase bodes well for ongoing sales improvement despite high stock market volatility.
The bank believes October and November will be the best sales months of the year as developers start to launch more new projects.
Also commenting on the numbers, asset manager AllianceBernstein (AB) said in a recent note: "They [the data] point to a true market-based correction brought about by rising demand and a relative scarcity of supply."
"They reflect a fall in housing inventory and the fact that developers--still nervous after the equities crash and last month's currency devaluation--are not rushing to build," AB added.
Whilst the property sector isn't immune to a general economic downturn, it's unlikely to suffer greatly, according to commentators.
Read MoreSnowbirds a rare bright spot in China property market
"While a slowdown in China's economy will weaken consumers' purchasing power, the impact on the property market should be manageable because the government's easing of monetary policy to support the economy should support property sales," Moody's Investors Service explained in a recent note.
The People's Bank of China (PBoC) cut interest rates four times in the first eight months of the year.
Markets are, however, ignoring these positive signals [from the property market] and underestimating the potential for a spillover of optimistic sentiment from the housing sector into the rest of the economy, AB continued.
Indeed, fears of a deepening downturn seem to be dominating sentiment on the world's second-largest economy. Data this week showed a preliminary unofficial reading of factory activity falling to a more than six-year low and investment banks have been slashing gross domestic product (GDP) forecasts.
Barclays said this week that it now expects 2015 annual GDP at 6.6 percent, down from earlier forecasts for 6.8 percent.
'via Blog this'
John Saunders, managing director and head of Asia-Pacific real estate at BlackRock, told CNBC on Thursday that Beijing's transition to service sector growth was a healthy catalyst for commercial real-estate.
"Now is the time to be looking" he said, pointing to high-quality office, retail and logistics assets in tier-1 cities including Beijing and Shanghai.
"We have already started to see more keen sellers in China and I think there will be buying opportunities as the conditions from China's old economy get less favorable."
It's not just commercial real-estate looking attractive; recent data increasingly reflects a revived residential market.
In the first eight months of the year, nationwide sales of new residential properties [excluding government-funded affordable housing] increased 18.7 percent on-year, higher than the 16.8 percent increase seen over the first seven months, according to the National Bureau of Statistics last week."
Moreover, existing home sales across 32 cities grew by a further 22.2 percent on year in the first three weeks of September, Barclays noted this week, saying the increase bodes well for ongoing sales improvement despite high stock market volatility.
The bank believes October and November will be the best sales months of the year as developers start to launch more new projects.
Also commenting on the numbers, asset manager AllianceBernstein (AB) said in a recent note: "They [the data] point to a true market-based correction brought about by rising demand and a relative scarcity of supply."
"They reflect a fall in housing inventory and the fact that developers--still nervous after the equities crash and last month's currency devaluation--are not rushing to build," AB added.
Whilst the property sector isn't immune to a general economic downturn, it's unlikely to suffer greatly, according to commentators.
Read MoreSnowbirds a rare bright spot in China property market
"While a slowdown in China's economy will weaken consumers' purchasing power, the impact on the property market should be manageable because the government's easing of monetary policy to support the economy should support property sales," Moody's Investors Service explained in a recent note.
The People's Bank of China (PBoC) cut interest rates four times in the first eight months of the year.
Markets are, however, ignoring these positive signals [from the property market] and underestimating the potential for a spillover of optimistic sentiment from the housing sector into the rest of the economy, AB continued.
Indeed, fears of a deepening downturn seem to be dominating sentiment on the world's second-largest economy. Data this week showed a preliminary unofficial reading of factory activity falling to a more than six-year low and investment banks have been slashing gross domestic product (GDP) forecasts.
Barclays said this week that it now expects 2015 annual GDP at 6.6 percent, down from earlier forecasts for 6.8 percent.
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Something has changed in the gold trade: Gartman
Something has changed in the gold trade: Gartman: "
Stocks pain has turned into gold's gain.
Gold prices soared to a one-month high Thursday as fears of a global slowdown have investors seeking so-called safe haven assets like bonds and bullion. And according to Dennis Gartman, often referred to as the "commodities king," the rally in gold could just be starting.
"There's a real strength in the gold market when you look at it in non-U.S. dollar terms," the publisher of The Gartman Letter said Thursday in an interview with CNBC's "Futures Now." "The difference is enormous."
Read MoreHere's my Fed commodity trade: Jim Iuorio
While everyone focuses on gold's move relative to the dollar, Gartman says the real story is what's happening around the world. Pointing to gold priced in euros and yen specifically, the CNBC contributor said that bullion has actually been outperforming. As he noted, in euro terms, gold is up 4.6 percent in the past two years and 6.7 percent over the past five years. Whereas related to the yen, it's up 4.8 percent for two years and 26.4 percent in five years.
Gold priced in the U.S. dollar, however, has failed to maintain its footing in recent months, having fallen 12 percent from its late January high and now tracking for its worst quarterly losing streak since 1997.
"[It's] been in a phenomenal, unending, malevolent bear market since November 2011," Gartman noted. Since that time, gold has fallen nearly 35 percent. "If you have owned gold in dollar terms it has been a terrifyingly bad trade."
Read MoreCommodities pain spreading, Caterpillar retrenches
For Gartman, owning gold relative to foreign currencies should be a no-brainer. "Why would you want to fund gold in a currency that has been strong when you can fund it in a currency that has been weak?" he asked. "Monetary authorities in Europe and Japan have been far more dovish [than the Fed] and will continue to be far more dovish."
He believes gold could also benefit as the Federal Reserve further retreats from raising rates. "I'm neutral gold in terms of the dollar and long in other currencies," Gartman added."
'via Blog this'
Stocks pain has turned into gold's gain.
Gold prices soared to a one-month high Thursday as fears of a global slowdown have investors seeking so-called safe haven assets like bonds and bullion. And according to Dennis Gartman, often referred to as the "commodities king," the rally in gold could just be starting.
"There's a real strength in the gold market when you look at it in non-U.S. dollar terms," the publisher of The Gartman Letter said Thursday in an interview with CNBC's "Futures Now." "The difference is enormous."
Read MoreHere's my Fed commodity trade: Jim Iuorio
While everyone focuses on gold's move relative to the dollar, Gartman says the real story is what's happening around the world. Pointing to gold priced in euros and yen specifically, the CNBC contributor said that bullion has actually been outperforming. As he noted, in euro terms, gold is up 4.6 percent in the past two years and 6.7 percent over the past five years. Whereas related to the yen, it's up 4.8 percent for two years and 26.4 percent in five years.
Gold priced in the U.S. dollar, however, has failed to maintain its footing in recent months, having fallen 12 percent from its late January high and now tracking for its worst quarterly losing streak since 1997.
"[It's] been in a phenomenal, unending, malevolent bear market since November 2011," Gartman noted. Since that time, gold has fallen nearly 35 percent. "If you have owned gold in dollar terms it has been a terrifyingly bad trade."
Read MoreCommodities pain spreading, Caterpillar retrenches
For Gartman, owning gold relative to foreign currencies should be a no-brainer. "Why would you want to fund gold in a currency that has been strong when you can fund it in a currency that has been weak?" he asked. "Monetary authorities in Europe and Japan have been far more dovish [than the Fed] and will continue to be far more dovish."
He believes gold could also benefit as the Federal Reserve further retreats from raising rates. "I'm neutral gold in terms of the dollar and long in other currencies," Gartman added."
'via Blog this'
Wednesday, September 23, 2015
DJ 4 Tasty Stocks to Feed Your Portfolio -- Barron's Asia - ShareInvestor.com
DJ 4 Tasty Stocks to Feed Your Portfolio -- Barron's Asia - ShareInvestor.com: "Among the 70 stocks Nomura says are the biggest potential beneficiaries of higher food prices is Singapore-listed palm oil producer First Resources (ticker: EB5.SG). Palm oil doubles as cooking fuel and edible oil, not to mention making cameos in myriad consumer products. Yet First Resources is trading at a significant discount to its long-term average price-to-book value ratio. Nomura's analysts predict First Resources' earnings will grow by more than 20% in its current fiscal year and see its stock climbing by more than 50%."
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Palm oil price to rally as haze envelops Southeast Asia
Palm oil price to rally as haze envelops Southeast Asia: "Futures on the Bursa Malaysia Derivatives Exchange shot up to a one-week high of about $508 a metric ton on Wednesday, a sharp turnaround from a six-year low of $426 plumbed in late August. Bursa Malaysia is the world's biggest palm oil futures trading hub."
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Warren Buffett to heirs: Put my estate in index funds - MarketWatch
Warren Buffett to heirs: Put my estate in index funds - MarketWatch: "My advice to the trustee couldn't be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard's.) I believe the trust's long-term results from this policy will be superior to those attained by most investors — whether pension funds, institutions or individuals — who employ high-fee managers."
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The bull market in stocks is not dead - MarketWatch
“A bull market goes through legs and corrections, and we were overdue for this correction,” he told me in an interview. But once bull markets survive their first four stages, it’s extremely rare for them not to continue into the fifth, he said."
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PayPal Exec Calls for End of Passwords - Mobile ID World
PayPal Exec Calls for End of Passwords - Mobile ID World: "PayPal’s Technology Evangelist and Senior Policy Advisor, Bill Smith, has written a new essay calling for the end of the password. While he certainly isn’t the first to do so, Smith brings together a number of recent trends and developments to show how the time is ripe to move on to more advanced and easy-to-use security systems.
Smith highlights biometrics as the major security solution to replacing the password. He credits Apple’s Touch ID with helping to popularize biometric authentication in the mass market – much to his credit, given that his employer is a major rival to Apple in the mPayments space, where powerful digital authentication is badly needed for transaction authorization. Indeed, Touch ID has led numerous other competitors to integrate fingerprint scanners and other forms of biometric authentication into their own mobile devices, with fingerprint sensors now more-or-less standard features on new mid- and upper-range mobile devices.
Smith also points to the important work of the FIDO Alliance, which has helped to establish authentication standards that are relevant to today’s technology. He asserts that FIDO has worked with major industry players to develop advanced security specifications that enable the implementation of “easy-to-use, secure, and privacy respecting mechanisms for authenticating users,” and he applauds additional requirements for “local authentication, no biometric data on the wire, no protocol artifacts that can be used for cross correlation, and asymmetric encryption.”
Going forward he argues that the early adopters implementing these standards now will have a first-to-market advantage later, given their “deployment experience and the ability to rapidly switch from password to password-less.” It’s an encouraging prediction for companies trying to kill the password today, and it’s well worth reading the full essay at CircleID."
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Smith highlights biometrics as the major security solution to replacing the password. He credits Apple’s Touch ID with helping to popularize biometric authentication in the mass market – much to his credit, given that his employer is a major rival to Apple in the mPayments space, where powerful digital authentication is badly needed for transaction authorization. Indeed, Touch ID has led numerous other competitors to integrate fingerprint scanners and other forms of biometric authentication into their own mobile devices, with fingerprint sensors now more-or-less standard features on new mid- and upper-range mobile devices.
Smith also points to the important work of the FIDO Alliance, which has helped to establish authentication standards that are relevant to today’s technology. He asserts that FIDO has worked with major industry players to develop advanced security specifications that enable the implementation of “easy-to-use, secure, and privacy respecting mechanisms for authenticating users,” and he applauds additional requirements for “local authentication, no biometric data on the wire, no protocol artifacts that can be used for cross correlation, and asymmetric encryption.”
Going forward he argues that the early adopters implementing these standards now will have a first-to-market advantage later, given their “deployment experience and the ability to rapidly switch from password to password-less.” It’s an encouraging prediction for companies trying to kill the password today, and it’s well worth reading the full essay at CircleID."
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Tuesday, September 22, 2015
Flash China Caixin PMI falls to 47 in September, a 6-1/2-year low
Flash China Caixin PMI falls to 47 in September, a 6-1/2-year low: "The preliminary Caixin China manufacturing purchasing managers' index (PMI) fell to a six-and-a-half-year low of 47.0 in September, below the 47.5 forecast in a Reuters poll.
This compares with a final reading of 47.3 in August, the lowest since March 2009. A print above 50 indicates an expansion in activity while one below points to a contraction.
The closely-watched gauge of nationwide manufacturing activity focuses on smaller and medium-sized companies, filling a niche that isn't covered by the official data."
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This compares with a final reading of 47.3 in August, the lowest since March 2009. A print above 50 indicates an expansion in activity while one below points to a contraction.
The closely-watched gauge of nationwide manufacturing activity focuses on smaller and medium-sized companies, filling a niche that isn't covered by the official data."
'via Blog this'
SIA Engineering: 3 Things I Learned from its 2015 AGM
SIA Engineering: 3 Things I Learned from its 2015 AGM: "#1 The MRO industry is facing headwind
In January, SIA Engineering welcomed a new CEO, Png Kim Chiang, whose track record boasts three decades of experience in the MRO industry. Png started his speech at the AGM by sharing some of the major challenges faced by SIA Engineering in the MRO industry.
The 4 key challenges in the aircraft MRO industry:
Technological advancement and the new batch of commercial aircraft like the Airbus A350 and Boeing 787 require less maintenance than older fleets. This technological advancement is a structural change in the industry. As technology progresses, aircraft spend less time in maintenance and maintenance fees go down which will affect SIA Engineering. At the same time, SIA Engineering must build up new capabilities to handle and maintain the newer aircraft.As chairman Stephen Lee pointed out: “In the future we expect less aircraft visits to the hangar and the stay in the hanger for each visit will be shorter.”
Older aircraft like the Boeing 747 and Airbus A330 typically require more maintenance. However, these fleets are gradually being phased out by airlines as the costs of maintaining them are relatively higher. The reduction in heavy overhauls (column D) has sent SIA Engineering’s repair and overhaul unit into losses of $14.3 million compared to profits of $32.4 million in the previous year.
Number of aircraft & component service checks. Source: SIA Engineering
Another example: SilkAir has moved on to the newer Boeing 737 and phased out the older A320. Subsequently, SilkAir’s recent contract renewal with SIA Enginnering was $197 million – a 30% drop compared to the $300 million contract signed five years ago.
Both aircraft OEMs like Boeing and component OEMs are entering the after-sales market and this increases the competition in the MRO industry.
Aircraft fleet size in Asia Pacific is expected to double by 2025 and this will attract more competitors into the MRO industry, although this is somewhat mitigated in my next point.
#2 MRO companies must be authorized maintenance partners
SIA Engineering’s tie-up with Boeing is an example of partnering with OEMs. SIA Engineering no longer go directly to its parent company, Singapore Airlines (which contributes 50% of SIA Engineering’s revenue in 2014/15), for direct maintenance services; Boeing is now the intermediary between the two entities. Because of this SIA Engineering has to share a portion of its profits with OEMs like Boeing moving forward.
However, should SIA Engineering successfully adapt themselves to this new challenge, the company is likely to be remain profitable as this new environment erects a barrier to entry and reduces a number of MRO players. According to the chairman this transition will take around two to three years.
#3 SIA Engineering’s line maintenance profit grew to $98 million
This figure grew from $83 million the previous year. Line maintenance contributed close to 48% of SIA Engineering’s total profit before tax. The main reason is because SIA Engineering has a near-monopoly on line maintenance business in Singapore."
'via Blog this'
In January, SIA Engineering welcomed a new CEO, Png Kim Chiang, whose track record boasts three decades of experience in the MRO industry. Png started his speech at the AGM by sharing some of the major challenges faced by SIA Engineering in the MRO industry.
The 4 key challenges in the aircraft MRO industry:
Technological advancement and the new batch of commercial aircraft like the Airbus A350 and Boeing 787 require less maintenance than older fleets. This technological advancement is a structural change in the industry. As technology progresses, aircraft spend less time in maintenance and maintenance fees go down which will affect SIA Engineering. At the same time, SIA Engineering must build up new capabilities to handle and maintain the newer aircraft.As chairman Stephen Lee pointed out: “In the future we expect less aircraft visits to the hangar and the stay in the hanger for each visit will be shorter.”
Older aircraft like the Boeing 747 and Airbus A330 typically require more maintenance. However, these fleets are gradually being phased out by airlines as the costs of maintaining them are relatively higher. The reduction in heavy overhauls (column D) has sent SIA Engineering’s repair and overhaul unit into losses of $14.3 million compared to profits of $32.4 million in the previous year.
Number of aircraft & component service checks. Source: SIA Engineering
Another example: SilkAir has moved on to the newer Boeing 737 and phased out the older A320. Subsequently, SilkAir’s recent contract renewal with SIA Enginnering was $197 million – a 30% drop compared to the $300 million contract signed five years ago.
Both aircraft OEMs like Boeing and component OEMs are entering the after-sales market and this increases the competition in the MRO industry.
Aircraft fleet size in Asia Pacific is expected to double by 2025 and this will attract more competitors into the MRO industry, although this is somewhat mitigated in my next point.
#2 MRO companies must be authorized maintenance partners
SIA Engineering’s tie-up with Boeing is an example of partnering with OEMs. SIA Engineering no longer go directly to its parent company, Singapore Airlines (which contributes 50% of SIA Engineering’s revenue in 2014/15), for direct maintenance services; Boeing is now the intermediary between the two entities. Because of this SIA Engineering has to share a portion of its profits with OEMs like Boeing moving forward.
However, should SIA Engineering successfully adapt themselves to this new challenge, the company is likely to be remain profitable as this new environment erects a barrier to entry and reduces a number of MRO players. According to the chairman this transition will take around two to three years.
#3 SIA Engineering’s line maintenance profit grew to $98 million
This figure grew from $83 million the previous year. Line maintenance contributed close to 48% of SIA Engineering’s total profit before tax. The main reason is because SIA Engineering has a near-monopoly on line maintenance business in Singapore."
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Monday, September 21, 2015
Oil ends higher on bets for further output declines - MarketWatch
Oil ends higher on bets for further output declines - MarketWatch: "“While many [traders] are still focused on an oil glut, we may start to see that go away as production in the U.S. and some other producers are falling and [the Organization of the Petroleum Exporting Countries] is near capacity,” said Phil Flynn, senior market analyst at Price Futures Group, in a note.
According to Richard Hastings, macro strategist at Global Hunter Securities, production may decline even more than is understood because the U.S. has a ban on oil exports. “There is nothing holding it [output] in place,” he said. Read: House plans vote on bill to lift ban on oil exports"
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According to Richard Hastings, macro strategist at Global Hunter Securities, production may decline even more than is understood because the U.S. has a ban on oil exports. “There is nothing holding it [output] in place,” he said. Read: House plans vote on bill to lift ban on oil exports"
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Why the Fed is driving gold prices higher - MarketWatch
McDonald, author of “A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers,” is worth listening to because he has made several good trading calls on gold in the past few years.
Five gold-mining stocks I mention at the end of this column might advance even more, compared with the tamer blend of stocks inside the Market Vectors Gold Miners ETF. But stocks are riskier than ETFs because they can fall more, too.
To see why gold and gold miners will move up from here, you need to know two important concepts:
. When the Fed raises rates, the dollar is driven higher because foreign investors are drawn to U.S. assets. They’re chasing higher interest rates and the more robust economic conditions that causes the Fed to hike rates. They have to buy greenbacks, which pushes the dollar higher. In contrast, the dollar is weakened when the Fed signals it will delay rate hikes. That’s where we are now.
. The dollar and gold have a natural inverse relationship. Dollar down, gold up.
McDonald is bearish on the dollar because of trends blocking the Fed from raising rates, obstacles readily acknowledged by Federal Reserve Chairwoman Janet Yellen in the press conference following Thursday’s FOMC meeting. During that meeting, the committee decided to hold off on raising rates, as McDonald predicted.
Reason 1: The Fed has a dollar problem
In anticipation of rising U.S. interest rates, investors have driven the dollar much higher. The greenback rose 25% from July 2014 through April of this year, and it is still lofty.
That creates enormous headaches for the Federal Reserve. It hurts U.S. growth because exports from U.S. companies become more expensive. It also makes imports cheaper.
A strong dollar also damages emerging-market economies since many of them make money by selling commodities, which get hurt by a strong dollar. This is also bad news for the Fed. “The dollar has been a global wrecking ball,” says McDonald. “My theory is the Fed is terrified of the dollar’s move, and they have to talk the dollar down to $85 to put out this fire. That’s really good for gold.” That $85 forecast refers to the U.S. Dollar Index.
Reason 2: The Fed has a broader mandate now
Technically, the Fed is responsible for two things: Full unemployment and reasonably low inflation. In today’s interconnected world, though, the Fed has more things to worry about:
A slowdown in China? Check. Its spills over into other emerging markets and the U.S., bringing down our economy. “Global weakness and the dollar wrecking ball have hurt the U.S. economy. And that is changing Fed policy to the benefit of gold miners,” says McDonald.
Stock market selloffs like the one we just saw? Check. Selloffs are a downer for the economy. People feel less wealthy and more fearful. Both weigh on exuberance and economic growth.
In Yellen-speak, the Fed has lots of “crosscurrents” to consider. “We need to put it all together in a picture,” she said during the press conference. The big picture is that there are too many problems to raise rates. Weak dollar, strong gold.
Reason 3: The Fed just got a lot more dovish
This week we learned that FOMC members are a lot less bullish on U.S. growth and inflation, thanks to the threat of a global slowdown and the recent market turmoil. Here are three main pieces of evidence:
The number of FOMC members expecting a Fed rate hike in 2016 slipped to 13 from 15 out of 17.
The Fed pushed out the time frame for targeted 2% inflation to 2018, from 2017 projected last June, a significant change. “Inflation will remain quite low in the coming months,” said Yellen.
The FOMC forecast for year-end 2016 interest rates slipped to 1.375% from 1.625% in June. “That is a big shift,” says McDonald.
We also learned that one FOMC member even advocates negative interest rates to spur growth, which would be a very unusual Fed policy. It’s an alarming point of view. Yellen said in the press conference the FOMC didn’t seriously entertain that suggestion. But the fact that it was even brought up is a bit troubling. Yellen also made it clear that even after the first rate hike — whenever it happens — monetary policy will remain quite accommodative.
Reason 4: The Fed has an election problem
Consensus forecasts have shifted to a Fed rate hike in December. But that’s not going to happen for at least two reasons.
First, Fed rate hikes can slow the economy with six-month lag. Does Yellen, appointed by President Barack Obama, really want to risk slowing the economy during the summer of 2016, thereby hurting the prospects of the Democratic presidential candidate? The Fed is supposedly apolitical. But let’s be honest, it’s not.
Next, raising rates during the holiday season just looks Grinchy.
Finally, by mid-December, lots of investors will have locked down accounts for the year, drying up liquidity. Does the Fed really want to do something as disruptive as raising rates during a time of limited liquidity, which can heighten volatility? Take a wild guess.
Reason 5: Being long the dollar is a crowded trade
By now, every Wall Street money manager and her uncle has piled into the long dollar trade. “There are a lot of people on the wrong side of the trade, and that means it will take weeks to unwind,” says McDonald. Last March, when investors realized the Fed was pushing back the timing on rate hikes, the dollar took a dive and stayed weak through May.
In short, so many people are long the dollar, there could be a sustained move down in the greenback, as these punters back away from the trade. That means there may be a sustained up move in gold.
Stocks to consider, and a warning
Besides the GDX, five gold miners to consider as trades on this theme are: Barrick Gold Corp. ABX, -0.30% Yamana Gold Inc. AUY, +1.71% Agnico Eagle Mines Ltd. AEM, +0.16% AngloGold Ashanti Ltd. AU, +0.24% and Goldcorp Inc. GG, -0.67% (GG). Those look cheap and relatively safe, because they all are rated five or four stars by analysts at Morningstar. If you do go long gold and gold miners, remember: Don’t get greedy. This is not a Warren Buffett-style buy-and-hold trade. Sooner or later, investors will inevitably start worrying about Fed rate hikes again.
That will strengthen the dollar and hurt gold and gold miners.
At the time of publication, Michael Brush had no positions in any stocks mentioned in this column. Brush is a Manhattan-based financial writer who publishes the stock newsletter Brush Up on Stocks. Brush has covered business for the New York Times and The Economist group, and he attended Columbia Business School in the Knight-Bagehot program.
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Five gold-mining stocks I mention at the end of this column might advance even more, compared with the tamer blend of stocks inside the Market Vectors Gold Miners ETF. But stocks are riskier than ETFs because they can fall more, too.
To see why gold and gold miners will move up from here, you need to know two important concepts:
. When the Fed raises rates, the dollar is driven higher because foreign investors are drawn to U.S. assets. They’re chasing higher interest rates and the more robust economic conditions that causes the Fed to hike rates. They have to buy greenbacks, which pushes the dollar higher. In contrast, the dollar is weakened when the Fed signals it will delay rate hikes. That’s where we are now.
. The dollar and gold have a natural inverse relationship. Dollar down, gold up.
McDonald is bearish on the dollar because of trends blocking the Fed from raising rates, obstacles readily acknowledged by Federal Reserve Chairwoman Janet Yellen in the press conference following Thursday’s FOMC meeting. During that meeting, the committee decided to hold off on raising rates, as McDonald predicted.
Reason 1: The Fed has a dollar problem
In anticipation of rising U.S. interest rates, investors have driven the dollar much higher. The greenback rose 25% from July 2014 through April of this year, and it is still lofty.
That creates enormous headaches for the Federal Reserve. It hurts U.S. growth because exports from U.S. companies become more expensive. It also makes imports cheaper.
A strong dollar also damages emerging-market economies since many of them make money by selling commodities, which get hurt by a strong dollar. This is also bad news for the Fed. “The dollar has been a global wrecking ball,” says McDonald. “My theory is the Fed is terrified of the dollar’s move, and they have to talk the dollar down to $85 to put out this fire. That’s really good for gold.” That $85 forecast refers to the U.S. Dollar Index.
Reason 2: The Fed has a broader mandate now
Technically, the Fed is responsible for two things: Full unemployment and reasonably low inflation. In today’s interconnected world, though, the Fed has more things to worry about:
A slowdown in China? Check. Its spills over into other emerging markets and the U.S., bringing down our economy. “Global weakness and the dollar wrecking ball have hurt the U.S. economy. And that is changing Fed policy to the benefit of gold miners,” says McDonald.
Stock market selloffs like the one we just saw? Check. Selloffs are a downer for the economy. People feel less wealthy and more fearful. Both weigh on exuberance and economic growth.
In Yellen-speak, the Fed has lots of “crosscurrents” to consider. “We need to put it all together in a picture,” she said during the press conference. The big picture is that there are too many problems to raise rates. Weak dollar, strong gold.
Reason 3: The Fed just got a lot more dovish
This week we learned that FOMC members are a lot less bullish on U.S. growth and inflation, thanks to the threat of a global slowdown and the recent market turmoil. Here are three main pieces of evidence:
The number of FOMC members expecting a Fed rate hike in 2016 slipped to 13 from 15 out of 17.
The Fed pushed out the time frame for targeted 2% inflation to 2018, from 2017 projected last June, a significant change. “Inflation will remain quite low in the coming months,” said Yellen.
The FOMC forecast for year-end 2016 interest rates slipped to 1.375% from 1.625% in June. “That is a big shift,” says McDonald.
We also learned that one FOMC member even advocates negative interest rates to spur growth, which would be a very unusual Fed policy. It’s an alarming point of view. Yellen said in the press conference the FOMC didn’t seriously entertain that suggestion. But the fact that it was even brought up is a bit troubling. Yellen also made it clear that even after the first rate hike — whenever it happens — monetary policy will remain quite accommodative.
Reason 4: The Fed has an election problem
Consensus forecasts have shifted to a Fed rate hike in December. But that’s not going to happen for at least two reasons.
First, Fed rate hikes can slow the economy with six-month lag. Does Yellen, appointed by President Barack Obama, really want to risk slowing the economy during the summer of 2016, thereby hurting the prospects of the Democratic presidential candidate? The Fed is supposedly apolitical. But let’s be honest, it’s not.
Next, raising rates during the holiday season just looks Grinchy.
Finally, by mid-December, lots of investors will have locked down accounts for the year, drying up liquidity. Does the Fed really want to do something as disruptive as raising rates during a time of limited liquidity, which can heighten volatility? Take a wild guess.
Reason 5: Being long the dollar is a crowded trade
By now, every Wall Street money manager and her uncle has piled into the long dollar trade. “There are a lot of people on the wrong side of the trade, and that means it will take weeks to unwind,” says McDonald. Last March, when investors realized the Fed was pushing back the timing on rate hikes, the dollar took a dive and stayed weak through May.
In short, so many people are long the dollar, there could be a sustained move down in the greenback, as these punters back away from the trade. That means there may be a sustained up move in gold.
Stocks to consider, and a warning
Besides the GDX, five gold miners to consider as trades on this theme are: Barrick Gold Corp. ABX, -0.30% Yamana Gold Inc. AUY, +1.71% Agnico Eagle Mines Ltd. AEM, +0.16% AngloGold Ashanti Ltd. AU, +0.24% and Goldcorp Inc. GG, -0.67% (GG). Those look cheap and relatively safe, because they all are rated five or four stars by analysts at Morningstar. If you do go long gold and gold miners, remember: Don’t get greedy. This is not a Warren Buffett-style buy-and-hold trade. Sooner or later, investors will inevitably start worrying about Fed rate hikes again.
That will strengthen the dollar and hurt gold and gold miners.
At the time of publication, Michael Brush had no positions in any stocks mentioned in this column. Brush is a Manhattan-based financial writer who publishes the stock newsletter Brush Up on Stocks. Brush has covered business for the New York Times and The Economist group, and he attended Columbia Business School in the Knight-Bagehot program.
'via Blog this'
Singapore’s Big Winner this Week: SMRT Corporation Ltd | The Motley Fool Singapore
Singapore’s Big Winner this Week: SMRT Corporation Ltd | The Motley Fool Singapore:
On 17 September, SMRT’s shares went up 6.9%. This led stock market regulator, Singapore Exchange Limited (SGX: S68), to issue a query to get an explanation over the “unusual” price movements in its shares. In its reply, the transport outfit said that it is unaware of any information not previously announced concerning the firm, which might explain the trading. It went on to add that it will “make the necessary disclosures (if any) at the appropriate time”.
The next day, the firm announced that it had appointed Mr Colin Lim Fung Wan as the Managing Director of SMRT Services. He will look after the rail-related technical services and support functions on our shores and also overseas.
In a separate announcement on the same day, SMRT made public that it had incorporated two wholly-owned indirect subsidiaries here. They are SMRT Advertising & Properties Pte Ltd and The X Collective Pte Ltd.
SMRT Advertising & Properties is involved in “advertising activities and real estate activities with owned or leased property within the public transport network”, while The X Collective does “marketing and leasing of commercial spaces, retail management and operations, advertising and marketing, and digital and e-commerce”.
SMRT is currently trading at 23 times its historical earnings per share and has a dividend yield of 2.4%.
'via Blog this'
On 17 September, SMRT’s shares went up 6.9%. This led stock market regulator, Singapore Exchange Limited (SGX: S68), to issue a query to get an explanation over the “unusual” price movements in its shares. In its reply, the transport outfit said that it is unaware of any information not previously announced concerning the firm, which might explain the trading. It went on to add that it will “make the necessary disclosures (if any) at the appropriate time”.
The next day, the firm announced that it had appointed Mr Colin Lim Fung Wan as the Managing Director of SMRT Services. He will look after the rail-related technical services and support functions on our shores and also overseas.
In a separate announcement on the same day, SMRT made public that it had incorporated two wholly-owned indirect subsidiaries here. They are SMRT Advertising & Properties Pte Ltd and The X Collective Pte Ltd.
SMRT Advertising & Properties is involved in “advertising activities and real estate activities with owned or leased property within the public transport network”, while The X Collective does “marketing and leasing of commercial spaces, retail management and operations, advertising and marketing, and digital and e-commerce”.
SMRT is currently trading at 23 times its historical earnings per share and has a dividend yield of 2.4%.
'via Blog this'
The Real Reasons Yellen Didn't Raise Rates--by Martin Weiss
Fed Chairman Yellen says the Fed didn't raise interest rates last Thursday primarily because of low inflation and turbulence overseas (i.e. China).
But behind what she says, there's a heck of a lot more going on that she would never say:
- She realizes the U.S. economy is a lot weaker than the Fed is letting on.
- She's worried about making the financial and political turmoil in Europe and the Middle East even worse, with major spillover effects on the U.S.
- She doesn't want to make the U.S. dollar even stronger — and the U.S. even less competitive — especially on the heels of the greenback's biggest winning streak since 1984.
- She's aware of the fact that, as rates rise, the interest costs will rise for heavily indebted governments in Western Europe, Japan and the U.S., leading to a new, larger sovereign-debt crisis.
Plus, most important, she's terrified of the ...
Two Elephants in the Room
The first elephant is the pervasive impact on society of over six long years of zero interest rates. Even during World War II — the greatest existential threat to our nation since Independence — the Fed didn't push rates down that far or hold them down for that long. The result has been a massive shift in the psychology, the strategy and the portfolios of millions of investors, corporations and consumers:
Investors who have shifted, en masse, from safe-haven investments to risk assets ...
Businesses who have borrowed heavily by floating trillions of dollars in new junk bonds, and ...
Consumers who have drained their savings to new lows and favored floating-rate debts like never before.
All because of zero interest rates! All creating rows of dominoes that are potentially very vulnerable to any rate hike!
The second elephant in the room is the massive amounts of new funny money the Fed has pumped into our economy since September 2008 ... and the speculative bubbles it has created.
Since 2008, we've seen the emergence of a $2.2 trillion bubble in small-cap stocks, a $1.81 trillion bubble in domestic junk bonds, and a series of even larger bubbles in other debts globally — all extremely vulnerable to higher interest rates.
I'll get to the bubbles in upcoming Money and Markets editions. Today, let me first show you — graphically and vividly — exactly where they're coming from.
This chart says it all. —>
Throughout history, the U.S. Federal Reserve almost always expanded the nation's monetary base (bank reserves and money in circulation) at a relatively steady pace.
Then, suddenly, in September 2008, the Fed began running its money printing presses like never before.
What triggered such an incredibly massive and abrupt policy change at the Fed?
Answer: The single most shocking financial failure of our era — Lehman Brothers.
But even as Fed governors sought to save the world from collapse, they discovered three things:
First, they discovered that lowering their official interest rates to zero percent, although extreme, was not enough. "What good was making money cheap," they said, "if there was no money being borrowed?" (That's when they decided to open the money floodgates.)
Second, the whole concept of "printing money" sounded too much like what Germany did after World War I, creating massive inflation. Thus, to avoid sounding like money madmen, they coined a more erudite phrase — "quantitative easing" or "QE."
Third, they realized that just one round of QE still wasn't enough. American consumers, investors and businesses got so addicted to all the new Fed funny money, they needed new shots in the arm year after year. As a result, the Fed embarked on three major rounds of QE, called QE1, QE2 and QE3.
Clearly, the day that Lehman Brothers failed, the Federal Reserve — and the entire financial world as we know it — changed dramatically.
How dramatically? Consider these facts:
Fact #1. Just from Sept. 10, 2008, through March 10, 2010, the U.S. Federal Reserve increased the nation's monetary base from $850 billion to $2.1 trillion — an insane increase of 2.5 times in just 18 months. It was, by far, the greatest monetary expansion in U.S. history.
Fact #2. Before the Lehman Brothers collapse, it had taken the Fed a total 5,012 days — 13 years and 8 months — to double the monetary base. In contrast, after the Lehman Brothers collapse, it took the Fed governors only 112 days to do so. In other words, they accelerated the pace of bank reserve expansion by a factor of 45 to 1.
Fact #3. Even in the most extreme circumstances of recent history, the Fed had never pumped in anything close to that much money in such a short period of time.
For example, before the turn of the millennium, the Fed scrambled to provide liquidity to U.S. banks to ward off a feared Y2K catastrophe, bumping up bank reserves from $557 billion on Oct. 6, 1999, to $630 billion by Jan. 12, 2000.
At the time, that sudden increase was considered unprecedented — a $73 billion in just three months. In contrast, from September 2008 through September 2015, the Fed increased the monetary base by $3,225 billion or 44 times more.
Similarly, in the days following the 9/11 terrorist attacks, the Fed had rushed to flood the banks with liquid funds, adding $40 billion through Sept. 19, 2001. But the Fed's post-Lehman flood of money has been nearly 81 times larger.
Fact #4. After the Y2K and 9/11 crises had passed, the Fed promptly reversed its money infusions and sopped up the extra liquidity from the banking system.
But in the six-plus years since the Lehman Brothers collapse, the Fed has done nothing of the kind ...
Yet!
And it's this three-letter word that contains the secret to our entire future — not only for the United States, but for the entire global economy.
As you can see from the chart, the Fed reversed its Y2K and 9/11 money pumping episodes quickly and completely. But it has not yet begun to reverse its history-smashing money-printing binge of the past seven years.
This raises major, heretofore unanswered
questions for all investors in all asset classes ...
questions for all investors in all asset classes ...
When the Fed does raise rates, how will it impact the psychology and strategies of investors, businesses and consumers?
What will happen as the Fed begins to reverse the massive money-printing of recent years?
Which sectors and markets are the most vulnerable?
For the answer to the last question, the first place to look will be in all those sectors that have gotten the biggest influx of super-cheap money since 2008 ... and are bound to suffer the most from any outflows. They include ...
- Speculative bubbles in major world commodities, most of which have already burst.
- Speculative bubbles in BRIC countries, three largest of which — Brazil, Russia and China — have also already burst.
- And next, speculative bubbles in small caps, junk bonds and other debts that are only now beginning to show initial signs of strain.
We will tell you more about these — and how to get out of their way — in the weeks ahead.
In the meantime, be sure to keep your investment portfolio as safe as possible, with plenty of cash and a moderate dose of hedging.
Good luck and God bless!
Martin
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