In todays Daily Report, US futures remain largely sideways while Asian markets traded mostly upwards as currencies took a hit on increased safe haven demands.
These are your headlines
Tensions in Syria forced the US government to take forceful actions in arming Syrian rebels, this is bolstering commodity prices especially WTI crude oil.
The Federal Reserve bank meets today to discuss monetary policy actions, the market remains on edge as talk of taper could send stock prices spiraling down.
Japanese stocks begin to rise again as the yen loses value, conversely the Chinese Yuan has been seen to appreciate and adversely affect Chinese stocks.
Finch Ratings agency fears a Japanese style deflation crisis arising in China.
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Have a Great Day !!!
Showing posts with label My trading book. Show all posts
Showing posts with label My trading book. Show all posts
Monday, 17 June 2013
Thursday, 13 June 2013
News Letter.
Going forward, I will make an endeavour to frequently create and upload a newsletter. However, logistically I do not think this blog is the appropriate medium to share the news letter. In the interim it will have to do until we are able to develop a solution.
The link below contains MyTrading Books first news letter, be advised that it is a beta test and frequent updates to style and formats are to come in the following days.
The gist of this letter is to update you on daily macro and micro news that have a bearing on the markets and are reflected in my other blog entries.
Today we have a look at the effects the "taper" discussion is having on the market, world banks revised world GDP forecast and various acquisition and micro news. Please enjoy in the link below
Download
The link below contains MyTrading Books first news letter, be advised that it is a beta test and frequent updates to style and formats are to come in the following days.
The gist of this letter is to update you on daily macro and micro news that have a bearing on the markets and are reflected in my other blog entries.
Today we have a look at the effects the "taper" discussion is having on the market, world banks revised world GDP forecast and various acquisition and micro news. Please enjoy in the link below
Download
Sunday, 9 June 2013
Returning to the unfamiliar
Since I've been buried in six volumes of riveting finance concepts developed by the CFA Institute, the markets have gone on quite a rally. Whenever it seemed to have reached some sort of exhaustion point and a correction was imminent, there was some sort of force pushing the indices to new all time highs. Perhaps irrational exuberance or a justified rally, this market has been quite different than what we've seen in the last two years. But what has defined this market rally, similar to previous ones, is investor risk appetite. This behavior has been fueled by various statistical evidence that proves that we are indeed experiencing a gradual economic recovery which has been fed by the federal reserves' determination to provide liquidity and increased risk appetite in the economy.
These events have fueled this market for several months and continue to destroy the accounts and patience of investors with decidedly short positions, and strangle fixed income investors who rely on yield. During this interesting market rallies we have seen some quite exciting stories; Japanese stocks have soared with the debasement of the yen, and then pull back slightly, Google has continued to inch towards world domination (My friend actually referred to the whole internet as Google), the tech giant Apple has been humbled in the markets, Elon Mosks' Tesla has defied EV critics and proved "profitable", precious metals have been destroyed while other commodities have seen incredible pull backs in certain areas and volatility in others, and finally the highly anticipated "tapering" of the QE initiative is being discussed extensively in the media.
Of course the main measure of the integrity of any market move is the quality of the companies earnings. Q1 earnings reporting were average overall; 65.2% of the companies in the S&P 500 beat bottom line expectation, but top line figures saw an average decline of 1% and only 49% of companies reporting above expected revenues. Furthermore, analysts revised down earnings expectations for Q2 but left estimates for earnings growth for the year at approximately 6%. The news has not been overwhelmingly bullish nor bearish , but the underlying feeling of economic expansion has led to a broad market rally.
I believe this puts the market at a disequilibrium and presents active investment professionals some trading opportunity. Owing to the idea that all stocks are not created equal, I put it to you that there are some stocks showing tremendous value potential and others that are generously valued, and a stock picker with great market timing will be able to take advantage of this disequilibrium. Over the next few weeks i will look to profile some companies which i believe fit into these categories and give my rationale behind each thesis.
That is not to say that this is an active managers market in the least bit, Passive investment strategies will find ample opportunity to re-enter this market in pull-backs, but as we have recently witnessed, pull backs come scarce and shallow in this medium term bull market. The 3 weeks from May 20th to June 6th was the largest pull back the market has experienced since april, with stocks barely retreating 5%. The Dow barely broke below its 50 DMA before employment numbers released on June 6th lent a beacon of hope to which investors hung on and ignited a rally.
This new paradigm bags the question "is this market doomed to succeed ?" I say this because it seems that regardless of the tenor of news that is released, a market rally occurs. Bad economic numbers briefly quenches the exuberance, until investors realize that the Fed has basically guaranteed free money until numbers improve, this is followed by a rally. Conversely, good economic data is initially met with market excitement and the prospect of "tapering" or the Fed cutting the proverbial umbilical cord is completely thrown out of the window. While there are clear forces supporting the market, what will cause the ceiling to reveal it self, and how will the market retreat?
Please look out for a daily news letter coming soon to My Trading Book as well as various reports on companies and macroeconomic themes.
Till then
There's always a Bull Market somewhere.
These events have fueled this market for several months and continue to destroy the accounts and patience of investors with decidedly short positions, and strangle fixed income investors who rely on yield. During this interesting market rallies we have seen some quite exciting stories; Japanese stocks have soared with the debasement of the yen, and then pull back slightly, Google has continued to inch towards world domination (My friend actually referred to the whole internet as Google), the tech giant Apple has been humbled in the markets, Elon Mosks' Tesla has defied EV critics and proved "profitable", precious metals have been destroyed while other commodities have seen incredible pull backs in certain areas and volatility in others, and finally the highly anticipated "tapering" of the QE initiative is being discussed extensively in the media.
Of course the main measure of the integrity of any market move is the quality of the companies earnings. Q1 earnings reporting were average overall; 65.2% of the companies in the S&P 500 beat bottom line expectation, but top line figures saw an average decline of 1% and only 49% of companies reporting above expected revenues. Furthermore, analysts revised down earnings expectations for Q2 but left estimates for earnings growth for the year at approximately 6%. The news has not been overwhelmingly bullish nor bearish , but the underlying feeling of economic expansion has led to a broad market rally.
I believe this puts the market at a disequilibrium and presents active investment professionals some trading opportunity. Owing to the idea that all stocks are not created equal, I put it to you that there are some stocks showing tremendous value potential and others that are generously valued, and a stock picker with great market timing will be able to take advantage of this disequilibrium. Over the next few weeks i will look to profile some companies which i believe fit into these categories and give my rationale behind each thesis.
That is not to say that this is an active managers market in the least bit, Passive investment strategies will find ample opportunity to re-enter this market in pull-backs, but as we have recently witnessed, pull backs come scarce and shallow in this medium term bull market. The 3 weeks from May 20th to June 6th was the largest pull back the market has experienced since april, with stocks barely retreating 5%. The Dow barely broke below its 50 DMA before employment numbers released on June 6th lent a beacon of hope to which investors hung on and ignited a rally.
This new paradigm bags the question "is this market doomed to succeed ?" I say this because it seems that regardless of the tenor of news that is released, a market rally occurs. Bad economic numbers briefly quenches the exuberance, until investors realize that the Fed has basically guaranteed free money until numbers improve, this is followed by a rally. Conversely, good economic data is initially met with market excitement and the prospect of "tapering" or the Fed cutting the proverbial umbilical cord is completely thrown out of the window. While there are clear forces supporting the market, what will cause the ceiling to reveal it self, and how will the market retreat?
Please look out for a daily news letter coming soon to My Trading Book as well as various reports on companies and macroeconomic themes.
Till then
There's always a Bull Market somewhere.
Sunday, 22 April 2012
My Three Year Investment Idea
My Investment Idea
Precious Metals
Precious metals such as Gold and Silver are at a critical point in our history. They have never been valued so high, nor have they been so accessible to the ordinary investor. Precious metals currently provide a great investment opportunity in my opinion. The value in precious metals such as gold and silver is in its ability to be a preserver of wealth and as a currency value. Historically the wealth of a country was always determined by the amount of Gold the country had in its reserves. Precious metals presents a real measure of wealth because they are not subject to inflation or manipulation. After the second world war, countries decided to value their currency relative to a US Dollar rather than the gold standard, this left their currencies subject to monetary policy done in the United States. Now gold is no longer pegged to any national currency, rather it is more commonly used as an investment or a symbol of wealth.
Today an interesting opportunity presents itself in valuing precious metals such as gold. Since gold is not subject to inflation and the value is relatively reliable, it stands to reason that investors who are unsure about the future value of their home currency will seek a stable alternative to protect their wealth. To be more specific, in the United States, monetary policy in the form of Quantitative easing and low interest rates is causing the value of One US dollar today to be a lot less than it was four or five years ago. With the probability of even more monetary policy in the form of Quantitative easing three (QE3), it seems that the US dollar will lose even more value in the future. For investors that recognize this as a threat to their wealth they will seek out ways to preserve their wealth. The two most common and reliable options are to either invest in companies in the form of stocks or purchase a preserver of wealth or another currency.
Stocks would be a good idea, however the risk inherent in owning stocks are increasing. A company fares as well as the economy does, this would be a worse alternative to preserve investors wealth as the outlook for the economy seems to be “grey” at best. The recent credit crisis has led to a nationwide deleveraging of balance sheets, this means that companies and people are no longer borrowing money to support an expanding economy. This will invariably lead to a slowdown in economic growth which does not bode well for the future outlook for stocks. This leaves the second alternative which is to find another form of wealth preservation in precious metals or other currencies. Many countries in the world are facing the same sort of crisis in deleveraging of balance sheets, therefore buying foreign currency would only serve to shift the issue to a different country. The solution to the issue of wealth preservation in this case would have to be precious metals. Gold and other precious metals will always have value either as an aesthetic or as currency, in addition to that, gold and other precious metals are not subject to manipulation by over production, rather the laws of supply and demand are the two main factors governing the price of precious metals. As demand increases and the supply stays relatively the same, the value of gold and silver should appreciate for investors everywhere. Precious metals are the ultimate inflation hedge and safe haven in times of uncertainty which is what we are experiencing now in North America and Europe.
Investment Vehicle
Precious metals ETF (GLD, SLV, CGL) these are exchange traded funds that track the price of owning the underlying commodity with a 99.91% accuracy
Commodity future – This is a risky option but provides an opportunity to own precious metal with leverage
Physical form (Bullions, bars, E.T.C) – Buying the physical precious metal could prove even more expensive, as the owner would have to be concerned about security and storage.
Mining company stocks- Although the value of a stock has other variables besides the value of the underlying precious metals, buying stock in a company that is exposed to the precious metal of one’s choice is another way to be exposed to the effects of change in the price of the commodity.
Precious Metals
Precious metals such as Gold and Silver are at a critical point in our history. They have never been valued so high, nor have they been so accessible to the ordinary investor. Precious metals currently provide a great investment opportunity in my opinion. The value in precious metals such as gold and silver is in its ability to be a preserver of wealth and as a currency value. Historically the wealth of a country was always determined by the amount of Gold the country had in its reserves. Precious metals presents a real measure of wealth because they are not subject to inflation or manipulation. After the second world war, countries decided to value their currency relative to a US Dollar rather than the gold standard, this left their currencies subject to monetary policy done in the United States. Now gold is no longer pegged to any national currency, rather it is more commonly used as an investment or a symbol of wealth.
Today an interesting opportunity presents itself in valuing precious metals such as gold. Since gold is not subject to inflation and the value is relatively reliable, it stands to reason that investors who are unsure about the future value of their home currency will seek a stable alternative to protect their wealth. To be more specific, in the United States, monetary policy in the form of Quantitative easing and low interest rates is causing the value of One US dollar today to be a lot less than it was four or five years ago. With the probability of even more monetary policy in the form of Quantitative easing three (QE3), it seems that the US dollar will lose even more value in the future. For investors that recognize this as a threat to their wealth they will seek out ways to preserve their wealth. The two most common and reliable options are to either invest in companies in the form of stocks or purchase a preserver of wealth or another currency.
Stocks would be a good idea, however the risk inherent in owning stocks are increasing. A company fares as well as the economy does, this would be a worse alternative to preserve investors wealth as the outlook for the economy seems to be “grey” at best. The recent credit crisis has led to a nationwide deleveraging of balance sheets, this means that companies and people are no longer borrowing money to support an expanding economy. This will invariably lead to a slowdown in economic growth which does not bode well for the future outlook for stocks. This leaves the second alternative which is to find another form of wealth preservation in precious metals or other currencies. Many countries in the world are facing the same sort of crisis in deleveraging of balance sheets, therefore buying foreign currency would only serve to shift the issue to a different country. The solution to the issue of wealth preservation in this case would have to be precious metals. Gold and other precious metals will always have value either as an aesthetic or as currency, in addition to that, gold and other precious metals are not subject to manipulation by over production, rather the laws of supply and demand are the two main factors governing the price of precious metals. As demand increases and the supply stays relatively the same, the value of gold and silver should appreciate for investors everywhere. Precious metals are the ultimate inflation hedge and safe haven in times of uncertainty which is what we are experiencing now in North America and Europe.
Investment Vehicle
Precious metals ETF (GLD, SLV, CGL) these are exchange traded funds that track the price of owning the underlying commodity with a 99.91% accuracy
Commodity future – This is a risky option but provides an opportunity to own precious metal with leverage
Physical form (Bullions, bars, E.T.C) – Buying the physical precious metal could prove even more expensive, as the owner would have to be concerned about security and storage.
Mining company stocks- Although the value of a stock has other variables besides the value of the underlying precious metals, buying stock in a company that is exposed to the precious metal of one’s choice is another way to be exposed to the effects of change in the price of the commodity.
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