Wednesday, September 27, 2017

What bargain hunters should be looking to invest in

Buy low sell high ? Opportunities for price appreciation could be found in Agriculture, Precious Metals, Emerging market stocks.

"Relative to everything else, I think precious metals are not terribly expensive. I think agricultural commodities are inexpensive. I think are emerging markets, some of them have performed superbly this year, by and large there is better value in the emerging markets than in the US.

One market that has lagged behind just about everything is the Japanese stock market. It's just broken out on the upside recently. I think in the last few months of this year, we could get a big move in Japanese stocks on the upside."


Monday, September 25, 2017

Many small events can trigger a stock market decline

The power of contrarian thought is very important to making money and to avoid losing your investment. Marc Faber says why he thinks the crowd may be wrong and what could trigger a stock market meltdown.

"You don't see, and I don't see. And, nobody sees. That's why people keep buying stocks. And yet, something will happen one day. I think it may very well come from a credit event. Or, it may come from the disclosure of a major fraud. Or, it may come because interest rates start to go up although Central Banks remain on the dovish side. There are many events that can trigger a decline.

In 2009 when stocks bottomed out, I can tell you that not many people saw why stocks would go up. Now it's the opposite. The sky is clear. Corporate profits have been expanding — they're good. Interest rates are low, but valuations are very high."       via CNBC

Thursday, September 21, 2017

Emerging markets, US Dollar, Chinese stocks could do well

US Dollar short term rebound
"I think the dollar could easily rebound by 4 to 5 percent, or maybe even more. Longer term, I'm obviously not optimistic about the U.S. dollar. You just have to look at the U.S. administration and their economic policies that will not be very conducive for dollar strength in the long run"

Fed and US Govt policies
"They're actually shooting themselves in their own feet, so long term I'm obviously negative about the U.S. dollar."

Battle of the currencies
"The question is which currency is much better than the U.S. dollar? They're all not so desirable, that's why some people invest heavily in the so called crypto-currencies."

"I don't want to increase my bond exposure. Every year, some bonds are maturing, and as a result I'm reducing somewhat the bond exposure. I think the environment going forward, as had been the case in the first six months of the year, is that active managers can perform well by being overweight." 


Tuesday, September 19, 2017

Asian markets outperforming US

The Indian market is up 30 percent this year and the Korean market is up 25 percent in US Dollar terms. So, we have had a shift in market leadership away from the U.S. to other markets and I think there is better value in Europe and still better value in Asia than in the US. 

Some Japanese companies are actually quite good value.

I personally prefer investments in Indochina, in Vietnam, Cambodia, Thailand, Myanmar and also Laos. That is the region I think has enormous economic potential and there will be plenty of opportunities. But for institutional investors, the Japanese market offers in some sectors very good value.

Marc Faber: Better value in Asia and European markets than US from CNBC.

Monday, September 11, 2017

Asia long term prospects are fine - India Demonitisation drive was a failure

India future growth prospects

For me, if India can grow at 5 per cent for next 10-20 years, that is a fantastic growth rate. But most Indians, they think their country should grow at 8-10 per cent. Forget it. Five per cent is a fantastic growth rate in a world burdened by high debt. For India, burdened by bad debts, 5 per cent is a fantastic growth rate.

India vs USA vs China

The sentiment about India is relatively optimistic. The market has relatively performed well. We are not interested in the next six months but next 20 years. US is not going to grow much. People will look more and more towards Asia as having a bright future, though not problem free. In terms of new industries, we have so many global companies out of India and China, which didn't exist 20 years ago. We have global players from Asia. The long term outlook is fine. Though, in my view, China's markets are relatively depressed.

Modi's demonitisation move

We all know demonetisation has been a catastrophe. It didn't achieve its objectives. It could have been done in a benign way, giving a period of six months wherein old notes could be exchanged so that nobody suffered.

Tuesday, September 5, 2017

Crypto-currencies, Bitcoin and bubbles

Last month, I explained that if an investor was looking for volatility he would find it in Bitcoins, but that I had no idea how much they would eventually be worth. A reader of ours was kind enough to point out to me that I was wrong.

According to Arne Wolframm, "there is no crypto-currency mania at all. There is 7 trillion dollars’ worth of gold, but only 44 billion worth of Bitcoin in this world. If there is so much demand for gold as store of value and currency, even though it is much harder to store, transact and divide than BTC, then there is no reason to assume there will be less demand for BTC, which is much easier to store, transact and divide."

Wolframm concluded his email by saying, "So, stop being stubborn and get on board with crypto! (Unless, that is, you can come up with a counter-argument that actually holds water, in which case I would be most grateful if you would share that with me). And yes, do ONLY buy the oldest, original, most secure, most advance, most widely traded, held, mined and accepted type of crypto currency: Bitcoin”

As I said before repeatedly, I do not know whether Bitcoins will be worth one day $500,000, or $1 million (the latest forecast I have seen) or far less than they trade at today (though that would be my guess). But regarding the fact that “it does not matter that” whereas the maximum supply of Bitcoins is fixed but not the number of competing cryptocurrencies I have a different view than Mr. Wolframm. It may be true that market participants choose to get paid in the “most widely accepted currency” except that the most widely accepted currency of the day may not be the most valuable and the most accepted currency tomorrow.

Yet, Wolframm may be right that Bitcoins continue to appreciate in the near term (as they have done so by more than 60% since he wrote to me. Year-to-date, Bitcoins are up by almost 400%). Because the maximum amount of BTC is fixed at 21 million and since we still live in a huge liquidity bubble (just look at the low level of interest rates) in which investors will buy anything that moves up, Bitcoins and other Crypto-currencies may become the favorite global “object of speculation.”

via gloomboomdoom