• 08 Mar
    Inflation Has Arrived – Here’s What That Could Mean For Markets

    Inflation Has Arrived – Here’s What That Could Mean For Markets

    • After 7 years of enjoying interest rates close to zero, the party is over.
    • There are several scenarios that can develop, but the long-term outcome is clear.
    • In the short term, higher interest rates should increase demand for the dollar and U.S. assets, so we could see a higher S&P 500 in combination with higher interest rates.

    Introduction

    For the past year I have been writing about how things are bound to change when inflation finally arrives. Well, inflation has arrived and it’s quickly going higher which means that we’ll have to start talking in nominal and real returns, the FED will be forced to take action no matter the economic environment, and it will have significant repercussions on the economy and markets.

    Usually when I’ve written about inflation, it was about something that will happen somewhere in the future. Now that inflation is finally here, I’ll discuss what will happen in the short term. More →

  • 07 Mar
    The Superinvestors Of Graham And Doddsville – Is Buffett A Hypocrite?

    The Superinvestors Of Graham And Doddsville – Is Buffett A Hypocrite?

    • According to Warren Buffet in 1984, investing and beating the market is simple: just use value investing and a margin of safety.
    • For this market, value investing is irrelevant. However if things change, value investing will become essential.
    • Spoiler alert: What I’ve written in this article you will either immediately like or totally disregard. Unfortunately, the latter will have a negative impact on your wealth.

    Introduction

    One short, 15-page article holds more investing insight than all the content published by the media in a year. It’s Warren Buffett’s article The Superinvestors of Graham and Doddsville.

    As the article was written in 1984, it gives you the real, non-political and unconstrained Buffett. Today’s Buffet is a hypocrite because he is forced to say index funds are a good investment even though stocks are at valuations he would never approve of. He has become so big that anything opposite to positive statements would lead to a possible market meltdown. Plus, don’t be confused by the fact that he recently bought $12 billion of stocks, as he bought into extremely cheap sectors, you can read more about that here.

    Today, I’ll summarize Buffett’s article and put it into today’s context. More →

  • 06 Mar
    The Market Is Euphoric – It’s Time To Get Rid Of Your Overvalued Stocks

    The Market Is Euphoric – It’s Time To Get Rid Of Your Overvalued Stocks

    • Market timing is tricky because if you missed the best 40 days in the last 20 years, your annual returns quickly turn from positive 8.19% to negative -1.96%.
    • But the fact remains that we are looking at a euphoric market with shaky economic foundations.
    • You don’t have to get out of the market. Getting out of overvalued stocks should suffice.

    Introduction

    With every new high reached by the DOW or the S&P 500, the market gets riskier. However, I don’t want to be another analyst that just predicts doom and gloom so today I want to discuss the best risk reward allocation and what an investor can do in these exciting but risky times. More →

  • 05 Mar
    Sunday Edition: How To Set Up A 10 To 1 Reward To Risk Trade

    Sunday Edition: How To Set Up A 10 To 1 Reward To Risk Trade

    Today I want to briefly discuss the difference between trading and investing (there is a big difference) and then show you how to set up a trade with very high reward potential and minimal risk.

    Many market participants don’t properly distinguish the difference between investing and trading which can be detrimental to the success of a portfolio.

    An investment is an asset that is purchased with the hope that it will generate income or will appreciate in the future. Whether investing in public or private companies, you are becoming a literal owner of that business and have claim to a certain percentage of assets and cash flows. More →

  • 03 Mar
    Why An ETF Is The Wrong Way To Invest In Emerging Markets

    Why An ETF Is The Wrong Way To Invest In Emerging Markets

    • Irrational market sentiment and low liquidity create high volatility that can easily be seized by smart investors. Just do the opposite of what the crowd does.
    • Despite what the market might think in a certain moment, emerging markets and businesses grow alongside economic development and positive demographics.
    • ETFs are the crowd and due to their construction and rules, ETFs represent buying high and selling low, which is a terrible strategy anywhere but it’s extremely costly on volatile emerging markets.

    Introduction

    I have a positive bias towards emerging markets because of their positive demographics, growth aspirations, and low starting level from a macroeconomic perspective, and because, from a behavioral perspective, emerging markets are completely irrational, much less liquid, and highly volatile, especially individual stocks.

    You might wonder why I like volatility, low liquidity, and irrational behavior. Well, at the first sign of fear on financial markets, everybody rushes to sell their emerging market position. This, combined with low liquidity, creates huge volatility which is the best investing opportunity if you are a value/growth investor. More →

  • 02 Mar
    A Low Risk High Reward Investment Approach To Oil

    A Low Risk High Reward Investment Approach To Oil

    • Oil prices have stabilized, however, both further upside and downside are possible as nobody knows what OPEC will do or decide.
    • U.S. shale producers are back in the game as oil prices stabilize above $50.
    • A low risk high reward investment strategy is to start investing in oil at prices below $40, or even $30. If oil doesn’t reach those levels, well there will always be other investment opportunities.

    Introduction

    Oil prices have relatively stabilized in the last three months after three years of high volatility. More →

    By Sven Carlin Commodities Investiv Daily Oil
  • 01 Mar
    Value That’s Measured In Millions

    Value That’s Measured In Millions

    • My goal for what I write on Investiv Daily is to increase yearly returns by 4 percentage points for those who want to remain invested in the U.S. and diversified across sectors, by 8 percentage points for those who want the same but dare to go international, and by 12 or more percentage points for those who want to look at specific stock investments.
    • History, statistics, the Buffetts of the world, macroeconomics, cycles, etc., show that returns of above 16% on an annualized basis are possible, so why should you settle for average?
    • The current investing environment praises index or average investing. However, I would wait for a complete business and market cycle to pass before praising an investment strategy. It’s fun how quickly people have forgotten about 2001 and 2009.

    Introduction

    You probably know that I’ve been writing here on Investiv Daily for a while now. Apart from the content and commentary that I publish here, I have a very specific goal in mind. My goal is to eliminate the word “average” from your returns and without increasing your risk. More →

  • 28 Feb
    The Snapchat IPO Tells Me Two Things

    The Snapchat IPO Tells Me Two Things

    • The market is greedy and liquid. This is a very dangerous combination as valuations don’t matter, but what’s cool does.
    • It’s easy to forget that, in investing, it’s more important not to lose than to make it big, and by playing the greater fool roulette, investors can lose a lot.
    • It’s a mystery how some companies that are cool and with $2.2 billion in net profits trade at valuations of 16.5.

    Introduction

    Reuters reported that the Snapchat Inc. IPO is oversubscribed as potential buyers have been plentiful at lunches in New York and London during last week’s road show. Snapchat plans to sell 200 million non-voting shares of which 55 million are from company insiders for an estimated $3.2 billion which would bring the company’s market capitalization to over $22 billion. More →

  • 27 Feb
    A Value Investment Philosophy

    A Value Investment Philosophy

    • If you want to succeed in investing for the long term, your focus has to be on potential losses, only later should you look at potential gains.
    • Risk can’t be determined from historical data, it only depends on the price paid.
    • Risk avoidance is compatible with investing success when the correct approach is used.

    Introduction

    Given the great response, I’ll continue with breaking down Seth Klarman’s legendary book Margin of Safety.

    You can read my introduction to Klarman’s Margin of Safety here, my review of chapter one, Where Most Investors Stumblehere, my review of chapter two, The Nature of Wall Street Works Against Investorshere, and The Institutional Performance Derby: The Client Is the Loser chapter, here.

    Today, we’ll focus on the second part of the book, A Value Investment Philosophy.  More →

  • 26 Feb
    Sunday Edition: Fear and Greed: The Gremlins That Guzzle Your Money

    Sunday Edition: Fear and Greed: The Gremlins That Guzzle Your Money

    No matter how experienced you are as an investor, or how much money you’re working with, I’m willing to bet you started out in about the same place I did: you decided to buy that first stock because something, or someone, convinced you it was a good idea. Maybe your were acting on a stock tip from a close friend, or you saw Jim Cramer talk about how much he liked a stock. Either way, I’m willing to bet that initial decision was driven more by your emotion than it was on your ability to analyze the market or evaluate the stock itself. More →

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