• 22 Apr
    On International Diversification

    On International Diversification

    • Markets are more correlated in the short term but strongly diverge in the long term.
    • Currency movements further fuel international divergence.
    • Being overweight a certain market or currency means carrying additional risks that could be removed by international diversification.

    Introduction

    One issue that is more often off than on investors’ minds is international diversification. Historically, cross-country equity correlations have been far from perfect but they are becoming more correlated in recent times. The higher correlation is not a reason to shun international diversification. More →

  • 21 Apr
    An Investigation Into the Relative Cheapness of the Automotive Industry

    An Investigation Into the Relative Cheapness of the Automotive Industry

    • With a PE ratio of 5 to 10 the automotive industry looks attractive
    • The risks are that the industry is considered to be at a historical peak by most analysts
    • A global perspective gives a bullish outlook for the industry

    Introduction

    The automotive industry is usually called a cyclical industry, considered elastic in relation to GDP and vulnerable to economic shocks. According to a former Ford chief economist a normal recession reduces sales by 15%. With sales being reduced by 15% and costs being inelastic the decline in sales is the one that makes the difference between strong earnings and big losses. Any sign of a recession puts people off from buying new cars and makes them stick to the car they have for a little longer. Connecting the cyclicality and cost inelasticity with the current valuation for automotive companies brings to interesting conclusions. More →

  • 20 Apr
    Is Brazil an Investing Opportunity?

    Is Brazil an Investing Opportunity?

    • The political situation is corrupted but the country shows growth potential.
    • From a long term perspective, the market is undervalued and currency effects can bring to gains of 80%.
    • Brazil is still a developing economy with a young population and huge potential.

    Introduction

    On Sunday the Brazilian congress voted for the impeachment of president Dilma Rousseff. When the senate, likely in the next few weeks, confirms the vote, the Workers party will temporarily be replaced by a center-right administration government. The move from left to right creates hopes for investors as they look for a more investing friendly environment. More →

  • 19 Apr
    A Coal Perspective on Commodities

    A Coal Perspective on Commodities

    • Coal has seen lots of bankruptcies but companies continue to produce and the price remains low.
    • Iron ore provides better investing opportunities and a better demand scenario.
    • Low cost and low debt producers with increasing demand should be the best risk/reward investments.

    Introduction

    Yesterday’s newsletter mentioned that there might be opportunities in the commodities markets. Today’s letter is going to elaborate on why the coal mining industry is seeing many bankruptcies and extract important insights in order to enable finding opportunities in other commodities that minimize risks and maximize returns. More →

    By Sven Carlin Commodities Investiv Daily
  • 18 Apr
    What to Expect from the US Stock Market

    What to Expect from the US Stock Market

    • The S&P 500 has not grown in the last 14 months.
    • A fundamental and interest rate perspective show that the S&P 500 is overvalued.
    • Strategies that include stock picking, emerging markets or beaten down cyclicals might prove best.

    Introduction

    The S&P 500 has rallied in the last two months, from the February 11 low of 1829 points to the current 2083 points. This is an increase of 13% but to understand what is going on in the markets a longer term perspective has to be taken. More →

  • 02 Feb
    The Case for Gold Now

    The Case for Gold Now

    Gold has had a resurgence of late. Is it because in this volatile market investors want to put their money toward something solid, or is it something else? More →

    By Kristina Keene Gold Investiv Daily Market Forecast
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