• 27 Dec
    The Silver Story

    The Silver Story

    • Silver has a big industrial application and could be also used for batteries.
    • The metal has been in a supply deficit for the last three years but prices haven’t yet reacted.
    • The bullish case is very strong. There’s significant downside, but the upside is greater.

    Introduction

    Two weeks ago we discussed how it’s a good time to start dollar cost averaging precious metals due to ballooning central banks’ balance sheets, the end of a 30-year low inflation period, and the current relative cheapness of precious metals in relation to their 5-year highs. Today, we’ll discuss how silver might be the better option to gold as it’s historically cheap, it has been in a supply deficit for the past three years, and its industrial usage is growing while production is declining. More →

  • 26 Dec
    Beware The Short Term Cycle In The Automotive Industry

    Beware The Short Term Cycle In The Automotive Industry

    • The automotive industry is expected to grow in the future. While the high barriers to entry eliminate new competition, it’s a perfect business to be in.
    • The short-term debt cycle and stretched balance sheets indicate a contraction in revenues, margins, and profits.
    • To make money with automotive stocks just follow the short-term cycle and be patient, it will hit stocks, it always does and it is close.

    Introduction

    I have recently been nagging about the negative asymmetric risk reward situation the general stock market offers. In order to give you more value, I’m going to analyze a few sectors in detail with the hope of finding the ones that will give you better risk reward ratios.

    Today, I’ll discuss the automotive industry. Many consider it extremely cheap, but valuations simply don’t want to hear about it and remain low. I’ll start with an analysis of the two cycles in the industry, continue with an overview of the fundamentals and a conclude with a risk reward estimation. More →

  • 25 Dec
    Happy Holidays From Investiv Daily

    Happy Holidays From Investiv Daily

    As it’s Christmas Day, I thought it might be nice to send readers a small ‘Thank You’ gift in lieu of an article today.

    The gift, a copy of our new report on the agricultural sector, was written by Sven Carlin, daily contributor to our Investiv Daily newsletter. More →

  • 23 Dec
    The Dow To Hit 20,000 Alongside A Strong Dollar, Time To Be Greedy?

    The Dow To Hit 20,000 Alongside A Strong Dollar, Time To Be Greedy?

    • Investors can expect a nominal return from stocks of 4.3% per year going forward.
    • The story looks far different for speculators. The strong dollar and higher debt costs should weigh on the economy and stocks.
    • Specific sectors and international diversification offer a better risk reward situation.

    Introduction

    The Dow Jones is flirting with 20,000 points, and it’s possible that by the time you’re reading this, it has already crossed the mark.

    In addition to the Dow reaching all-time highs, the dollar index has also reached new highs for the decade. More →

  • 22 Dec
    Advice On Value Investing In Emerging Markets From Mohnish Pabrai

    Advice On Value Investing In Emerging Markets From Mohnish Pabrai

    • Investing in emerging markets still offers 100-baggers, the problem is that most investors don’t stick with them.
    • Looking for 100-baggers can make your portfolio, but it can’t break it because you can only lose 100% of the investment while the upside is unlimited.
    • Great investments can be found everywhere, you just need to know what to look for.

    Looking Around The World For Value

    It gets harder and harder to find stocks that have positive future business perspectives, a low valuation, and a price to book value that gives you a margin of safety when investing. Therefore, it’s necessary to do some research on such investments at a larger scale, especially in emerging markets. One person who is a specialist on this is Mohnish Pabrai. More →

  • 21 Dec
    Should You Invest In Russia? Sven Tells You Why It Might Not Be Such A Good Bet

    Should You Invest In Russia? Sven Tells You Why It Might Not Be Such A Good Bet

    • The numbers make Russia the cheapest global market.
    • However, most of the market is made up of energy and financials, while normal companies are fairly priced.
    • Long term economics in Russia aren’t positive as the country is completely dependent on oil prices.

    Russia As An Investment Opportunity

    Russia has been the best performing market year-to-date and is up 50%. However, it’s still considered by many in the financial environment as one of the cheapest global markets as it’s still far from the pre-sanction and higher oil prices levels of a few years ago. More →

  • 20 Dec
    Be Overweight In These Sectors In 2017

    Be Overweight In These Sectors In 2017

    • Increasing interest rates make earnings growth unlikely and increase the probability for a decline of the S&P 500.
    • To beat the S&P 500, you have to invest in sectors that offer a better risk reward ratio than the S&P 500.

    Don’t Go For 10 To 20 Percent Returns In 2017

    With the S&P 500 yielding 3.85% going into 2017, stocks in general are currently an investment vehicle that gives you a small and limited upside with a potentially large downside.

    We know that the FED plans to raise interest rates another three times in 2017. If that happens, the investments people consider most secure—like treasuries, dividend paying blue-chips or REITs—will be hit the hardest because as required yields go up, their asset prices will go down. Therefore, the best way to prepare for 2017 is to position yourself so that if the FED raises rates, your upside is far bigger than 3.85% and your downside far smaller than the potential downside of the currently overvalued stock market. More →

  • 19 Dec
    The FED Getting It Right Would Be Scary For Stocks

    The FED Getting It Right Would Be Scary For Stocks

    • A negative scenario implies economic growth and inflation not reaching the FED’s estimations, which wouldn’t be such a bad thing for stocks in 2017.
    • A positive scenario implies the FED’s estimations to be met, a potentially dangerous situation for stocks.
    • A federal funds rate of 2.1% by the end of 2018 would see the S&P 500 at 1,629 points, all other things being equal.

    Finally, The FED Had The Courage To Increase Rates

    After more than a year of waiting, the FED finally decided to increase interest rates.

    You probably know that this is because unemployment has reached natural levels and inflation is rapidly moving towards targeted levels. On top of that, the FED forecasts to raise interest rates by another 0.75 percentage points in 2017.

    Today we’ll discuss the potential repercussions this rise in rates could have on the economy and our portfolios. More →

  • 18 Dec
    Sunday Edition: Looking For Value – Market Heavyweight Or Scrappy Underdog?

    Sunday Edition: Looking For Value – Market Heavyweight Or Scrappy Underdog?

    In sports, there is something incredibly compelling about the underdog that nobody expects to win, but does it anyway. It’s even better when it happens against an opponent that is obviously superior in practically any measurable way. As a fan of sports like football and basketball, I like the playoff after-season, when the best handful of teams battle it out for ultimate supremacy. In particular, I get a kick out of trying to pick out the team that I think everybody is dismissing but could be in just the right place, at the right time to prove them all wrong. True, Cinderella doesn’t often actually get to wear the glass slipper, but boy, is it fun when she does! More →

  • 16 Dec
    Why You Might Want To Start Dollar Cost Averaging Precious Metals

    Why You Might Want To Start Dollar Cost Averaging Precious Metals

    • Central banks’ balance sheets have quadrupled in the last decade.
    • Balance sheets will continue to balloon as there isn’t another option for economic growth in developed countries.
    • You should start to think about protecting yourself from inflationary pressures now, when such fears seem distant and unlikely. It’s the cheapest time to do it.

    Introduction

    Yesterday we discussed the three drivers that could push markets higher if all other factors like interest rates, risk perceptions, and global political issues stay as they are now. However, we didn’t discuss what happens if the underlying pillars that have been holding up global financial markets since the Great Recession change. Today we’ll discuss what could change and how to properly diversify. More →

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