China

  • 04 Oct
    The New Silk Road Will Change Everything – Here’s What You Need To Know

    The New Silk Road Will Change Everything – Here’s What You Need To Know



    • What’s going on in Asia isn’t news that sells. But the consequence is that we are poorly informed about the groundbreaking One Belt One Road project.
    • Lack of and poor information doesn’t allow for proper capital allocation and international diversification.
    • We’ll discuss what’s going on in Asia and how you can profit from it by buying foreign but also domestic stocks.

    Introduction

    What we’re mostly focused on now will probably be completely irrelevant in a few years and will almost certainly be in fifteen years.

    Most of the market related talk now focuses around possible tax reform or similar incentives. As these are short term factors and the economy offers no free lunch, nobody knows how those probable measures will actually impact the economy and stocks. More →

  • 02 Oct
    Iron Ore Stocks Are Hot, But Are They Really A Good Buy?

    Iron Ore Stocks Are Hot, But Are They Really A Good Buy?



    • Iron ore prices are relatively high, therefore, don’t expect earnings and dividend stability.
    • An analysis of mining costs shows the balance price for the metal. Trade iron ore miners around that balance price.
    • Vale’s mining costs per ton will go as low as $8.

    Introduction

    Iron ore miners currently being praised as stable companies with low valuations, high earnings, and dividends, has really taken me by surprise.

    But that’s how the market thinks. Short term, short term, short term, and a stock is a good buy only when it’s at multi-year highs because it’s the market performance that determines the quality, not the fundamentals. More →

  • 11 Sep
    Out Of This World Debt Levels Will Damn Future Generations

    Out Of This World Debt Levels Will Damn Future Generations

    • Debt levels are the key driver of economic growth in developed countries. So keep an eye on debt.
    • The velocity of money, household debt, car loans and sales aren’t telling a good story.
    • Globally, the situation isn’t much better. However, there are a few exceptions.

    Introduction

    In today’s article, I’ll analyze the current global debt environment.

    Debt is an economic factor that is unwatched as long as things are going well but as soon at things turn south, everyone will be screaming about a debt crisis and the end of the financial world as we know it.

    Given this, it’s extremely important to know what is going on, how sustainable the current debt levels are, what the impact of debt on the economy is, how to position your portfolio, and perhaps even how to take advantage of potential black swans arising from future debt instabilities. More →

  • 30 Aug
    Air Travel Is Booming – Here’s The Best Way To Invest In The Trend (And No… It’s Not Airlines)

    Air Travel Is Booming – Here’s The Best Way To Invest In The Trend (And No… It’s Not Airlines)

    • It’s interesting how global economic activity is shifting more and more toward the east.
    • Air traffic is expected to continue to grow at more than 6% per year. However, this doesn’t mean that any related investment will do well.
    • Good investments will be those with limited or no competition. Think airports.

    Introduction

    When investing, you want to be exposed to growing trends not declining ones. Not that investing success can’t be found in declining industries, but focusing on growth sectors simply increases your chances for a positive return and lowers the possibility of a negative return. Thus, increasing your expected return and lowering your risk.

    One such almost certain long-term trend is the growth of the global airline industry. More →

  • 18 Aug
    The Bear Case To Investing In China

    The Bear Case To Investing In China

    • The first risk is a possible contraction in the Chinese credit cycle.
    • However, any kind of interest rate spike leads to immediate PBOC intervention.

    Introduction

    I have been pretty bullish in my previous articles about investing in China as I think it’s a positive risk reward situation. Nevertheless, a positive bull case wouldn’t be fair without looking at the risks China carries. So in today’s article we’ll discuss the main risks plaguing the Chinese economy and stock market. Understanding the specific risks will also help in better positioning your portfolio to the ugly things that might happen and carefully selecting the stocks that will be less affected. More →

  • 17 Aug
    Worried About The Current Environment? Here’s Why You Should Be.

    Worried About The Current Environment? Here’s Why You Should Be.

    • We’ll discuss the most obvious risks to the current financial environment.
    • For example, higher interest rates are already negatively affecting the U.S. economy and inflation.
    • However, the most dangerous risks are the hidden ones.

    Introduction

    Yesterday we discussed the main factor behind the current bull market, i.e. central bank asset purchases, and I described three potential scenarios, one where things continue as expected, one where central banks increase stimulus, and one where inflation messes things up for everyone.

    Nevertheless, nothing that was discussed in yesterday’s article was a new finding. Such fears have been circulating the financial environment since 2009, and as we have witnessed, nothing much has changed since then while the global financial system seems stable as a rock. Even Japan’s economic activity has surprised on the upside with growth of 4% for Q2 2017. More →

  • 01 Aug
    Want The Secret Formula For Economic Success? Look To Ray Dalio

    Want The Secret Formula For Economic Success? Look To Ray Dalio

    • It’s possible to estimate a country’s economic growth with precision and I have done so in this article. Perhaps it’s better to say that I used the available—and free—research done by 1,500 Bridgewater employees.
    • As future economic trends are pretty clear, it’s important to position one’s portfolio accordingly.
    • However, don’t just jump into emerging markets at any price. Compare the fundamentals and the growth in relation to your investment horizon.

    Introduction

    There’s a lot of talk about economics, economic growth, what drives it, etc., but there aren’t many facts that properly show links between causes and effects.

    One person who researched those links and shared the findings is Ray Dalio, hedge fund manager of Bridgewater Associates. In today’s article, I’ll describe what Ray found and then analyze how we can best position our portfolios in order to be more exposed to positive forces and less to negative forces. More →

  • 19 Jul
    The Big News From China & What It Means For Your Portfolio

    The Big News From China & What It Means For Your Portfolio

    • The Chinese economy surprised to the upside and Chinese stocks have spiked.
    • A fundamental analysis shows that Chinese stocks are still 50% undervalued.
    • The Chinese economy is less risky and growing faster, but the market hasn’t yet fully recognized the situation which makes this the best time to invest.

    Introduction

    One of the greatest fears circulating the investing environment in the last few years has been that China is about to slow down and drag the whole world into negative territory. I found such a fear a bit silly because it wasn’t based on proper macroeconomic analysis but mostly on western investors’ perception. More →

  • 17 Jul
    How The Economic Machine Works & Why You Need To Prepare Your Portfolio For It

    How The Economic Machine Works & Why You Need To Prepare Your Portfolio For It

    • Productivity growth is the long-term key, make sure your portfolio follows it.
    • The global distribution of wealth is shifting very quickly.
    • Preparing your portfolio for what’s going to happen doesn’t even cost that much. On the contrary, it is even more profitable.

    Introduction

    Ray Dalio is famous for many things. One of them is his explanation of how the economic machine works where he describes how productivity growth, the long-term debt cycle, and the short-term debt cycle affect an economy.

    Today, I’ll briefly summarize his findings as they are reported in a 300-page document and, most importantly, see how Dalio’s economic philosophy can affect our investing strategies. More →

  • 04 Jun
    Sunday Edition: Why Now Is The Wrong Time To Get In On This Chinese Growth Story

    Sunday Edition: Why Now Is The Wrong Time To Get In On This Chinese Growth Story

    Over the last few weeks we’ve discussed several technical patterns that can tell you when a stock may be beginning a new uptrend, so today I wanted to talk about a pattern that can help you spot the beginning of a new downtrend.

    The stock we’re looking at today is Momo, Inc. (NYSE: MOMO). More →

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