European Union

  • 09 Aug
    Germany Is Solid As A Rock – Sven Has Some Investment Ideas For How To Take Advantage

    Germany Is Solid As A Rock – Sven Has Some Investment Ideas For How To Take Advantage

    • In terms of fundamentals, the German stock index is overvalued compared to the S&P 500.
    • However, there are a few stocks that could offer interesting diversification possibilities as revenues aren’t that dependent on Europe.
    • Some companies also give inflationary protection which is one of the greatest European risks for investors in the long term.

    Introduction

    I’ve described the investment environment in Europe as very risky due to the many black swans that could hit it, from political to financial issues. Nevertheless, this doesn’t mean that there aren’t any good investments in Europe, especially for those who want to take advantage of the liquidity provided by the ECB and from the possibility that the ECB follows the Bank of Japan, i.e. starts buying stocks when it becomes clear that buying corporate bonds isn’t enough to keep the economy growing and to spur inflation. 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 →

  • 31 Jul
    Europe Is Verging On Communism. Investors Beware.

    Europe Is Verging On Communism. Investors Beware.

    • I’ll describe what communism is and how close Europe is to it.
    • I’ll analyze the implications the current monetary environment will have on investments in Europe and the European currency.
    • You can’t compete with a European company that borrows at negative interest rates.

    Introduction

    Now, the title of today’s article is a pretty heavy statement, but let’s look at the definition of communism and what’s currently going on in Europe to see how far Europe is from actually being communist. More →

  • 09 Feb
    Europe Is A Long Term Ticking Time Bomb

    Europe Is A Long Term Ticking Time Bomb

    • Europe is made up of many countries, which means there are even more politicians that just want to get reelected creating an immense short term attitude.
    • Don’t buy Europe just because it underperformed the S&P 500, and don’t buy European debt at single digit yields.
    • Tightening won’t work as many countries have an average debt to GDP ratio above 85%, therefore there is a high chance that the Euro remains weak for longer.

    Introduction

    The IMF just reported that the situation in Greece is getting better, but the debt is unsustainable. This contradictory as it implies a long term catastrophe and short term positivity. I’m flabbergasted on a daily basis by the incapacity or unwillingness of the financial world and monetary institutions to look at the long term.

    That’s why I’m here. To warn you about impending catastrophes and perhaps even increase your returns in the process. More →

  • 14 Oct
    BREXIT Is Slowly Unraveling, Don’t Get Caught Up In It

    BREXIT Is Slowly Unraveling, Don’t Get Caught Up In It

    • The pound didn’t just fall last week, it has been falling for two years.
    • As the UK imports 50% more than it exports, inflation is on the table for certain along with a high risk of stagflation.
    • We’ll analyze the potential risks and rewards for in the UK and the pound.

    The British Pound

    You probably know that the UK voted to leave the European Union back in June in a move called BREXIT. The UK government hasn’t yet started the procedure of leaving, so there haven’t yet been direct effects on markets, the economy, and jobs, but something investors don’t like is uncertainty. More →

  • 27 Sep
    Should You Worry About What’s Happening With Deutsche Bank?

    Should You Worry About What’s Happening With Deutsche Bank?

    • European stocks pushed global markets down after the German Chancellor said they will not help Deutsche Bank if it fails.
    • Europe still offers too much risk for the expected return.
    • In this article we’ll share two critical things you have to think about in order to weather all possible storms.

    Introduction

    After a long and quiet summer, stocks are showing increased volatility. Last week’s FED decision not to increase interest rates has quickly been forgotten as markets try to digest news from Europe where increased fears over capital requirements for Deutsche Bank, which sent European markets down on Monday.

    In this article, we’ll assess the depth of the issue and look for the real reasons behind the European 2% market move on Monday morning. More →

  • 15 Sep
    Troubled Waters Ahead For Developed Markets. Look Here For Returns.

    Troubled Waters Ahead For Developed Markets. Look Here For Returns.

    • Europe and Germany aren’t the best places for international diversification right now.
    • The U.S. is looking a bit better, but you’ll find the best opportunities are mostly in emerging markets.
    • Look for companies that are relatively cheap and that have exposure to China, India, and/or Brazil.

    Introduction

    Two days ago we discussed what is going on in the markets in relation to monetary policies. Today we will discuss what is going on in global economics.

    As the market is showing a high level of volatility, basic economic fundamentals is where we should look to get answers on what to do. By analyzing the latest global economic indicators, we can better determine the risk of a recession in the U.S. and Europe or a slowdown in China, all of which could contribute to a decline in global markets. More →

  • 05 Aug
    Where The Risks Are: It’s Not Where You Might Think…

    Where The Risks Are: It’s Not Where You Might Think…

    • Car sales are in a downtrend and PMI is falling, which ties the FED’s hands.
    • Japan has just entered into direct economic stimulus with $273 billion.
    • The Bank of England behaves like the economy is in a depression, cutting rates and printing money.

    Introduction

    Yesterday we discussed how China isn’t as big of a risk as many would like to make it out to be. Today, we are going to go through the latest data from the U.S., Japan and Europe in order to assess their riskiness. More →

  • 12 Jul
    Could the Economic Climate in Europe Be Contagious?

    Could the Economic Climate in Europe Be Contagious?

    • The first hard data after the BREXIT won’t be available until October, but property funds are already frozen.
    • The decline of the pound will lower UK GDP and will spill over into Europe.
    • Italian banks are in trouble as 25% of GDP are nonperforming loans.

    Introduction

    As two weeks have passed since the BREXIT debacle, most heads have cooled off and we can calmly look at the current situation in Europe, the repercussions of BREXIT and contagion risks. It is important to analyze the full potential impact of the BREXIT by analyzing the stability of the European financial system, business investments, hiring and the political risk premium. More →

  • 27 Jun
    Is BREXIT Just Noise?

    Is BREXIT Just Noise?

    • Markets fell on Friday but they are exactly where they have been in the last weeks.
    • BREXIT is noise, investors should focus on slower global growth and fragile financial systems.
    • The market is still overvalued in historical terms but there are some opportunities.

    Introduction

    An avalanche of articles since last week’s BREXIT is forecasting terrible things for the world economy and financial markets especially. Most focus on the huge declines stock markets saw on Friday, but let us first take a closer look. The UK FTSE 100 index fell 3.15% to 6,138 points on Friday, but all-in-all it was a positive week as last week started with the FTSE at 6,021 points. More →

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