Investiv Daily

  • 30 Jun
    Aluminum: A Leveraged Investment Into the Global Economy

    Aluminum: A Leveraged Investment Into the Global Economy

    • If the economy continues on its growth path, aluminum will enter into a supply gap.
    • After 5 years of losses, investors should be in for a treat.
    • The risks and potential rewards of investing in aluminum will be explained in this article.

    Introduction

    Aluminum is the third most abundant metal in the Earth’s crust and accounts for 8% of its mass. The mineral it is most commonly mined from is bauxite. The most widely known uses of aluminum are aircraft bodies and aluminum foil, but it has a multitude of other uses like window frames, beer cans etc. More →

  • 29 Jun
    BREXIT Aftermath: Where to Look for Returns & What to Avoid Now

    BREXIT Aftermath: Where to Look for Returns & What to Avoid Now

    • U.S. and Europe are overvalued, especially seeing the current political situation and economic fragility.
    • What’s about to hit Europe and the U.S. already hit emerging markets in 2015. There are opportunities in emerging markets now, but where?
    • Bonds seem the riskiest asset of all with no yield and huge potential downside.

    Introduction

    After last week’s BREXIT vote the markets have been in a free fall with a slight recovery yesterday. But savvy investors have been expecting this and it has been a recurring theme at Investiv Daily that stocks are overvalued. In such an overvalued environment it is normal that inflated asset prices take a beating at any sign of future uncertainty. More →

  • 28 Jun
    Is the Negative Cycle Ending in the Shipping Sector?

    Is the Negative Cycle Ending in the Shipping Sector?

    • Most shipping companies are down more than 90% and the short term outlook does not look bright.
    • After 25 years of 10% global fleet gross tonnage growth, 2016 is a turning point with growth lower than 5%.
    • Increased interest rates, fewer ships and constant global trade growth show that there are investment opportunities in the shipping world.

    Introduction

    It seems strange to analyze the shipping sector in the current volatile markets, but sound sector analyses help to keep nerves firm and to clearly valuate the opportunities a bear market brings. The shipping sector is interesting due to the fact that it represents a perfect example for a bottomless investment theory and an excellent investment opportunity for those who can and know how to catch a falling knife. 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 →

  • 24 Jun
    How to Prepare Your Portfolio For The Next Recession or Stock Market Crash

    How to Prepare Your Portfolio For The Next Recession or Stock Market Crash

    • The risks of a slowdown are higher than the upside.
    • Fundamental trends are negative in advanced economies while emerging markets show higher growth rates and are cheaper.
    • It is important to create a diversified portfolio with uncorrelated assets.

    Introduction

    In an environment where it seems maximum potential for the U.S. economy has been reached, the St. Louis FED chief, James Bullard, has said in his most recent report that he favors only one interest rate increase through 2018, which would at best keep things stable. His view is further supported by the fact that the unemployment rate is sitting at below 5%, and the Personal Consumption Expenditures PCE inflation—measured by the Dallas FED—is at 1.84%, both of which signal that the economy has reached its maximum potential. More →

  • 23 Jun
    Will There Be A Long Term Impact To The Fed’s Shift In Rhetoric?

    Will There Be A Long Term Impact To The Fed’s Shift In Rhetoric?

    • A positive outlook seems more political than realistic as the FED is out of maneuvering power.
    • Keeping interest rates unchanged is the best and the only thing the FED can currently do.
    • Low interest rates will weaken the dollar, boost exports and increase corporate earnings in the upcoming earnings season.

    Introduction

    In FED’s Chairwoman Yellen semiannual policy report, the rhetoric has significantly changed since the last report in February. In short, the full employment target is almost reached but the inflation rate is still below the targeted 2% and the expectations for the reaching of that target have been changed from short term to medium term. Further, the latest job reports show a slowdown in jobs increases which creates a bit of a scare. The FED estimates the slowdown to be transitory. More →

  • 22 Jun
    Don’t be Fooled by Noise, Earnings Will Tell the Truth

    Don’t be Fooled by Noise, Earnings Will Tell the Truth

    • A look into next month’s earnings season and trends.
    • 6 out of 10 S&P sectors have earnings declining.
    • 72% of companies issued negative guidance.

    Introduction

    With all eyes focused on Brexit and the FED, it seems that no one really cares what is going on in the economy and, most importantly, with corporate earnings. Don’t forget that next month is earnings season and the earnings trend up until now has been a negative one. As corporate earnings are the main factor in stock returns, you should be focusing on how to prepare for that and not on Brexit as it will probably be forgotten by next week. More →

  • 21 Jun
    Soros is Back and Betting Heavy On Gold

    Soros is Back and Betting Heavy On Gold

    • Structural debt issues in China and European fragility will limit global growth.
    • Soros is overweight gold and short the S&P 500.
    • He trimmed his U.S. stock portfolio by 37%.

    Introduction

    George Soros is an Hungarian-born, 85-years young hedge fund manager and philanthropist famous for his daring investment bets. More →

  • 20 Jun
    Dividend Aristocrats: Should You Buy?

    Dividend Aristocrats: Should You Buy?

    • Stock picking amid dividend aristocrats should give even better results.
    • Dividend aristocrats come from recession-proof industry sectors.
    • PE ratios vary from 11 to 155 and dividend yields from 0.4% to 6.5%.

    Introduction

    A company receives the title of ‘dividend aristocrat’ when it has continuously increased its dividend for the last 25 or more years. This means that the company manages to go through recessions and market shocks with a growing, healthy cash flow that enables constant dividend increases. More →

  • 17 Jun
    Is Global Recession On Its Way? Brexit May Be A Warning Sign…

    Is Global Recession On Its Way? Brexit May Be A Warning Sign…

    • Global GDP growth rates are stalling even with increased monetary stimulus.
    • There are several potential recession triggers.
    • It is important to assess the risks a portfolio runs as no one can know when a recession will come, but eventually it will as it always has.

    Introduction

    The main FED goals are sustainable economic growth and full employment. In order to achieve those goals, the FED has decided not to increase interest rates as the economy is still relatively weak and employment has been slowing down. Not only that, but the expectation of future interest rate increases has been revised downwards. More →

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