Investiv Daily

  • 05 Mar
    Sunday Edition: How To Set Up A 10 To 1 Reward To Risk Trade

    Sunday Edition: How To Set Up A 10 To 1 Reward To Risk Trade

    Today I want to briefly discuss the difference between trading and investing (there is a big difference) and then show you how to set up a trade with very high reward potential and minimal risk.

    Many market participants don’t properly distinguish the difference between investing and trading which can be detrimental to the success of a portfolio.

    An investment is an asset that is purchased with the hope that it will generate income or will appreciate in the future. Whether investing in public or private companies, you are becoming a literal owner of that business and have claim to a certain percentage of assets and cash flows. More →

  • 03 Mar
    Why An ETF Is The Wrong Way To Invest In Emerging Markets

    Why An ETF Is The Wrong Way To Invest In Emerging Markets

    • Irrational market sentiment and low liquidity create high volatility that can easily be seized by smart investors. Just do the opposite of what the crowd does.
    • Despite what the market might think in a certain moment, emerging markets and businesses grow alongside economic development and positive demographics.
    • ETFs are the crowd and due to their construction and rules, ETFs represent buying high and selling low, which is a terrible strategy anywhere but it’s extremely costly on volatile emerging markets.

    Introduction

    I have a positive bias towards emerging markets because of their positive demographics, growth aspirations, and low starting level from a macroeconomic perspective, and because, from a behavioral perspective, emerging markets are completely irrational, much less liquid, and highly volatile, especially individual stocks.

    You might wonder why I like volatility, low liquidity, and irrational behavior. Well, at the first sign of fear on financial markets, everybody rushes to sell their emerging market position. This, combined with low liquidity, creates huge volatility which is the best investing opportunity if you are a value/growth investor. More →

  • 02 Mar
    A Low Risk High Reward Investment Approach To Oil

    A Low Risk High Reward Investment Approach To Oil

    • Oil prices have stabilized, however, both further upside and downside are possible as nobody knows what OPEC will do or decide.
    • U.S. shale producers are back in the game as oil prices stabilize above $50.
    • A low risk high reward investment strategy is to start investing in oil at prices below $40, or even $30. If oil doesn’t reach those levels, well there will always be other investment opportunities.

    Introduction

    Oil prices have relatively stabilized in the last three months after three years of high volatility. More →

    By Sven Carlin Commodities Investiv Daily Oil
  • 01 Mar
    Value That’s Measured In Millions

    Value That’s Measured In Millions

    • My goal for what I write on Investiv Daily is to increase yearly returns by 4 percentage points for those who want to remain invested in the U.S. and diversified across sectors, by 8 percentage points for those who want the same but dare to go international, and by 12 or more percentage points for those who want to look at specific stock investments.
    • History, statistics, the Buffetts of the world, macroeconomics, cycles, etc., show that returns of above 16% on an annualized basis are possible, so why should you settle for average?
    • The current investing environment praises index or average investing. However, I would wait for a complete business and market cycle to pass before praising an investment strategy. It’s fun how quickly people have forgotten about 2001 and 2009.

    Introduction

    You probably know that I’ve been writing here on Investiv Daily for a while now. Apart from the content and commentary that I publish here, I have a very specific goal in mind. My goal is to eliminate the word “average” from your returns and without increasing your risk. More →

  • 28 Feb
    The Snapchat IPO Tells Me Two Things

    The Snapchat IPO Tells Me Two Things

    • The market is greedy and liquid. This is a very dangerous combination as valuations don’t matter, but what’s cool does.
    • It’s easy to forget that, in investing, it’s more important not to lose than to make it big, and by playing the greater fool roulette, investors can lose a lot.
    • It’s a mystery how some companies that are cool and with $2.2 billion in net profits trade at valuations of 16.5.

    Introduction

    Reuters reported that the Snapchat Inc. IPO is oversubscribed as potential buyers have been plentiful at lunches in New York and London during last week’s road show. Snapchat plans to sell 200 million non-voting shares of which 55 million are from company insiders for an estimated $3.2 billion which would bring the company’s market capitalization to over $22 billion. More →

  • 27 Feb
    A Value Investment Philosophy

    A Value Investment Philosophy

    • If you want to succeed in investing for the long term, your focus has to be on potential losses, only later should you look at potential gains.
    • Risk can’t be determined from historical data, it only depends on the price paid.
    • Risk avoidance is compatible with investing success when the correct approach is used.

    Introduction

    Given the great response, I’ll continue with breaking down Seth Klarman’s legendary book Margin of Safety.

    You can read my introduction to Klarman’s Margin of Safety here, my review of chapter one, Where Most Investors Stumblehere, my review of chapter two, The Nature of Wall Street Works Against Investorshere, and The Institutional Performance Derby: The Client Is the Loser chapter, here.

    Today, we’ll focus on the second part of the book, A Value Investment Philosophy.  More →

  • 26 Feb
    Sunday Edition: Fear and Greed: The Gremlins That Guzzle Your Money

    Sunday Edition: Fear and Greed: The Gremlins That Guzzle Your Money

    No matter how experienced you are as an investor, or how much money you’re working with, I’m willing to bet you started out in about the same place I did: you decided to buy that first stock because something, or someone, convinced you it was a good idea. Maybe your were acting on a stock tip from a close friend, or you saw Jim Cramer talk about how much he liked a stock. Either way, I’m willing to bet that initial decision was driven more by your emotion than it was on your ability to analyze the market or evaluate the stock itself. More →

  • 24 Feb
    Goldman Sachs Is Probably Right But Is It Worth The Risk?

    Goldman Sachs Is Probably Right But Is It Worth The Risk?

    • Goldman Sachs recommends being overweight U.S. equities because of expected loose fiscal policies and because, as they have stated, valuations don’t matter.
    • Goldman expects a 3% yearly return on a moderate risk portfolio.
    • I’ll touch on what the average Goldman client is risking for their 3% yearly return.

    Introduction

    Goldman Sachs (NYSE: GS) recently released its 2017 market outlook. It shouldn’t be a surprise that the outlook is positive. It’s in their interest for stocks and the economy to continue to thrive as GS makes its money from IPO commissions, asset management fees, etc.

    Despite the conflict of interest, their positive outlook will most probably be correct at the end of 2017, but there is something more important than being right or wrong on a yearly forecast.

    Today we’ll discuss Goldman’s view and analyze the possible impacts on our portfolios. More →

  • 23 Feb
    Bubble, Crisis, Bubble, Crisis – Debunking The Chinese Real Estate Sector

    Bubble, Crisis, Bubble, Crisis – Debunking The Chinese Real Estate Sector

    • The Chinese government is controlling the real estate market and allowing short, two-year boom bust cycles.
    • Western investors don’t understand China and see either a bubble or a crash.
    • The best way to invest is to seize the wild market swings created by such erratic behavior.

    Introduction

    The question we would all like to know the answer to is this: is the Chinese real estate market in a bubble?

    If it is, any kind of burst would create a credit crisis, lower economic growth, and quickly spill over first on global financial markets, and consequently onto the global economy.

    There is no consensus on whether or not Chinese real estate is in a bubble. I’m going to describe both perspectives to give you the best information possible for China and Chinese real estate related investments. More →

  • 22 Feb
    What Will The Economic World Look Like In 2050?

    What Will The Economic World Look Like In 2050?

    • Emerging markets will be the economic leaders of the world.
    • Investment returns are related to economic performance, so it’s wise to be internationally diversified.
    • However, diversifying just to diversify is the biggest mistake you can make as emerging markets are full of risk.

    Introduction

    PricewaterhouseCoopers (PwC) just released its report on what the economic world will look like in 2050. You might wonder what that has do to with your investment returns as 2050 is 33 years from now, but it has everything to do with your returns if your investment horizon is longer than a few years because these global trends that will shape the world up to 2050 will also be the trends that will shape your portfolio returns. More →

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