Investiv Daily

  • 21 Nov
    Asymmetrical Risk Reward – What It Means For You

    Asymmetrical Risk Reward – What It Means For You

    • “The essence of portfolio management is the management of risks, not returns.” – Benjamin Graham
    • You should rethink your stocks and bond holdings as most have negative asymmetric risk reward.

    Introduction

    Asymmetrical risk reward is the essence of investing in stocks, and is also essential for those who want to beat the market.

    In today’s article, we’ll discuss what it is, what investment vehicle has the best asymmetrical risk reward opportunities, and how you can apply its benefits to your investments. More →

  • 20 Nov
    Sunday Edition: Time To Buy E. Coli

    Sunday Edition: Time To Buy E. Coli

    Last week we discussed what it means to be a contrarian investor. And why, when done successfully, it can lead to substantial market outperformance.

    Today we are going to discuss a specific contrarian opportunity in the chain restaurant business. More →

  • 18 Nov
    Global Risks Look More Like Opportunities

    Global Risks Look More Like Opportunities

    • From an investing perspective, global risks represent more of an opportunity than real risk.
    • Some chain reactions might still arise from fiscal risks in Europe while many global risks are of a short-term nature.

    Introduction

    Each year, the World Economic Forum (WEF) publishes its Global Risk Report. It’s a great, comprehensive analysis to look at to better understand the world we are living in.

    Today we’ll analyze the global risks from an investing perspective and will arrive at interesting conclusions. More →

  • 17 Nov
    What Buying Olive Oil In Italy Can Teach You About Value & Price

    What Buying Olive Oil In Italy Can Teach You About Value & Price

    • Everybody knows the price of a stock, but few know the actual value.
    • There are a few things that can help you when buying undervalued assets.
    • To determine if you’re investing in a good undervalued investment, consider the company’s probability of bankruptcy.

    Introduction

    This summer, I was in Italy and buying some olive oil. As we use mostly olive oil in our kitchen, I bought 10 liters of this special oil, enough to last for a few months. More →

  • 16 Nov
    The Metal Conundrum After Trump’s Victory

    The Metal Conundrum After Trump’s Victory

    • The current copper spike may not last, but it shows copper’s long-term potential, especially if part of the announced infrastructure program materializes.
    • Unlike copper, other metals aren’t in a sweet spot due to unlimited supply, and recent and large price increases.
    • Gold is the riskiest of all metals, especially now with no more election uncertainty, a stronger dollar, and the expected FED action in December that will have us seeing higher interest rates.

    Introduction

    In the last couple of weeks, metal prices have moved.

    Copper has made an historic surge of 21.5% in the last two weeks, while gold fell 7.5% from its peak.

    As Trump won the election, the expectation of intensified construction and increased investments in infrastructure have pushed copper prices higher while gold suffered as the world didn’t come to an end. The short term moves in metal prices aren’t that significant as they are influenced mostly by speculators, but an analysis can show us where the long-term risks and opportunities lie. More →

  • 15 Nov
    Finding The Equilibrium In Emerging Markets & Why You Need To

    Finding The Equilibrium In Emerging Markets & Why You Need To

    • Emerging markets are volatile and considered risky, but the economics are great.
    • We can’t fight the market without looking at the risks, but what we can do is rebalance our portfolios and do some dollar cost averaging.
    • Such a strategy allows you to grasp the benefits of great economics and lower valuations while eliminating volatility risks.

    Introduction

    Last week was very interesting for emerging markets.

    Trump’s win sent shockwaves around the world and such movements usually hit those markets the hardest that don’t have much relation to the U.S. but are considered risky and therefore, investors quickly pull funds out of those markets. More →

  • 14 Nov
    What Trucking Can Tell Us About The Economy

    What Trucking Can Tell Us About The Economy

    • Trucking data hasn’t been stellar year to date which questions the strength of Q3 economic growth.
    • No trend is clear yet, however the trucking index is an important indicator.
    • Trucking stocks aren’t tempting given the forecasted growth and inherent risks.

    Introduction 

    Trucking is an interesting sector for two reasons, one is of course as an investment, while the other is as an indication of the economic health of the nation. More demand for trucking means that there is more demand for goods which should increase GDP and consequently corporate revenues and profits. More →

  • 13 Nov
    Sunday Edition: The Art Of Contrary Thinking

    Sunday Edition: The Art Of Contrary Thinking

    I bought my first shares in a publicly traded company in ‘95, as a 22 year old college dropout. I can’t remember the name of the company or the ticker.

    What I can remember is that it was a hot tip from a friend and a pink sheet stock, although at the time I didn’t know what that meant. Yes, the company went out of business and I lost $2,000 bucks.

    Back then I was eager to learn and devoured every book I could get my hands on, that I believed held the key to getting rich in the stock market. More →

  • 11 Nov
    Forget About The Election Noise, Let’s Talk About China

    Forget About The Election Noise, Let’s Talk About China

    • China’s long term outlook is very positive and its debt is not worrying.
    • However, due to the nature of economic cycles, we have to expect and prepare for potential trouble coming from China.
    • When trouble will happen is anybody’s guess as many have called negative scenarios several times, but those have so far failed to materialize.

    Where China Is Now & Where It Is Going

    China is the growth motor of the global economy. It consumes about half of the global produced copper and produces half of the global steel output. This is due to the incredible GDP growth China has achieved in the last 25 years, which has averaged 9% per year. More →

  • 10 Nov
    Why You Should Switch To Active Investing Now

    Why You Should Switch To Active Investing Now

    • PE ratios in the S&P 500 are all over the place; 7 of the top 20 stocks have PE ratios below 15, 7 from 20 to 30, and 5 above 30.
    • You can buy stable, growing businesses at PE ratios below 15, so why would you stick to passive investing and buying riskier stocks at PE ratios of above 20?
    • Maybe you think passive investing meets the definition of “boring,” something investors such as Buffett advocated. I don’t wish you the excitement of watching your portfolio fall from a PE ratio of 24 to a PE ratio of 15. Therefore, think about rebalancing now before it’s too late.

    Introduction

    Yesterday we discussed how the economy is doing well but that the market isn’t responding accordingly. This is because of the high valuations where only exceptional catalysts can push the market higher while any kind of negative news easily brings it into negative territory. However, by analyzing recent earnings, we have found large discrepancies among sectors in revenue and earnings growth. We understand this is normal for a well-diversified portfolio, but do we have to own more of the overvalued stocks and less of the undervalued stocks as a market capitalization weighted index fund does? More →

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