Fashion Notes

Wed, 2017/07/12 - 12:35pm | Your editor

Today I am wearing my Lavender Hill Mob earrings, little Eiffel Tower images, in the hope that the boost to gold prices will continue after a 3rd rise this morning. The comedy movie was about British gold smugglers who wound up shipping real gold mini-Tour Eiffels to Paris along with thousands of fake ones.

If financial assets like gold reacted to price changes like goods, a higher price would cut demand for the yellow metal. But because investors like to follow the herd, a higher gold price can actually boost demand.

My Eiffel Towers are fake and so are the others I bought in London for my two granddaughters, who will get theirs at a family gathering this weekend to fete my husband's 80th Birthday. Lavender Hill, in London, is not very steep and easier to climb than the Eiffel Tower and the recent gold price rises are similarly feeble. I think we all need a bit of insurance against political and stock market risk, which gold provides.

 

Another fashion note. The sharing economy in Hong Kong now includes luxury handbags from Chanel, Gucci, Hermes, and Prada in Hong Kong. You can go to Dou Bao Bao (Show off your handbag, a website) and borrow a designer handbag, according to Lin Wanxia of AsiaTimes.com. I only would borrow Louis Vuitton bags myself because the logo looks my initials. Until they became too-too common I collected second-hand LV bags in Paris.

 

More today for paid subscribers from South Africa, Germany, Canada, Britain, Colombia, Denmark, Sweden, India, Germany, Brazil, Netherlands Antilles, Finland, and Hong Kong.

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Consumer Reports

Tue, 2017/07/11 - 2:16pm | Your editor

Beware of Amazon Prime Day, writes Rhett Jones of Gizmodo. Apparently our national champion on-line vendor uses this day to “offload the sh-t it couldn't sell”.

However I object to Jones focusing on the the Dishwasher Magnet clean-dirty sign. It is often difficult to tell if the dishes have been done or not. More consumer reports for paid subscribers below.

 

Being a news-hen by training I led my blog on Monday with the scandal over selling its power stations to the Crimea, the Russia-seized part of the Ukraine covered by a ban on sales from the European Community. The story was broken by the FAZ website which I visited to check up on another German company. Today the Siemens sale was the lede story in the New York Times business section and not covered at all because of fear of fierce British libel laws in The Financial Times.

 

However, the FT did manage to report that phone company Frontier Communications had risen 1429.88% yesterday. I own it in my IRA and, alas, it did not in fact go up at all. It has lost about 80% in value in the last 52-weeks and omitted its dividend, which I had bought it for. The jump was because of a 15:1 reverse split. Two rating groups I watch, Zacks and ValuEngine, take opposite views on whether it is worth holding.

 

I had to fight for an hour to get the new Fidelity research system to give me a proper gander at a Reuters-Verus report on Exxon Mobil, XOM, so it is pretty useless.

 

The quality of paid information seems to be breaking down but my rinky little newsletter, most of the time, is not powerful enough to fill the gap, unless I get an edge from foreign languages like yesterday. More for paid subscribers from South Africa, Hong Kong, Canada, France, Spain, India, Israel, Mexico, and Britain.

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Trump Russia Reset Is Redundant

Mon, 2017/07/10 - 1:53pm | Your editor

The Trump attempt to get get a “reset” with Putin in Germany was not only misguided but unnecessary. The reason is that Germany's leading company already has worked out how to avoid the boycott placed on Russia over its seizure of the Crimea and parts of eastern Ukraine, as revealed today by the Frankfurter Allgemeine Zeitung on its website in an article about Siemens. Europe's largest industrial manufacturing company has used joint venture companies in Russia to ship two embargoed electric power station equipment to Sebastopol, the main city in the Crimea and is now preparing to ship two further power stations to its second city, Simferopol. The power stations were made at Siemens Gas Turbine Technologies in St. Petersburg, which is 65% owned by the German firm and uses its technology.

The German conglomerate shipped the first Crimean power stations after the embargo by using a Russian joint venture with Rostec, a complex organization which owns civilian and military companies. While supposedly destined for Taman peninsula, the turbines were shipped to the seized Ukrainian territory in 2015. The rerouting caused problems for the jv, because the breakaway Crimean region could not pay for the power station and declared bankruptcy last Nov.

To overcome the problem, another Rostec-Siemens jv entered the breach, ZAO Interautomatika, in which Siemens owns only 46%. It funded and completed the Sebastopol power station installation and was preparing to ship another two turbines for Simferopol—until the press found out. Now this morning, after the FAZ article appeared, Siemens told Reuters it is taking legal action to prevent components necessary to commission the second power plant from being shipped to Crimea. An unnamed Siemens source in Berlin told the wire service that rerouting turbines for delivery to breakaway parts of Ukraine would be a breach of contract, but asked not to be named because the matter is still being investigated.

Siemens' slogan is “Ingenuity for Life”, but what this really means is “Ingenuity for Profits.”

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Don't think crime doesn't pay. Arconic missold to installers of cladding to the Grenfell Tower which burned down last month and its stock price fell. This led J.P. Morgan analyst Seth Seifman to rate ARNC outperform rather than neutral while cutting his target price to $28 from $30. Friday the share was at $23.13 so naturally the ethically-challenged stock market price of the share rose 2.9% bringing its YTD rise after it was spun out by Alcoa to 27%. I own ARCN and now am considering buying SIEGY.

 

After a fat-finger trade crashed the gold market, another on Friday crashed the silver market. This may be an argument for or against robotic trading. I am not sure which.

 

More for paid subscribers follows from Germany, Brazil, India, Spain, South Africa, Canada, Britain, Ireland, Israel, Japan, Chile Mexico, Bermuda, Russia, Argentina, Denmark, Sweden, and Australia.

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Why This Sunday Is Different

Sun, 2017/07/09 - 11:29am | Your editor

This Sunday is different from all other Sundays because I am writing another blog covering events during my trip to Europe, this time from snail mail rather than email. It is for paid subscribers only.

I think this is more important than updating the tables today. But if you check on the website later you will probably see the tables as well, but not till late in the afternoon.

Read on if you are qualified to! Or subscribe to www.global-investing.com to profit from our good performance!

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Resetting the Russian Relationship?

Fri, 2017/07/07 - 1:41pm | Your editor

Today Vladimir Vladimirovich Putin and Donald J. Trump managed to shake hands and greet each other without insults and shows of strength as applied when our president met his Australian and French counterparts. For the sake of world peace I hope that the re-set of US relations with Russia is not harmed because of Russia's likely interference in the US polling. Trump said it was “an honor to be with you” and Putin replied “delighted to meet you.” Then they went off privately.

A recollection from my youth hangs over the Russian-American summit today, the meeting of the younger US President, John F. Kennedy with Nikita Khrushchev back in the 1960s, where the US chief was outclassed by the experienced if vulgar Russian. This time we have the vulgar chief but of course he is also inexperienced in power plays compared to Putin.

For whatever it is worth, even without electoral interference coming up, neither George W. Bush nor Barrack Obama managed to improve US relations with Russia. The handshakes were followed by 2 hours of talks during which, according to Secy of State Rex Tillerson, Trump pressed Putin over his interference in the US election.

 

More (lots more) for paid subscribers follows from Israel, India, Canada, the Dutch Antilles, Mexico, Panama, Ireland, Poland, Switzerland, Guatemala (a first for us), Colombia, Bermuda, Britain, South Korea, and a partial stock sale. Next week our Martin will tell you what to be buying with the proceeds.

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I See Big Moves

Wed, 2017/07/05 - 6:17am | Your editor

I See Big Moves. It is not just the Korean ICBM that is worrying the world today; it is also the US and South Korean joint missile exercises in a show of power and riposte. The US Administration warned Pyongyang that our country can use a "full range of capabilities at our disposal against the growing threat.”

 

Asian markets apart from Japan plummeted creating a buy opportunity.

 

More for paid subscribers from around the world starting with China where the service sector saw slumping sales in June, hinting at slower growth. The Caixin purchasing managers index in June fell to 51.6 from 52.8 in May. Any level over 50 means growth but a lower level over 50 means growth is decelerating. This impacted our portfolio. Japanese shares rose today in relief at the US-SK reaction to the Kim Jong-Un missile threat, but other markets are worried. Pres. Trump was caught short after stating a few weeks ago that North Korean missiles would not be able to hit the USA; now they can. And the Stockholm International Peace Research Institute says North Korea already has 10 ICBMs with nuclear warheads in its arsenal.

 

We also have news from Britain, Ireland, Canada, South Africa, Finland, Japan, Australia, Denmark, India, Korea, Belgium, Sweden, Mexico, Germany, and Bermuda.

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Happyish 4th

Tue, 2017/07/04 - 6:29am | Your editor

This 4th of July we are celebrating another victory over Britain, because Post Holdings has acquired the favorite breakfast food of the British, Weetabix for $1.7 bn. The sellers were Bright Food of China and Baring Private Equity Asia. (I thought the House of Baring was bankrupt but apparently it is still functioning.)

But the Hessians are not as well contained, as both Lidl and Aldi, two German cheap superette companies, plan a comeback assault on the USA st starting with an Independence Day themed Lidl opening in the US heartland, not far from Valley Forge. Lidl is pronounced "little".

The worst news on this Glorious 4th is that North Korea, the nutter state, can now fling its Intercontinental Ballistic Missiles westward and hit the USA or at least Alaska.

Another glitch took over pricing of Nasdaq tech stocks after the early Monday close, and some winners like Alphabet and E-Bay were offset by big losers like Amazon and Microsoft. We need better tech for stock trading.

Because I am flying home on Thursday, you are getting a special edition blog today from London. We have news from Japan, South Korea, Israel, Ireland, India, Mexico, Singapore, Finland, Spain, Colombia, and Denmark.

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Happyish 4th

Tue, 2017/07/04 - 6:29am | Your editor

This 4th of July we are celebrating another victory over Britain, because Post Holdings has acquired the favorite breakfast food of the British, Weetabix for $1.7 bn. The sellers were Bright Food of China and Baring Private Equity Asia. (I thought the House of Baring was bankrupt but apparently it is still functioning.)

But the Hessians are not as well contained, as both Lidl and Aldi, two German cheap superette companies, plan a comeback assault on the USA st starting with an Independence Day themed Lidl opening in the US heartland, not far from Valley Forge. Lidl is pronounced "little".

The worst news on this Glorious 4th is that North Korea, the nutter state, can now fling its Intercontinental Ballistic Missiles westward and hit the USA or at least Alaska.

Another glitch took over pricing of Nasdaq tech stocks after the early Monday close, and some winners like Alphabet and E-Bay were offset by big losers like Amazon and Microsoft. We need better tech for stock trading.

Because I am flying home on Thursday, you are getting a special edition blog today from London. We have news from Japan, South Korea, Israel, Ireland, India, Mexico, Singapore, Finland, Spain, Colombia, and Denmark.

Read more »

Road Less Travelled

Mon, 2017/07/03 - 5:35am | Your editor

We walk the road less-travelled.

British fund management overseers are under attack for allowing the asset managers they regulate to overcharge by claiming to offer expert stock-picking, and in fact then to only passively copy an index. Moreover they charge high fees to small investors for their “closet tracking”, about triple what large institutions pay for the same portfolios. Fees are so high that the operating margins of fund managers listed in London is 36% compared to only 14% in sectors like technology or pharmaceuticals.

Of course they don't tell retail investors about the high hidden charges they are imposing or the kickbacks they get from index funds of other investment vehicles or the commissions paid to fund salesmen (called financial advisors) or the

The solution adopted by US investors is to put their money directly into an index fund to avoid expensive management fees. But stock market tracker funds really don't work better, particularly when they aim an a small and/or exotic section of the market. As money flows in and out they have to buy and sell often at the worst possible moment: they buy on exuberance and sell at despair, and of course also incur trading charges. So they cannot ever properly track whatever they “hot” idea they claim to cover: marijuana stocks; self-driving vehicles; artificial intelligence; 3D printing; checkpoint inhibitors—whatever the best-seller is today.

More for paid subscribers today about how we pick stocks here at www.global-investing.com. We run a team of writers who cover major markets and look for good stock ideas. They are independent, paid by us, not beholden to brokers or investor relations share boosters or fund trying to improve their performance by “sharing” their hot idea. We research what we write about and achieve success which most of the time (except under irrational exuberance) beats those indexes. We practice active journalism—and leave it to our readers to invest alongside us.

 

More today from Britain where the worst abuses of retail investors occur, starting with the comments of a leading fund manager whose shares we own, and then highlighting some of our picks which index funds ignore. Despite July 4 there will be a blog tomorrow but there will be a hiatus later this week when I fly home to New York

Sterling today is settling over $1.30 and this means British shares we own are gaining for US investors by more than the 16 points the FTSE 100 index has risen by. I think the dollar's fall is related to shenanigans by President Trump but I am prejudiced against him and in favor of the press, of which I am a member.


 

More for paid subscribers also from India, Switzerland, Denmark, Sweden, Germany. Colombia, Israel, and France, but mostly about Britain where I am right now.

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Bremain Again

Fri, 2017/06/30 - 7:02am | Your editor

The Queen's Speech is supposed to sedately set out the work of the forthcoming Parliament and voting is supposed to be a mere formality. But with the current Conservative majority hanging by a thread, and the Labour Party trying to figure out a coalition to take power itself, yesterday's vote was nothing like the stately ritual. PM Theresa May hustled back from Germany to cast her vote and gather her troops. She managed to get the Tories to vote against the lifting of a pay cap for government employees proposed by Labour—by enforcing party-line voting, although many of her own MP's supported easing the Tory austerity policies.

To allow Northern Irish women to benefit from the UK liberalization of abortion laws—which her Democratic Unionist allies oppose—May got the Tories to offer these women abortions without any charge in the rest of Britain. Until now British courts required that NI women pay for abortions which are banned in their own region..

The Opposition splintered even more seriously, because they are further from ruling. Three Labour frontbenchers (potential cabinet members) were removed for defying Jeremy Corbyn by calling for the UK to stay in the single market after Brexit. A Labour Party leader opposed to Corbyn, Chuka Umunna, offered an amendment to the Queen's speech opposing Brexit.Another frontbencher, Daniel Zeichner quit as shadow transport minister to vote for Bremain and stated that he was resigning "with great regret" but added: "My position on Europe has always been clear. I am a passionate pro-European and a straight-forward politician."

Corbyn said staying in the single market is not Labour policy and ordered his MPs to abstain. But about 50 Labour MP's rebelled against this order..

Of course there are other Bremain supporters in Parliament as well, the entire block of Liberal-Democrats, and perhaps another 100 Conservative members. As John Llewellyn wrote here yesterday, the odds are rising for a vote on whether to proceed with Brexit after all, in the form of another referendum or simply splits over the matter in the two largest parties.

 

As the quarter closes, stocks are down in China, Hong Kong, and Japan but up in India and Europe. The UK market suffered its worst loss since Jan. 2016 in June.

 

More for paid subscribers follows from Finland, Sweden, Brazil, China, Colombia, Bermuda, Japan, Hong Kong, Australia, Israel, Switzerland, Canada, Panama, Angola, Germany, and, yes, Britain.

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