Vacation issues

Fri, 2017/08/11 - 1:38pm | Your editor

As a result of August when people go on holiday and the fact that my contractor-webmaster is starting a new full-time gig next month, I am not sure that the problems with delivery which hit Thursday's issue have been resolved. So I would be grateful if readers would just visit www.global-investing.com to view the Friday edition because the emails may not be going out from the webhost.

thanks for your understanding, the technically challenged editor

Guns of August

Fri, 2017/08/11 - 1:33pm | Your editor

Instead of internet investors China has unleashed internet investigators in a crackdown on social media sites which are violating its cyber laws. This is to keep Chinese netizens behind the Great Wall to block any access to subversive content not in compliance with communism or the ambitions of the current leadership. Beijing is deliberately hiding its real crackdown on ideas by claiming that websites are addictive or allow financial fiddles. China's internet overseers charged chat-rooms with “spreading violence, terror, false rumors, pornography and other threats to national security, public safety, and the social order”. Public safety is a buzz word for me.

The chat-room crackdown's real purpose is to block ideas which question the official government line. It also protects from exposure the corruption by relatives of present and past top leaders, including Pres. Xi Jinping the ruler over the regulator. Robespierre during the bloodiest days of the French Revolution also claimed his Jacobins were operating a “committee for public safety” which ultimately guillotined political opponents who dared to publish criticisms of the terror.

Later this year Xi wants to consolidate his power at the 19th Communist Party Conference, so he wants to get potentially subversive opposition chat off the 'net. Cyber security is a cover-up for thought control. The targeted websites, WeChat, Weibu, and Tieba are run by private sector groups like Baidu (BIDU) or Sina or Tencent (TZTCF).

More on what this means for our portfolio is explained below for paid subscribers. We have news from Hong Kong, South Africa, Canada, Bermuda, Germany, Brazil, Canada, Israel, Ireland, California, Australia, Finland, Mexico, and Britain. And even a couple of company reports and updates on them.

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Brokerage Problems, Thursday resend

Thu, 2017/08/10 - 5:37pm | Your editor

I have finally extricated myself from the clutches of Fidelity which will send the proceeds from the forced sale of my holding in iShares Floating Rate C$ ETF, XFR-Toronto, to my new Schwab account. I will cease coverage of this holding as it is not legal for US folks to own it without filing an onerous Passive Foreign Investment Company report. It was because of this that I could not transfer my holding to any brokerage account and while Fidelity offered to issue me with a share certificate for a mere $100 it would not have avoided the PFIC issue.

My readers told me about other issues with this brokerage. One who had been with Fidelity for ages found that he was being denied the ability to pick which stocks were being sold to minimize taxes. All trades were being done first-in-first out (to avoid short-term gains or losses, in theory better for taxpayers). For capital gains tax reasons however, he wanted sometimes to have the trades done last-in-first-out but could not get the brokerage to do this.

A sophisticated investor who holds Hong Kong shares in a Fidelity account found that the daily prices from when Hong Kong is open did not port to his account after the close, so he could not value his portfolio during normal US waking hours, in the same time zone as I am in. I advised both readers to write to Abigail Johnson who heads the firm. If any other paid subscriber needs to do this I will provide her email and snail mail address, which I have because the company used to subscribe to my newsletter

 

Meanwhile my own global investing account while in existence does not yet show my non-Canadian F share positions, so I also have problems spotting what I have to look into during my waking hours. This Schwab move also creates a problem with a stock I watch closely discussed below.

 

Today beside the XFR matter I had to cover lots of news so the blog is late.

 

More for paid subscribers follows from Brazil, Canada, Israel, Mexico, South Africa,India, South Africa, Belgium, Denmark, and Australia including the usual Thursday overload of  quarterly reports.

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Nuclear Winner

Wed, 2017/08/09 - 2:17pm | Your editor

Having lived in France for many years while dependent on power generated in its nuclear plants along the River Loire, I am an authorized atom supporter. France has to spend money to upgrade these venerable plants, but there now seems to be a push to do so even if it means building an atom power plant in western England which will probably have left the European Union before it comes on stream.

The era of no-atom power has come to an end also in the only country run by a physicist, Germany. Its supreme court has ruled that its ban on electricity companies using nuclear energy is unconstitutional and has forced the tax authorities to reimburse fines imposed on the power generating sector. Since Germany has a huge budget surplus this will not hurt its accounts—but it just may help the world become more green. While many people are terrified of atom power given the Chernobyl disaster, in fact far more people die annually because of filthy air from coal-burning plants than have ever died because of atom disasters, not just in Chernobyl in the former Soviet Union, but also at Three Mile Island in the US, and in Japan's Tepco meltdown.

 

PM Merkel in 2011 (despite knowing better) backed a law requiring that operators of nuclear plants pay for shutting them down and dealing with nuclear waste

 

This will have important consequences on our portfolio. And on a new addition to it today. We have news from Canada, Colombia, Germany, Israel, Finland, Iceland, Denmark, Spain, Sweden, India, and Britain.

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Jimmy Carter II

Tue, 2017/08/08 - 1:08pm | Your editor

Russell Jones writes from London:

The dollar has depreciated by some 7% so far this year. The US currency’s weakness coincided with a growing sense of chaos and ineptitude where the Trump Administration is concerned. This has evoked a previous episode of dollar decline that went hand-in-hand with poor policy-making, low Presidential esteem, and fading respect for the US – the late 1970s, during the Carter Administration. How close are similarities between the ‘Carter Dollar’ and the ‘Trump Dollar’?

The macroeconomic circumstances facing Donald Trump today could not be more different to those which confronted Jimmy Carter. Rather than stagflation, the US economy is today in reasonable balance. Growth is running around potential; employment is near-full; inflation is a little below the Fed’s 2% target, but expected to return to it before long; and the external deficit is modest and stable. The Misery Index is historically low.

What is similar, is Trump’s positioning of himself as a disrupter of the Washington conventional wisdom; the President’s increasingly dysfunctional relationship with Congress and his own party; the sense of policy and personnel mismanagement that surrounds the White House; the maladroit manner in which new initiatives are communicated; and the damage that inflicted on the US’s global reputation and leadership by the impulsiveness and controversial tone of US economic and foreign policy. Once again, the talk is of the US losing its way and the demise of the Pax Americana.

For all his failings, Carter had redeeming features that Trump lacks. Carter had a proven track-record as a successful politician, serving as Governor of Georgia from 1971-75. He was a compassionate, hard-working, dedicated, and God-fearing man; qualities that often seem anathema to Trump. Carter was a respecter of the office of President, of the other institutions of government, and of the 4th estate. He was a fiscal conservative, who eschewed large budget deficits, and acted to veto pork-barrel projects favoured by his own party.

Even as the economy collapsed back into recession and his chances of re-election evaporated in 1980, he refused to resort to protectionism, turning down the pleas of the major automakers for restrictions

on the importation of foreign cars, while declining to bail out Chrysler and beginning the process of deregulation since associated with his successor, Ronald Reagan.

Vivian adds: and of course he appointed ultra-hawk Paul Volcker to the Federal Reserve. Jones writes for Llewellyn Consulting, www.llewellyn-consulting.com

More for paid subscribers from Hong Kong, Britain, Australia, South Africa, Britain, Israel, Spain, Ireland, India, Mexico, Brazil, Finland, including a half yearly report.

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Back to Emerging Market Stocks

Mon, 2017/08/07 - 2:45pm | Your editor

We have returned to an old favorite sector today, nudged by the Wall Street Journal, emerging market stocks. Why? There are a host of reasons starting with the declining dollar and the robust global economy.

Third world countries gain from commodity demand and from lower borrowing costs in US$s. However they also gain from their own internally generated growth in consumption, the major trend in the 21st century which is different this time.

Thus despite the macro factors YTD going against them (at least according to theory) the well-managed contingent of emerging market corporates, including (oops) banks, have performed well year to date. Mark Mobius, the emerging market guru of the Templeton Group, used to say that he avoids companies favored either by “bancos or planos” but that was based on 1970s parameters in a different era.

But the main reason for grabbing at emerging market shares—not all of which have to be based in countries designated as being in the grouping—is that they increase our diversification level.

Too many shares in the developed countries of North America, Europe, and Japan are no longer appealingly bargain-priced. You have to look more widely. Today we do so.


We also have news from Japan, Mexico, Israel, Britain, Canada, Brazil, Denmark, South Korea,South Africa, Australia, Argentina, Chile, China, Hong Kong, South Korea, and Japan and a batch of emerging markets.

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Delayed

Sun, 2017/08/06 - 2:17pm | Your editor

Today's portfolio performance tables were delayed by two obstacles soI am still working after lunch. Firstly, Barron's, the weekly I rely upon to get Friday closing quotes decided that it doesn't need to provide prices for preferred stocks any longer and dropped coverage.

Then my website, www.global-investing.com was the subject of a silly hack attack so I didn't risk sending innocent people to log on until I removed the filthy content. It is posted on a female-run website out of misogyny, I expect. The last hack put a picture of a topless blond where mine is supposed to be in outgoing e-mails. Of course it is better here than it might be in Saudi Arabia or Pakistan, for which of course I am grateful. But the trend is not my friend.

As I am between webmasters as Andrew is being hired full-time by the local university for which he now does gigs he will no longer be contracting for me. I am interviewing for new webmasters and I happen to suspect that one of them posted the sex offers on my website and will try to find the culprit lest I hire a male chauvinist pig.

As for the shortcomings of Rupert Murdoch's publishing empire, I suspect he is finding that his pockets are not deep enough to continue Barron's as it used to be, a journal of record for stock markets. The weekly now has added earnings and dividends to its stock tables and had to find something else to remove to avoid printing more pages than its ads will support. As a relative newbie at Schwab I needed help from their support staff in finding all I needed on their site.

More for paid subscribers follows:

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Update on Deals and Funds

Fri, 2017/08/04 - 12:42pm | Your editor

Yesterday the embattled Persian Gulf country of Qatar managed to publicly defy its adversaries like the Emirates and Saudi Arabia. According to AsiaTimes, a website, it did this by writing a very large check. This was to secure the transfer of Neymar, a talented Braziliansoccer player, from Barcelona to Paris-St-Germain, which is owned by Qatar. The fee for moving the “forward” was euros 222 mn, about $265 mn, more than double the previous record for purchase of a soccer player. Of course it is better than starting a war.

More for paid subscribers follows from the Middle East, Britain, Canada, Israel, Ireland, Germany, Canada, and the USA.

*We got what is probably our final half yearly result from Kennedy Wilson Europe, KWER

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A Truly Terrible Thursday

Thu, 2017/08/03 - 12:55pm | Your editor

It's another one of those busy Thursdays with too many companies reporting for comfortable coverage. Before getting into the nitty-gritty, let me comment that I have formally applied for a “global investing” separate account from Schwab and will let you all know how it goes. I also told the firm's meeters and greeters that failing to look over the nature of my holdings before giving me a supposed 500 free trades which weren't free at all is a PR disaster for the firm.

This morning I was called by a man from Schwab assigned to tell me the 500 free trades would not apply to foreign securities which I already knew was the case, and then telling me they would cost $34.95, which I believed was not the case. He had no idea I had applied for a Schwab Global Trading account, and said it had not been turned down when I said I would have to leave Schwab if that was the case. Another PR disaster for the firm.

We have a new buy and a new average down pick today plus news from Mexico, Canada, Ireland, Israel, Colombia, Switzerland, and China.

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More on Schwab Fees

Wed, 2017/08/02 - 12:50pm | Your editor

Your editor is still working out how to trade global shares without bankrupting herself on the Charles Schwab platform. As I noted yesterday, I was hit with a whopping $54.95 fee for my sale of what had been a doubled stock recommended by Martin Ferrera for sale. Martin lives in Canada, and previously lived in Zimbabwe, Australia, and Britain, and is an EU national. We have other reporters around the world who also are multinational with brokerage accounts not accessible to US residents or nationals, like boom.com which sent me a 30 page questionnaire when I followed our former China correspondent's suggestion that I open an account in Hong Kong.

Your editor is a US citizen and resident who essentially has to trade shares and supply a 1099 to Uncle Sam showing her interest and dividends, and capital gains and losses. Recently foreign banks and brokerages are quick shut the door to us because of the costs and risks of having any red-white-and-blue clients on their books. That makes my experiences similar to those of the great majority of our readership, who are also US persons, although of course we have plenty of exotic readers as well

When Schwab told me I was being awarded 500 free trades in the next year when I moved my account they did not spell out that only fully listed US companies were on offer. Pink sheet or grey market stocks, like Renishaw sold via my second trade with my new broker turn out to result in huge fees. I wrote $55 in my note yesterday but Schwab is behaving like a supermarket selling something at $9.99 in the hope that I won't notice the huge bite.

Having the right to “satisfaction” with trades under the house rules I expressed my extreme dissatisfaction to my relationship manager and the trading desk. They may reimburse part or all of the fee this once. But going over my holdings—more or less our model portfolio accounts for about half of them—the brokerage warned that the shares ending in F would incur huge fees if I sold—or bought more.

I then visited the company website and discovered that they have a program run out of Indianapolis which is called Schwab Global Investing specially geared to those who read and follow the blog of the same name which I run. I learned that this offers users the right to trade in Britain; Hong Kong; Sydney; Tokyo; Norway; and European Union markets in Belgium, Finland, France, Germany, and Italy. The brokerage bite is reduced to about $20 per transaction (the amounts are fixed as £9; HK$200; A$32; ¥2000; NOK 160; and Euros 19). In addition, Schwab charges 0.15% of the total value of the trade as a commission, a mark-up or mark-down.

So I told the guy in Indianapolis to sign me up. He is supposed to send me a form via emai. or  I go to their local office after work today and ask them.

 

More today from Hong Kong, Israel, Finland, Britain, Switzerland, India, and Japan, starting with a half year report from a company we like.

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