Joe's Garden

Sun, 2009/08/02 - 2:49pm | Your editor

     A gripe, an apology, and 2 cheers from Paris. The apology first. Because I had problems with the plumbing in our London pied-a-terre requiring the ministrations of Warren the Oracle of Island Gardens (not Buffet but soon to be as rich), plus theater twice, I did not get to sell my own holdings of Groupe Aeroplan when I told you to a week ago. This was profitable because GAPFF gained as a result of helping bail out Air Canada, along withofficial bodies and GE, to the tune of C$ 150 mn. Some investors and analysts think providing funds to an airline is good for Aeroplan. I don't agree and will sell today. At 10 % more than the closed positions show. I always sell or buy after we publish but rarely so profitably. The plays were War Horses, in the West End, a wierd children's play; and a ghastly performance of Federico Garcia Lorca's Blood Wedding in a Fringe theater, to be missed at all costs.

     I want out of Aeroplan because I do not want to own Air Canada or subscribe toan airline's bottomless pit.

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Shanghai Shock

Wed, 2009/07/29 - 11:38pm | Your editor

         We have been riding the dragon with trepidation for the past 15 months and slowly easing out of our high-profit high-risk exposure to China stocks. Today in a late Shanghai sell-off, Chinese local shares fell by the daily limit of 5%. The p/e ratio on China shares remains an unsustainable 35 times.

         The recent spate of Chinese new offerings in my view is particularly vulnerable to sell-offs as the holders are inexperienced hot hands.

         Today other "BRIC" and emerging markets risk followed China down despite the fact that their economies are different. We have already seen a fall in India today after their central bank, the Reserve Bank of India, not only failed to further cut interest rates, but actually muttered about possibly raising them to fight inflation. Read more »

Phrom Phuket

Tue, 2009/07/28 - 11:39pm | Your editor

I continue to offend people. Yesterday, we sold a preferred stock based on yield data in The Financial Times, a serious if pink newspaper. As Frida Ghitis, who first tipped this share, pointed out, the FT numbers were wrong. Who can you trust if not the U.K.'s premier economic daily?

 From Phuket, Thailand, a screed from Paul Renaud, editor of www.Thaistocks.com: “Why not write more on the new world reality, the ending of Western dominance? Here are a few facts and quotes  which show far more then just mega-business is pulling ahead of the West.

 “On Science and engineering: 'By year 2010, 90% of all PhD holding scientists and engineers will be living in Asia.' So predicted Richard Smalley the late Nobel laureate in chemistry. Read more »

Manchurian Candidate

Mon, 2009/07/27 - 11:17am | Your editor

   On Friday, about 30,000 Chinese steelworkers clashed with police to protest over plans to merge their giant mill in Manchuria with another company and beat the acquiring company's general manager to death. They also destroyed three police cars and kept ambulances from entering the site to remove the wounded.

    The Hong Kong-based Information Centre for Human Rights wrote in a faxed statement that over a hundred people were injured in the clash in the northeastern city of Tonghua. Employees of Tonghua Iron and Steel Group rioted over plans for Jianlong Steel take control of the company. Beijing-based Jianlong had controlled the company temporarily last year, and the employees blame Jianlong for financial problems suffered at the time. Read more »

Stockwell Inquiry

Fri, 2009/07/24 - 10:40pm | Your editor

     Last night we went to the theatre in Clapham North to see “Stockwell: The Inquest”, a disturbing play about the police execution of Jean-Charles de Menezes, a young Brazilian electrician shot in the Stockwell Underground “tube” station the day after 7/7/05 (when Al-Qaeda terrorists attacked London Transport trains and buses.)

     On a bare stage, a small team of actors played various roles, witnesses, family, and a large number of befuddled and mostly unrepentant cops and officials. Menezes died because of very bad luck, having emerged from an apartment building which the police were staking out to grab the terrorist who got away, Hussain Osman, of whom they only had a poor photograph. He boarded a bus and then
descended at a Tube station (which was closed) and re-boarded, which the police took as a sign that he was using evasive tactics. Then he got onto the Underground at Stockwell Station, the very entrance that, according to surveillance cameras, all three successful terrorists had used the day before. (It is also my sister-in-law's underground stop.) Read more »

Bridget Jones

Thu, 2009/07/23 - 2:34pm | Your editor

Pres. Jacob Zuma probably did not expect an uprising in his first hundred days of office.

 

The riots are mainly about delay in providing houses and services like water and electricity to the populace. But they are also a reaction to corruption and nepotism in assigning the new homes. In Port Elizabeth, where things so far are calm, we had pointed out to us township houses which were being rented out by ANC big shots to whom they had been assigned illicitly, because the owners already had bigger and better houses.

 

South Africa suffers from extreme income disparity, measured by the GINI coefficient, comparable to that in the U.S. But the difference is that the poor are vastly poorer. Statistics show that 30% of households live in shacks or informal structures. About 40% of households to not receive refuse removal services. Twenty percent of households lack links to water or electricity.

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Solar Eclipse

Wed, 2009/07/22 - 3:30am | Your editor

It may be the impact of the solar eclipse in China and India today but

there is increased skepticism about emerging market shares.

Jim Rogers jr., my husband's buddy from Balliol College (Oxford) told

Bloomberg today that “China may be ahead of itself” with its fantastic

stock market rally this year. Jim has not bought any more Chinese shares

since last October, the service added. Jim, a former New Yorker who is

raising his young daughters in Singapore so that they can learn Chinese

easily, had been a perma-bull on China for years. Intrepid Jim famously

invests in frontier markets, which he reached in his younger days by

motorcycle, and more recently by a specially equipped yellow car. But he

is growing cautious.

Another emerging markets expert concurs. The spectacular rally in

emerging markets "looks like another bubble in the making" says Robert P.

Smith, author of "RICHES AMONG THE RUINS: Adventures in the Dark Corners

of the Global Economy."
 
Smith, founder of Turan Corp., a Boston firm specializing in trading Read more »

ADR Revival

Tue, 2009/07/21 - 9:55pm | Your editor

      American and global depositary receipt trading volume increased 14% to a record 72.1 bn in H1 according to The Bank of New York Mellon, a  leading depositary bank. However, because of the global downturn, trading in ADRs and GDRs by  value was significantly lower than records set one year ago, at $1.3 trillion.
       The number of available ADR and GDR stock traded rose by nearly 50% to 3,096 from 2,149 at the end of H1 2008. This resulted largely from changes in U.S. SEC regulations in October 2007 making it easier for depositary banks to establish unsponsored over-the-counter ADRS may not raise U.S. capital and have reduced reporting and audit requirements in most cases.
       Not all ADRs made money for investors of course. Particularly smaller obscure companies whose unsponsored ADRs were launched by the depositary banks are often a poor investment choice. Read more »

Back in London

Mon, 2009/07/20 - 6:25pm | Your editor

Our colleagues at BondsOnLine have published a summary of brokerage forecasts for the U.S. Stock market their David Landes gave me permission to share with you.

Wachovia Securities expects the equity markets to move up for at least the next 18 months, citing what it calls data streams currently being generated from the economy and the markets. It adds that the upside would most benefit the more cyclically sensitive issues, smaller capitalization issues and increasingly more value-oriented issues as time passes. Read more »

From Addo Elephant Park

Wed, 2009/07/15 - 11:20am | Your editor

Going on safari is great fun but the Internet doesn't work well. The elephants interfere with the vibrations when they hoot, according to Ella, 8. Actually the area under the electric lines is particularly rich in minerals that the animals want to eat, and they often do congregate there.

 

Another feature of safari life is sex. Don't look children at what those lions are up to. Humans are also heavily involved in the process, and every time we visit the ladies' room we can pick up free condoms. There are two varieties, the normal male kind, and another which is new to me, a sort of baggy horrow that the woman wears inside what Ella calls her privates, which keeps the male happier, I believe.

 

Anyway, here is good news from China before we return, for paid subscribers only, to sex.

 

Investors who thought they could buy in cheaply may be intrepreting China developments wrongly, write Michael Kurtz of Macquarie Research (Australia). He thinks there is limited downside.

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