Precious Metals

Mon, 2009/08/24 - 4:01pm | Your editor

      Analyzing data from the World Gold Council, Canadian brokers Desjardins help explain why the gold price has stalled below $1000 per ounce, despite recent economic upheaval. One would have expected investors to flee into the precious metal in a crisis. Gold after all is an alternative to paper money which is being created ad lib by central banks and governments around the world.

 

      But instead, gold just sits there. The failure of their predictions has led the community of gold bugs into warnings of evil conspiracies by nefarious cabals. But it may be that the failure of gold to take off is linked to its use as an industrial metal or a combination of store of value and mark of conspicuous consumption. Read more »

Down Nostalgia Way

Fri, 2009/08/21 - 3:26pm | Your editor

*Like your editor an ex-journalist, Canadian fund manager Michael Smedley is always fun to read. He wrote the following for Investor's Digest of Canada:
What I have bought personally this week are a few shares in the faded alternative-energy company that most readers will have forgatting and that is the former $120 gorilla, Ballard Power Systems Inc. (BLD-Toronto). I speculate on its resurrection from the $2 level on a modestly encouraging move into real fuel-cell business. The dream Ballard had about cars has gone and contracts have been announced recently for back-up units in power stations across India and with Motorola in Denmark. Ballard is not debt-affliected, appears to have systems that work realistically, and could see a couple of quarters with profits next year.” Read more »

Closed-End Fund Data

Thu, 2009/08/20 - 7:59pm | Your editor

As noted last week, you cannot get the full Monty Barron's outside the U.S., although some columns are on-line. The now-Murdoch weekly no longer will cover stock prices on the American Stock Exchange, or the Nasdaq (small-cap) Capital Market Listings. It will drop foreign stock-exchange data.

 

However, Barron's continues to cover closed-end funds (CEFs), with an unfortunate twist. The data will come out on Saturday not for the week that just closed, but for the prior one. It is now collated by fund guru Thomas Herzfeld Advisors from what fund managers send to the Investment Company Institute, the mutual fund industry, with a week's delay. A week is a long time on Wall Street. Read more »

Leaving London

Tue, 2009/08/18 - 8:03pm | Your editor

This is a double issue because we will not be publishing tomorrow.

I would rather be a lender than a borrower in today's market especially if I can get double-digit yields. We tell our paid subscribers how to achieve this below.

 

Meanwhile credit cards are dangerous. One big risk is that identity thieves can do a lot with your data. A Florida-Russia trio of hackers managed to steal the credit card details of about 130 mn people. Although the leakage was in the U.S., 10% of the victims were British and about as many others from other foreign countries. That's one danger.

  Read more »

The Afghan Fund and The Iraq ETF

Mon, 2009/08/17 - 9:28pm | Your editor

     In 40 years it will be the turn of Afghanistan and Iraq to become hot investment destinations for Americans. And there will be a closed end fund investing in Venezuela. But now the push is to Vietnam. The French after Dienbienphu had absolutely no interest in getting back into the Saigon bourse. They confined their interest in 'Nam to a consortium drilling for offshore oil into which Total invested.

 

     But G.I. Joe always likes to return to his messes with money with hopes to make out well despite the shambolic departure the last time roung.

  Read more »

Kurtz on China

Fri, 2009/08/14 - 9:40pm | Your editor

Michael Kurtz of Macquarie, the Australian brokerage, sent us a summary of his text from his opinion piece in today's Wall Street Journal Asia published as ‘Beijing Bubblenomics'. He wrote:

“Chinese policy makers have spooked markets into thinking they might soon take away the monetary punch bowl fuelling the local asset recovery. Fears of premature Chinese monetary tightening have also been stoked by recent improvements in the American economy: a China where exports are humming again wouldn't need to rely so much on its own housing market for growth, and thus could afford to reel in liquidity faster. Read more »

Different Strokes for Different Folks

Thu, 2009/08/13 - 2:35am | Your editor

           Different strokes for different folks.

           Today, on grandchildren orders, we walked by the River Lee and the canals of Bow to check on the construction of the Olympic facilities for 2012, when London will host the games. There is plenty of bustle but the structures are much less interesting than the Beijing Bird Cage stadium. But then, the British police will not be arresting their stadium architects to stop them from testifying in a court case against shabbily built schools as occurred in China.

            In fact, the Brits are protecting more than schoolchildren; they're saving the environment and protecting rosebushes and crab-apple trees along the towpaths and bike lanes around the new stadiums. We saw ducks and a heron amidst the metal cranes and dump trucks. Read more »

Vincent and Wuxi

Wed, 2009/08/12 - 7:41pm | Your editor

Yesterday I went to the National Gallery to view two exhibits, one on the restoration of Amor Vincit Omnia, a Titian painting, and the other on the roots of Impressionism, called Corot to Monet. I visited the Gallery Shoppe where I spotted a doll I cannot give one of the grandchildren. About 8 inches high, it shows Vincent Van Gogh, complete with red beard and blue suit. There is also a detachable ear, with Velcro to replace it. Yech.

This shlocky wonder costs GBP 18. It may be an example of British humor, but I found it off-puttingly cruel as well as overpriced.

Does monetizing government debt work? Should central banks continue to do it? From Nouriel Roubini, a comment on differing strategies by leading central banks: Read more »

Suffragettes for Windmills

Tue, 2009/08/11 - 7:43am | Your editor

Taking a clue from the suffragettes, environmental protestors chained themselves outside the home of Lord Mandelson in Regent's Park, London, to protest the closure of a wind turbine factory on the Isle of Wright (near Portsmouth). Two of the eco-protestors wore votes-for-women costumes and had to be cut from the railings by police. Mandelson, Minister of Business, was designated as deputy for vacationing Premier Gordon Brown and flew back from his summer holiday. He did not actually see the protestors. This tilting at windmills PR stunt affects one of our stock picks discussed for paid subscribers below.

 

Two Asia ipo's came to Wall St. last week, one for enterprise software maker CDC Software Corp. of Hong Kong, which raised $57.6 mn (CDCS.Q) and the other for analog chip maker Avago Technologies Ltd of Singapore which raised $648 mn (AVGO.Q).

  Read more »

Nihao, Bubble

Mon, 2009/08/10 - 8:08am | Your editor

Nihao, bubble.

From Kuala Lumpur, in an interview with Bloomberg, Templeton's emerging markets expert Mark Mobius warns that “probably this year” there will be a 20 to 30 percent correction in stock markets.

A correction is normal after markets have risen 50 or 60 percent, Mark says. The major market with the biggest growth this year has been the Shanghai composite, up 78% despite some profit-taking late last week. And Shanghai is the one worrying analysts, although Mark says he does not think it is “in a bubble”.

Others disagree, but not many stock market gurus are telling investors to find the exit in Chinese yet. As long as the music is playing, you may as well dance. But I think there are reasons for caution. I explained some of the statistical legerdemain behind China's extraordinary growth figures last week. For this, a Thailand-based subscriber berated me. But I am unrepentent. Read more »