Winnie and Vanity

Mon, 2017/07/17 - 1:41pm | Your editor

Over the weekend I had planned today to comment on the Chinese ban on mention of Winnie the Pooh, and on Weibo. This is because of an unflattering cartoon four years ago which compared the pudgy Chinese leader Xi Jinping with tall, slim Barrack Obama calling them Winnie and Tigger. Then in 2014 a cartoon showed Japanese Prime Minister Abe as Eeyore alongside a plump Pooh.

 

You are also now banned from making animated cartoons of the Pooh bear on Chinese sites. RIP is outlawed because it might refer to Nobelist Liu Xiaobo who died last week.

 

I was going to lead with this story about the renewal and extension of Chinese censorship which came out over the weekend from Asia, but it became front-page news in today's Financial Times, so I have been gazumpfed. As China moves toward its 5-year congress we are not allowed to comment on Xi's pot-belly and build. Or all Chinese leaders' dyed black hair.

 

It makes our own rather vain president sound almost rational.

 

McAfee virus protection is removing the warning notice on our website, www.global-investing.com which called our site “risky to visit”. However they did not say why it was placed there in the first place. Our site was long called safe by Norton—and it is. The reason we were targeted (without being given a chance to explain) is that they decided my blogs are spam. Given that they go out in full only to people who pay a real price for them, this is astonishing.

 

More for paid subscribers starting with a new stock pick today, and news from Australia, Canada, Britain, Israel, Australia, Argentina, Chile, and India.

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Sunday Tables

Sun, 2017/07/16 - 2:23pm | Your editor

Today we broke our routine and had lunch at a new South Indian thali joint which opened near here. It was better than the one we used to go to in New Delhi. I did my tables this morning but now am writing things up.

The main news is that with the dollar depreciating, almost every foreign stock is up, above all Canada and Mexico ones, because their interest rates are also going up like ours. And whatever their political risks are, they seem less threatening to markets than the perils of Donald Junior Trump.

Which is not to say that stock picking has no role to play. Today seven of our single stock picks are up in triple digits, along with a closed-end fund and an exchange-traded one, plus two real estate investment trusts, one for India. The REITs are not up based on their initial purchase prices but based on it plus their distributed profits.

More details for paid subscribers who are all celebrating too. Join them on their way to the bank by subscribing to our newsletter at www.global-investing.com/

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Faux Pas

Fri, 2017/07/14 - 12:52pm | Your editor

Happy Bastille Day! Pres. Trump is in Paris as the representative of the country which 100 years ago sent troops to France under the slogan: “Lafayette, nous voilà” or Lafayette, here we are! He managed two faux pas already, first complimenting Mme Macron (who is closer in age to Trump than she is to her husband, the French president) for looking so good, which translates as “être bien preservée” not considered a compliment to a Frenchwoman.

Then he stumbled some more in his tweet about “their failed Obamacare replacement approved” which put the adjective failed in the wrong place.

Which brings me back to gold. Your editor is not keen on buying gold to prepare for a stock market crash or a rise in inflation risk because these cannot be predicted based on past history. In economics, history tends not to repeat because everyone is looking at the same patterns.

My call is for investors to hold gold as a hedge against likely geo-political upheaval. Between the risks to his family members over the Russian involvement in his election win and potential loss of wealth, between his visible weight gain and distraction and loss of focus, there are real risks of something bringing the Trump Administration to a premature close. Having lived through Watergate I want an exit strategy.

As the operator of a blog on foreign securities I would normally expect that to offset US risks for my readers. But in case you haven't noticed, there are unexpected political risks in other countries as well. I am not talking about Venezuela or Zimbabwe or other long-term basket case economies. I am referring to normal boltholes for US investors in the Americas, Europe, and the Far East: Mexico, Canada, Brazil, Britain, Germany, Hungary, Poland, Italy, Israel, India, Hong Kong, South Korea, Taiwan, Malaysia, South Africa, The Philippines, all facing political crisis whether generated internally or in reaction to missteps by the US, the Fed, the European Union, North Korea, whatever.

 

More news today from several of the countries listed above including a quarterly report. Plus two stock recommendations.

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XYZ, Examine Your Zipper

Thu, 2017/07/13 - 12:22pm | Your editor

The FAZ.com website which broke the news that European Union sanctions against supplying the breakaway Crimea were being violated by Siemens through its Russian subs did it again. Finding two suspicious 90-ft blue-tarp-covered tubular cargoes at the port of Feodorova, the German daily tried to find out what was in them. The reporter was told: “We cannot talk about this. You understand, sanctions, Siemens.”

Under EU rules it is left to member countries to enforce embargoes and the largest industrial group in Germany seems to have evaded any controls via its venerable and profitable Russian affiliates. Which leads me to wonder why Britain is so keen to escape EU rules by negotiating to Brexit.

 

Today your editor would like to ask a certain Frenchman working in Britain to unzip his trousers, which certainly doesn't sound like me. But it is all in the interest of stock market research, I assure you.

More on this for paid subscribers follows along with news from Colombia, Israel, India, Mexico, Germany, South Africa,

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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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