Sunday Duty

Sun, 2017/02/26 - 2:14pm | Your editor

I just posted the tables on www.global-investing.com, as I do every Sunday. We have a new problem explained to paid subscribers belows, but meanwhile you can look at the charts showing our performance. Everyone can look at the closed positions but only paid subscribers get to see our current stock, bond, and fund picks. To view the spreadsheets more easily, use the "print" button even if you don't intend to print the tables.

 

Barron's while becoming less politically impossible about the Trump stock market rally, has seriously reduced its usefulness as a source of stock performance. While the weekly repeatedly tells us that closed-end funds are a great way to buy cheaply portfolios of stocks, and to intelligently buy bonds, there are no advertisements from the CEF companies. So here is what is happening:

1) The print size of the closed end fund data has been reduced to squint size and even with my reading glasses on I need to use a magnifying glass (provided by Value Line, for which thanks. Read more »

A Sergeant Writes

Fri, 2017/02/24 - 2:27pm | Your editor

I'm the canary in the coal mine. Yesterday my brokerage account access went down. Today the whole customer base lost access to e-trade accounts. This came less than a day after I published a special report for my paid subscribers about cyber-insurance. It is free to subscribers.

Some readers wrote about my Truman-Trump comparison yesterday. FN, of Long Island, himself a veteran (having made it to sergeant), noted that Truman served in the First World War despite being exempt because he was a farmer.

FN writes: “He volunteered. Starting out a private in the Missouri National Guard, he was elected by the members of his unit to be granted a commission. Election of officers apparently ceased before World War II. What is especially significant is that this was the first election Harry Truman ever won, from fellow soldiers who trained with him, ate with him, used the latrine with him. They picked him as their leader." It does make TRUMp look bad in comparison.

 

More for paid subscribers including the usual flurry of annual reports of the season, plus news from India, Britain, Ireland, Canada, Mexico, Brazil, Ireland, Switzerland, Hong Kong, and Euroland.

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Cyber Insurance

Thu, 2017/02/23 - 4:49pm | Your editor

This note on cyber insurance is for paid subscbribers only. Read more »

Trump and Truman

Thu, 2017/02/23 - 3:23pm | Your editor

It's one of those news-heavy Thursdays, so I am going to keep my commentary short. I had a sudden epiphany when I recalled the first US president who was considered unqualified for the job in my lifetime, and that of the current office-holder. It was Harry Truman, a haberdasher with a record of bankruptcies, who had never gone to college. His wife Bess preferred to stay in Independence, MO, rather than live in Washington, so their daughter Margaret handled some of the protocol.

It reminds me a bit of Melania Trump and Ivanka. And the two presidents' names start with the same four letters.

While not hiding his taxes, Truman won his Senate seat despite the Kansas City Democratic boss, Tom Prendergast, having been convicted for tax evasion. Truman as a Senator then headed a special “Truman
committee to cut wasteful spending during World War II. He got the vice-presidential job because the incumbent, Henry Wallace, was an extremist (on the left not the right, but you can't make everything fit.)

Then he won on his own in 1948 to the surprise of pollsters defeating an establishment Republican favored by the media.

Of course Trump did go to college but he majored in business. And unlike Harry Truman he is not a lifetime reader of history books. Moreover Truman's daughter married a member of the press, New York Times reporter Clifton Daniel, who was never accused of lying by her dad. Still, there is a parallel.

More follows for paid subscribers including annual reports from two countries, plus news from Colombia, Britain, New Zealand, Australia, South Korea, Indonesia, India, Denmark, Brazil, Finland, Canada, the Dutch Antilles, Hong Kong, Germany, Israel, Jordan, the Palestinian Territories,  and Ireland.

My access to my brokerage account broke down which is why this blog is late and incomplete.

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Putin's Trappist-1 Planetary Plans

Wed, 2017/02/22 - 1:55pm | Your editor

Bill Browder, the grandson of a Washington Heights neighbor Earl who was deported with his family to Britain for heading the CP USA when Donald Trump and I were children, today asserted that the President of Russia may have accumulated a fortune double that of Bill Gates, at $200 bn, in Swiss bank accounts. This was reported by IBTimes.com. Bill Browder ran the Hermitage Fund which invested in Russia before its lawyer was killed in custody. Now a movie of Browder's life is being planned.

Vladimir Putin meanwhile plans to rocket to one of the ecoplanets of Trappist-1, a nearby star, if he loses power and wealth. I am including this clickbait and lots of gossip today to get IBTimes to quote from www.global-investing.com/ 

Today while reading my newspapers I got shocks. Firstly, the Financial Times reported in its US tables that Comcast shares had lost half their value yesterday. I own the shares but they are purely USA so I don't watch their news and performance as part of my job.

The other shock was what I was asked to swear to when I went into my brokerage account at e-trade to check up on CCV. I was asked to agree not to republish any of the price data from the NYSE and the Nasdaq that I got from their website. While I signed, I need to consult my attorney. While I do not manage money or engage in advisory operations, I do check out stock prices when I write up a share (or bond) in this newsletter. While the price data is sold to professional investors by the markets—a way to make money—the delay between my getting the prices and your reading them here would seem to remove any violation of copyright.

In fact the CCV stock split 2:1, which only goes to show that the stock tables in the pink British newspaper are put together by mindless robots, as I have long suspected.

Violating copyright is not something I do lightly given how many times we had to go after readers who re-distributed a paid subscription for their own benefit or who reproduced our recommendations in other formats without attribution. I once went after the SEC for violating the copyright on our coverage of American Depositary Receipts, which merely resulted in our having our federal taxes audited for the following decade. They used the copy filed for copyright (when we were a print publication.)

However, given the inadequacy of the prices I get from e-trade (which requires that I use other sources to prepare our weekly performance tables) I think I'll wait till they come after me.

More from Europe and America and the rest of the world today.

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Fiddles from the Portuguese

Tue, 2017/02/21 - 2:13pm | Your editor

With apologies to Elizabeth Barrett Browning, today's lead articles are about Fiddles from the Portuguese. Today we learned that Brazil is having to import lower grade robusta coffee beans to feed its instant coffee roasters because Brazilian arabica beans would make the mixture too expensive. The lesson is that you should never be surprised at what happens in Lusitania, the parts of the world where they speak Portuguese. To keep the instant coffee cheap enough, they cannot use Brazilian beans although of course the labels will still read “Made in Brazil”.

Another example. The Portuguese central bank selected Lone Star, a US fund, as the final buyer of Novo Banco, created 3 years ago by the euros 4.8 bn bailout of Banco Espirito Santo. BES looted its customers with bonds whose proceeds were stolen and also took the cash of NYSE-listed Portugal Telecom, which we owned shares of at the time. BES's dominant Espirito Santo clan used a Luxembourg holding company to stash the ill-got cash. Under European Union rules the defrauded Portuguese who bought bonds, or the defrauded Americans who owned NYSE-PT could do nothing to extract assets in Portugal and Brazil held via Luxembourg, a tax haven.

Now, however, the Bank of Portugal is under the gun to sell down its 100% stake in Novo Banco to make sure that the state-owned bank doesn't offer better loan and savings products than the private banks it competes with. The European Union deadline is this August.

Novo Banco was bid for by Chinese outfits and other US hedge funds, and reportedly Lone Star came closest to taking control, offering to buy 65% of the bank for euros 750 mn on condition that the Portuguese government keep the rest and go on covering the bad debt and litigation risks left in their wake by the Holy Spirit oligarchs.

Lisbon's “Fed” is hoping to raise the price to euros 1 bn, still barely 20% of what the bailout cost it.

Neither Lone Star nor the Portuguese CB will comment publicly. The Social Democratic opposition party leader in a TV show revealed the current negotiations between Lone Star and the CB. To cover the Espirito Santo theft, the Portuguese Central Bank has to get permission from the EU, whose Commission is headed by a Luxembourger.

 

The common key in these two notes is that in Portuguese, things are not always what they seem. Another example from our portfolio follows for paid subscribers from Portugal, Brazil, Britain, Israel, Panama, Mexico, Spain, Finland, Norway, Germany, India, Finland, Israel, and Colombia.

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Sunday Update

Sun, 2017/02/19 - 1:40pm | Your editor

Having a long weekend ahead (Monday will be spent with family) I decided to improve our tables by seeking out obscure net asset value data first for US-listed funds (increasingly poorly covered by Barron's because unlike open-end and exchange-traded funds, closed-end funds tend not to buy ads.) But once on the hunt, I also found net asset value data for our oddball funds: REITs investing in India, Europe, and Mexico; British investment trusts; and a pair of Nordic holding companies. Note that some of the NAV data is dated, back to the close of 2016 or of January. So don't take action based only on the discount--or a premium.

More for paid subscribers follows from the stock and bond side of the portfolio including hot news which would otherwise have been written up on Monday, from Israel, Mexico, Canada, South Korea, Britain and Germany. Non-subscribers can tomorrow read Friday's edition at http://talkmarkets.com/content/global-markets/the-norsemen-and-mounties-are-coming?post=122810&uid=4662 Read more »

The Mounties and Norsemen Are Coming

Fri, 2017/02/17 - 3:54pm | Your editor

Today is a busy one because Monday is a public holiday celebrating two of our presidents, Washington and Lincoln, giving us a chance to take a break from their current successor's rants and raves against, among other fiends, the free press, of which I am a part. The markets are digesting big news, including a bid for Unilever by Kraft and, in our case, lots of quarterly and annual reports.

And with a holiday coming, equity traders are busily locking in some recent wow profits with sales, taking down the markets to take some money off the table, not just in Trumplandia, but world wide.

The dollar is down too, maybe because of terrifying press conference and the clear disarray of the current administration.

But we have to get busy with annual reports from our companies in Panama, Mexico, Israel, Brazil, and Germany—a full deck—and cover important news from other areas. There will be no blog Monday. We also have a new stock pick in anticipation of St. Patrick's Day, from Ireland. Plus an explantion  of my headline.

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Global Perils

Thu, 2017/02/16 - 2:07pm | Your editor

A yellow warning light was illuminated today by BofA-Merrill after Fed Chair Janet Yellen's Senate testimony yesterday and the day before. She said it would be “unwise” to delay interest rate increases as the economy grows more strongly. The Thundering herd now thinks that the probability of a Federal Reserve interest rate hike next month has risen to 44%.

The stronger CPI which doubled to 0.6% in Jan. from 0.3% in Dec. and the nice 0.4% Jan. retail sales growth figure, both out today, further increased the odds on a Fed move to tighten. Year over year, the consumer price index rose 2.5%, hardly signalling a need for more stimulus, even though half of the rise was the direct or indirect result of higher gasoline prices. It's the other half which is worrying the Fed, particularly the fact that men's clothing costs rose by a record monthly amount.

US 10-yr Treasury notes are now yielding 6 basis points more than at the start of this week, luring in more foreign and US investors who also are adding to the upward trend of bond yields and the lower trend of both the dollar and bond prices.

The impact on stocks is the reverse. Costlier money and a lower Greenback tend to drive down share prices.

Inflation is coming to my business too. Paypal (now a stand-along company) will increase its transaction fees for online purchases from 3.9% to 4.4%. Moreover products sold across borders—including newsletters like my subscription one—will incur fees of 4.5% to 5% plus 30 cents.

All these new charges go into effect March 29. To avoid them, subscribers should renew early, before the notices go out. Our system is smart enough to tack your new subscription on to the end of your old one. And if you have been considering becoming a subscriber, do it now to save money.

Since we also pay come of our non-US based writes using paypal, to keep our contributors happy we have to also pay the higher fees for some of them. More about the problems of going global below fore paid subscribers along with news from Panama, Sweden, India, Chile, Argentina, Spain, Finland, Germany, Canada, Britain, Spain and Japan, including a reporting company.

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I Am Honoured

Wed, 2017/02/15 - 2:42pm | Your editor

Having grown up during the fiercest period of the Cold War, I can appreciate that another 70-year-old might want to try to restart US-Russian relations. In fact both George W. Bush and Barrack Obama had the same idea. But the shambolic mismanaged Trump Administration has so poisoned the air that the chances of working with Putin have now actually been reduced.

Russia has gained little in the end with its secret violation of the Start Treaty (which the Obama Administration tried to deal with quietly.)

Putin has gained little with his likely authorization of hacking of the Democratic National Committee and Clinton staff emails.

The Kremlin has not won any points after the Obama decision to expel its diplomats did not lead to similar expulsions of US ones.

Trump no longer can reduce pressures on Russia to exit the eastern Ukraine or even Yalta.

Russia actually lost rather than gained from its illicit links to Trump supporters and future office holders, who will now have to be purged.

So unlike Pres. Trump I don't think Vladimir Putin is smart. I think he is a KGB-trained thug. Unlike in Russia, Stalinism doesn't work in a country with a free press and an active opposition and institutions which cannot be cowed by firing people. Which happens to include the USA, Germany, France, South Africa and a few other places where Russia is trying to influence policy with secret deals and covert payments.

Team Trump threatens everything from vaccinations to educating our young, from supporting national healthcare needs, to letting people regularizing their immigration status to green card holds to children raised in the US after they were illegal sneaked in by their parents avoid deportation or bans.

And apart from Russia and the Muslim World, the Trump Administration has done a lot of diplomatic damage in its short term of office to date. A senior Mexican economist at the respected CIDE institute now says consumer confidence there is so low that there is a 35% to 40% probability that Mexico will go into a recession, according to Raul Anibal Feliz. The unprecedented drop in Jan. will cause slow-downs in manufacturing and services for the local Mexican market, he warns. He predicts that in the next few months, without a reversal, Mexican growth will fall to between 0 and 0.3% annualized.

 

*In its Feb.10th issue, Investor's Digest of Canada named Global Investing as “Letter of the Week” for my writing about the new US Administration and its confused relationship with Canada and Mexico over NAFTA. I am honoured. More on Mexico and Canada follows in today's blog with news from our portfolio companies including an annual report, plus musings about Norway, Russia, Israel, Brazil, The Cayman Islands, Japan, India, Finland, and Sweden. And about Edelweiss.

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