Mobius: Positive on Commodities, China

Monday, September 1st, 2008

Mark Mobius, executive chairman of Templeton Asset Management, is very positive on commodities, especially integrated emerging markets oil companies including Chinese and Indian energy firms like Reliance. He shares his views with CNBC’s Martin Soong and Sri Jegarajah.

click to view video

“China’s Still a Great Investment”

The long-term story in China is still very bright. And investors should take note that H-shares are currently trading at a substantial discount to their A-share counterparts says Mark Mobius, executive chairman at Templeton Asset Management. He also goes further afield to say that Russia is in a sweet spot,  that Putin has done all the right things for Russia and comments positively that Russia’s diplomacy in the Georgia affair has far reaching foreign relations benefits.

Tags: China, Commodities, Gold, Iron Ore, Mark Mobius, Metals, nickel, Oil & Gas
Posted in Agriculture, BRIC, Brazil, China, Commodities, Emerging Markets, Gold, India, Infrastructure, Markets, Oil & Gas | No Comments »

Commodity Snapshot

Saturday, August 30th, 2008

Below we provide Bespoke’s trading range charts of ten major commodities.  The green shading represents two standard deviations above and below the commodity’s 50-day moving average, and moves above and below indicate extreme overbought and oversold levels.  It’s no news that commodities have suffered major pullbacks over the last two months, and the charts below provide a good view on how bad it has been.

After trading at the top of its range for what seemed like forever, oil finally traded to the bottom of its range late last week, and after touching extreme oversold territory, it finally bounced for a couple of days, only to see big declines again on Friday.  Like most other commodities, natural gas unfortunately hasn’t gotten a bounce.  Since touching 13.58 in early July, nat gas is down 42%.

While gold declines from $1000 to under $800 make the headlines for precious metals, platinum and silver have actually gotten hit harder.  From their peaks, silver has fallen 38% and platinum has fallen 40%.

Corn, wheat, orange juice and coffee have actually staged some pretty good rallies off of oversold levels over the last couple of weeks.  Wheat almost touched overbought territory last week, but all four are still well off their highs earlier this year.

Tags: coffee, Commodities, Metals, Oil and Gas
Posted in Agriculture, Commodities, Crude Oil, Gold, Oil & Gas, energy | No Comments »

Horizons BetaPro Bull Plus and Bear Plus ETFs

Friday, July 11th, 2008

Canadian investors looking for the equivalent of the popular Proshares which are available on American exchanges can do so via Horizons BetaPro ETFs which trade on the TSX. These ETFs allow investors with long-only accounts to easily bet against the market or hedge their bets.  The Horizons BetaPro ETFs provide either double or double the inverse of the daily returns of the asset classes they track.  In the current market environment, the HBP Financials Bear Plus ETF (up 31.4%) and HBP Nymex Crude Oil Bull Plus (up 113.8%) have been huge winners.

Below is a listing of Horizons BetaPro ETFs and their YTD returns. YTD returns are not available for the funds launched this year.

Tags: Agricultural Grains, Bear Plus, Bull Plus, ETF, Financials, Horizons BetaPro, Howard Atkinson, JovFunds, Mining, Natural Gas, Nymex, Proshares, S&P 500, TSX 60, ultrashort, US Dollar
Posted in Agriculture, Canadian Stocks, Commodities, Crude Oil, ETF, Emerging Markets, Financials, Fixed Income, Gold, Markets, Oil & Gas, US Stocks, mining stocks | No Comments »

Hendry: Financials “Infected” by Bubble

Wednesday, July 2nd, 2008

Hugh Hendry, CEO, CIO, Eclectica Asset, guest hosted European Squawk Box this morning. A very informative interview with a bold discussion on what’s ailing the financial sector, and where Hendry, one of the UK’s top performing and most outspoken asset managers, is investing today.

Segment 1: http://www.cnbc.com/id/15840232?video=782713231

Segment 2: http://www.cnbc.com//id/25490573, includes CNBC Europe.

Hendry also sees few signs that the outlook is picking up for the US economy.

“I think we have to recognize the recessionary forces that are bringing to bear,” Hendry told CNBC. “Don’t fight that, just go with the flow of the relative momentum.”

Hendry said the outlook is particularly bleak for financial and technology stocks — the two largest components of the S&P 500 — which he said have both seen a bubble.

“When a sector becomes infected by a bubble…what history reveals is it takes 25 years to regain the highs that we saw in real terms,” he said.

 (click on image to see video)

Hendry took the view that in a sustained market downturn, successful investing requires looking for more unconventional assets such as agriculture that have the potential to outperform the market.

“I think the most important thing to know is you don’t have to short this market,” Hendry said.

“If you want to stay involved the most important thing is make sure the stock you own is trending higher vis-à-vis the marketplace.”

This is one of the best interviews we’ve seen in a long time.

Tags: Agriculture, Commodities, Gold
Posted in Agriculture, Commodities, Credit Markets, Financials, Markets, Strategy | No Comments »

Where is the Boom, and the Doom?

Tuesday, July 1st, 2008

July 1, 2008 - The first half of this year has been chaotic and confusing for investors given the Subprime fiasco and rapid deterioration of fundamentals in the Banking and Finance sectors, the secular selloff in stocks globally, recession in the US, and soaring oil and commodity prices.

US Global Investors, an American mutual fund company, founded by Toronto native, Frank Holmes, interviews Dr. Marc Faber, author of the Gloom, Boom, and Doom Report, for 1:15 hrs in this highly informative webcast (courtesy of Investment Postcards) aptly titled, “Where is the Boom, Gloom and Doom?”

Please click here to listen to the webcast.

Source: US Global Investors, June 27, 2008.

Tags: BRIC, China, Commodities, Emerging Markets, Frank Holmes, GDP Growth, globalization, GloomBoomDoom, GreenLightAdvisor.com, India, Infrastructure, Marc Faber, oil, urbanization
Posted in Agriculture, BRIC, Brazil, China, Commodities, Credit Markets, Eastern Europe, Emerging Markets, Financials, India, Markets, energy | No Comments »

Derek Webb Interview, Part 1 - Outlook and Investment Strategy

Tuesday, May 13th, 2008

May 12, 2008 - GreenLightAdvisor.com recently interviewed [Part 1] Derek Webb, Portfolio Manager, Webb Asset Management. Here are some excerpts from Part 1, in which Mr. Webb shares his outlook and his thoughts about how he trades in volatile and range bound markets. Here are some excerpts:

Regarding the Fed’s recent moves…

Anytime the Fed puts this much liquidity in to the system it’s like blowing into a pipe; all that pressure has to go somewhere—When the Fed drops hay bails of money out of the helicopter, those hay bails of money are like molecules. They have to attach themselves to something.

When you look at the huge amount of money put into the system because of the Long Term Capital Meltdown and Russia—now that liquidity event created the internet bubble. This is no different.

All of this liquidity is going to find a home. I’ll tell you that I think it’s finding its home right now. Fundamentally I am very bullish because of all this liquidity.

On his investment focus…

Through our quantitative homework we found that the delta or change in earnings is the only thing that’s predictable in terms of determining the direction of a stock’s price. That’s all we focus on; that’s all our research focuses on. So, where is that delta accelerating right now—it’s in commodities. Agriculture is number one, Oil and gas are number two, some base metals number three, like copper—The shine has kind of come out of precious metals in the short run, but I don’t think that trade’s over, I think it’s more of a seasonal thing right now.

On when to sell:

[Firstly], If we saw one analyst lower EPS forecasts for Potash, for example, WE WOULD BE OUT. Analysts are out there doing site visits. They’re doing their homework – as long as they’re raising their numbers we’re going to be long. As soon as we would see them hold steady or lower their numbers we would be out.

Secondly, if the earnings themselves just start to de-accelerate, meaning we are looking at a smooth line of earnings, not to get complicated, but we look from 3 quarters ago out to the next quarter and if that rate of change de-accelerates were out.

Thirdly, one negative earnings surprise and we’re out.

And lastly, if the relative strength indicator of the stock de-accelerates were out.

We’re ruthless on all our positions.

And lastly, if the relative strength indicator of the stock de-accelerates were out.

PART 1: Derek Webb Interview, GreenLightAdvisor.com.

Visit Webb Asset Management for more information.

Tags: Agriculture, bifurcation, Derek Webb, Fed, Investment Strategy, liquidity, Markets, Metals, Monetary Policy, Oil and Gas, Webb Asset Management
Posted in Agriculture, Banks, Canadian Stocks, Commodities, Credit Markets, Crude Oil, Economy, Financials, Gold, Markets, Oil & Gas, inflation | No Comments »

Don Coxe’s Recommendations (Basic Points, 04/29/2008)

Monday, May 5th, 2008

May 5, 2008 – Here we feature the recommendations of Don Coxe, BMO Capital’s Chief Investment Strategist. As usual, his paragraphs are eloquent and provide significant guidance.

Don Coxe’s Investment Recommendations,  excerpted from Basic Points, The Hinge of History II, April 29, 2008

1. In long-only equity portfolios, continue to underweight Wall Street banks and others that have been reporting high exposure to perfumed products of indeterminable value, including those which last year revealed—under duress— high exposure to SIVs. Within the financials, emphasize those whose loan losses are of the traditional, cyclical variety—not in derivatives or in untraditional banking businesses. Good banks that have stuck to their knitting—and whose CEOs compensation has suffered along with their stock prices—should be retained.

2. In long/short portfolios, be long commodity stocks and short bank stocks that make headlines for untraditional losses. That trade hasn’t been working lately, but it remains an overall portfolio risk-reducer. The list of banks that have shown great skill and profitability by going heavily into new kinds of products and new kinds of accounting is roughly as long as the list of major copper, oil and gas producers that profited by selling heavily forward.

3. A financial-led bear market within a financial-led recession can be particularly perilous if central banks run out of ways to reflate the system—and surprisingly benign if the central banks’ rescues remain timely. To date, the central banks have been up to the job—if propping up a badly-behaving financial sector is a key component of their job descriptions. Result: the overall stock market has outperformed our expectations. We still don’t like the risk/reward ratio.

4. Dividends become more attractive as central banks cut rates. The problem for investors is that many of “The Great Dividend-Paying Stocks” are financials that have been reporting ghastly blunders. In many cases, their payout ratios have climbed far above the 50% threshold that has made these stocks better investments than bonds. Opportunities remain—and dividends may be the only positive return most US stocks will deliver this year.

5. Although North American consumers have yet to see the cost pass-through in major foodstuffs of $6 corn and $8 wheat, it will come sooner or later. Based on past periods of food inflation, one of the first consumer cutbacks is on eating out. Restaurant stocks are especially unappetizing when food costs soar out of control.

6. Gold has pulled back from its high because the dollar stopped falling and the bank bailouts seem to be working. Remain overweight gold as a clear-cut hedge against further bad news on both those fronts.

7. The Canadian dollar decoupled from the euro, failing to rally to new peaks—which makes little sense to us. US clients should continue to use Canadian government bonds and Canadian short-term investments as alternatives to Treasuries and US cash.

8. Within the commodity group, continue to accumulate the leading agricultural stocks. Given the spectacular performance of the fertilizer stocks, the best bargains currently on offer are in the farm machinery companies. The global food crisis will almost surely cripple the opposition to GM seeds, which means the seed stocks have great upside room.

9. Within debt portfolios, continue to emphasize inflation hedge bonds—preferably in strong currencies. Treasuries remain overvalued, despite the recent strong run-up in yields from barely-observable levels.

Tags: Agricultural commodities, Agriculture, Bank stocks, BMO Capital Markets, Commodities, Donald Coxe, Emerging Markets, energy, Financials, Grain prices, Investment Strategy, Markets
Posted in Agriculture, Banks, Commodities, Credit Markets, Crude Oil, Economy, Financials, Fixed Income, India, Markets, contango, energy, gold stocks, inflation | 1 Comment »

Jeff Rubin: The Age of Scarcity (04/24/08)

Wednesday, April 30th, 2008

April 30, 2008 - CIBC World Markets Chief Strategist, Jeff Rubin, says that Oil will eventually reach $150/barrel in 2010 and over $200/barrel by 2012. He cites among the leading reasons, the advent of cheap cars from India and China, or rather Tatas and Cherys, that will enable millions of middle class Asians who couldn’t previously afford a car, to do so, Take these developments and place them agaisnt the backdrop of peak oil and a decline in oil exports from key suppliers, Saudi Arabia, Russia and Kuwait, and we are in the midst of a long term supply/demand imbalance. Here are couple of excerpts:

Whether we are already at the peak in world oil production remains to be seen, but it is increasingly clear that the outlook for oil supply signals a period of unprecedented scarcity.

Our latest review of probable supply suggests oil production will hardly grow at all, with average daily production between now and 2012 rising by barely more than a million barrels per day (see pages 4-7). Despite the recent record jump in oil prices, the outlook suggests that oil prices will continue to rise steadily over the next five years, almost doubling from current levels.

While global oil supply is not growing, global gasoline demand is, and will continue to grow as cheap cars from Tata and Chery dramatically cut barriers to car ownership in the developing world. Millions of new households will suddenly have straws to start sucking at the world’s rapidly shrinking oil reserves.

Car purchases in Russia, for example, are exploding as US sales stagnate (Chart 2), while in India the advent of the Tata Nano, a car that will sell for as little as US$2,500 will allow millions of households in the developing world to own automobiles when they otherwise could not. It is the savings necessary to buy a car, not the price of gasoline that poses the greatest obstacle to fuel demand growth in those countries. But between rapidly rising domestic incomes and rapidly falling car prices, that obstacle is becoming more and more surmountable.

To read the complete report, click here:

StrategEcon: The Age of Scarcity, CIBC World Markets, April 24, 2008

Tags: Asia, Chery, CIBC World Markets, Economy, energy, India, Jeff Rubin, Middle Class, oil, Russia, Scarcity, Tata
Posted in Agriculture, Banks, Brazil, CPI, China, Commodities, Credit Markets, Crude Oil, Economy, Emerging Markets, Financials, Geo-political, Gold, India, International Markets, Latin America, Oil & Gas, Russia, energy | No Comments »

Jim Rogers: All My New Money Is Going To Commodities and China

Wednesday, April 30th, 2008

April 27, 2008 - A recent Bloomberg article quotes Jim Rogers as to his bent for Chinese stocks and Commodities. Specifically, Rogers is focusing his attention in China in the areas of agriculture, airlines, tourism, and education. 

“All my new money goes to commodities and China,’’ said Rogers. 

“All the panic looks like a bottom,’’ he said. “I have bought in the last four to five weeks. I’ve been buying shares in China for the first time in a long time.’’

“China has a huge agricultural problem,’’ Rogers said. The “government is doing everything it can to revive the agriculture industry.’’ 

Rogers was bullish on the Chinese yuan, saying it could eventually rise to 2 yuan per dollar.

“Don’t sell your renminbi (yuan), because it will go a lot higher in the next 20 years,’’ Rogers said.

Apparently the folks at Morgan Stanley do not agree with Rogers, saying that China is a “sell.” Rogers appears to disagree vehemently. 

Selling Chinese shares in 2008 “is a big mistake,’’ said Rogers, adding that he had also bought stocks in Singapore, Taiwan and Hong Kong. “I have never sold any Chinese shares.’’ 

The complete article is available by clicking below:

Investor Jim Rogers Buys Chinese Shares as Markets Hit Bottom, April 27, 2008, Bloomberg

Tags: Agriculture, China, Commodities, Jim Rogers, Markets, RMB, Yuan
Posted in Agriculture, BRIC, China, Commodities, Crude Oil, Emerging Markets, Gold, Infrastructure, Markets, inflation | No Comments »