May 1, 2008 - Coutesy of BNN.ca - Don Coxe, the must-read and must-see, BMO Capital Markets Chief Investment Strategist, discusses food prices, shortages, and the appropriate investment strategy in the face of the recent food crisis;
click for video
courtesy of BNN
Source:
Global Portfolio Strategy [04-30-08 10:10 AM]
BNN, April 30, 2008
http://watch.bnn.ca/#clip49664
Tags: Agriculture, BMO, Canadian Stocks, energy, Markets
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April 19, 2008 - In a recent note Dennis Gartman opines that equity markets are stronger everywhere, but that stronger upside volumes would be more re-assuring.
The more we consider the notion put forth here yesterday (following the suggestion made to us by our old friend, Mr. Mark Fisher of MBF Trading in NY at his seminar earlier this week) that we wish to buy “Necessities” and to be short of “Accessories,” the more we like it.
Consumers… as their job prospects weaken; as unemployment rises; as they begin to save more and spend less… will abjure Tiffany’s, and Coach, and Harley Davidson, and WholeFoods and will embrace Wall-Mart, and Johnson & Johnson, and Proctor and Gamble. They will abjure Moet Chandon; they will embrace Budweiser. They will toss of Panera Bread; they will instead buy Kellogs’s products.
Look then at the charts of each, and the “Necessities” are, as we like to say, moving from the lower left to the upper right, while the “Accessories” are moving from the upper left to the lower right.
Click below for the complete story
Dennis Gartman: Equities are stronger everywhere…
Tags: Canadian Stocks, Commodities, Economy, Markets
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Jan. 29, 2008 - This is irresistible. During periods where there seems to be such confusion in the market, we could certainly all use a dose of clarity.
Byron Wien, Chief Global Strategist, Pequot Capital, and one of a few prolific market forecasters, shares his 5 ‘Sure Things’ for this turbulent market:
I’m getting older now, so I only invest in sure things. I don’t invest in things that only “might” work out. So let me give you five sure things.
Prior to his current position as Chief Investment Strategist at Pequot Capital, Byron Wien was Chief Global Strategist at Morgan Stanley.
Tags: Agriculture, Canadian Stocks, Commodities, Currency, Economy, Emerging Markets, energy, Gold, India, Investment Strategy, Investment Wisdom, Russia, US Stocks
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Jan. 25, 2008 - In his latest Basic Points (January 2008), Don Coxe, BMO Financial Chief Investment Strategist, whose track record remains among the most unequalled, makes his recommendations, given the prevailing conditions in the market.
These appear on page 34-35:
1. The financial crisis is not centered in stock markets. Its primary locus is in financial derivatives, and in their impact on the stock prices of leading banks. Until the downward drift of bank stocks and the upward drift of derivative debt yields are reversed, the stock market will continue to slide. Keep overall equity exposure to minimums, and emphasize quality.
2. Bond investors face two risks: inflation and credit. Nominal Treasury bond yields are far too low, and quality corporates are too rare – with 71% of corporate debt junk-rated. Buy inflation-hedged sovereign bonds – preferably in major foreign currencies. Simplicity is good: avoid complex products that are subject to drastic rating writedowns.
3. Commodity stocks are at risk to the extent that the financial frauds and foolishness are able to abort the global economic recovery. A US recession would be good news only for gold stocks. It would be bad news for base metal and steel stocks, and negative news for oil stocks. Agricultural stocks should not be hurt, except that major bear raids will likely spew blood broadly across stock markets.
4. Any panic-driven selloffs in commodity stocks are unlikely to take them off the top-performers lists for more than a few weeks. They are not just fair-weather friends. Not only are most of the majors very cheap on a forward-earnings basis, but mining and oil companies that ordinarily search for resources in remote regions will take advantage of selloffs to acquire reserves in politically safe regions at bargain cost. Coming out the other side of this slowdown, these stocks will experience big increases in their absolute and relative PEs. Someday a big Sovereign Wealth Fund is going to decide that bailing out banks isn’t as profitable as owning matchless reserves of minerals.
5. Food price inflation should strengthen through the year. It could be offset by broad price declines across the US economy as it struggles with recession, but it is becoming embedded in the global economy and will be a challenge for many years. It will produce a full-blown crisis when a major crop failure occurs.
6. The Canadian dollar trades right around parity. It might not climb sharply higher if a US recession is confirmed, because of the impact on the industrial sector and tourism. It remains a fundamentally strong currency, and the greenback remains a fundamentally weak currency. Canadian borrowers should borrow in greenbacks.
7. Gold’s move has been dramatic, but retail investors in North America and Europe have not yet shown signs of true gold fever. That means there is still substantial upside. Soaring silver and platinum prices confirm that this gold move is no mere spastic twitch. The expression “as good as gold” in reference to Treasuries and other US debt instruments should be restricted to use as a warm-up joke at investment policy meetings.
8. Defence stocks have solidly outperformed the S&P for most of the Bush presidency. Iraq and Afghanistan have run down a wide range of Pentagon inventories and a new generation of fighter jets cannot be postponed much longer. No matter who wins the presidency, these companies should continue to prosper.
9. Sovereign Wealth Funds have been buying US banks. Wall Street cites these purchases as evidence of great value in bank stocks. For nations that are overweight Treasuries in their holdings and underweight influence in American politics, swapping Treasuries for bank equities and convertibles makes sense. That does not necessarily mean that the stocks are great value for investors who cannot get other – unspecified – returns on their investments.
10. Use panic days to strengthen your equity portfolio, buying the agricultural, gold and oil stocks you will want to own after the bear retreats to his cave – and selling stocks that are too dependent on US consumers. Retain your quality base-metal stocks: they may well be taken out by other mining companies, or a Sovereign Wealth Fund.
11. The US small-cap bear market may be overshooting because investors haven’t analyzed the likely improved competitive positions of companies whose principal competitors were bought by Private Equity or are Canadian or European companies hurt by the weakening dollar.
12. Be like all wise cottage owners: Protect your possessions from Rats.
Tags: Canadian Stocks, China, Commodities, Gold, India, Information, Investment Strategy, Investment Wisdom, Miscellaneous
Posted in Markets | 3 Comments »
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Courtesy of Bespoke Investment Group
2008 hasn’t just been a bad year for US stock markets, it’s been bad across the world. As shown below, with the exception of China, each of the major international equity indices highlighted are down on the year. Furthermore, eight different countries are currently within striking distance (2%) of hitting new 52-week lows.
Tags: Brazil, BRICs, Canadian Stocks, China, India, Miscellaneous, US Stocks
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DENNIS GARTMAN’S NOT-SO-SIMPLE RULES OF TRADING
1. Never, Ever, Ever, Under Any Circumstance, Add to a Losing Position… not ever, not never! Adding to losing positions is trading’s carcinogen; it is trading’s driving while intoxicated. It will lead to ruin. Count on it!
2. Trade Like a Wizened Mercenary Soldier: We must fight on the winning side, not on the side we may believe to be correct economically.
3. Mental Capital Trumps Real Capital: Capital comes in two types, mental and real, and the former is far more valuable than the latter. Holding losing positions costs measurable real capital, but it costs immeasurable mental capital.
4. This Is Not a Business of Buying Low and Selling High; it is, however, a business of buying high and selling higher. Strength tends to beget strength, and weakness, weakness.
5. In Bull Markets One Can Only Be Long or Neutral, and in bear markets, one can only be short or neutral. This may seem self-evident; few understand it however, and fewer still embrace it.
6. “Markets Can Remain Illogical Far Longer Than You or I Can Remain Solvent.” These are Keynes’ words, and illogic does often reign, despite what the academics would have us believe.
7. Buy Markets That Show the Greatest Strength; Sell Markets That Show the Greatest Weakness: Metaphorically, when bearish we need to throw rocks into the wettest paper sacks, for they break most easily. When bullish we need to sail the strongest winds, for they carry the farthest.
8. Think Like a Fundamentalist; Trade Like a Simple Technician: The fundamentals may drive a market and we need to understand them, but if the chart is not bullish, why be bullish? Be bullish when the technicals and fundamentals, as you understand them, run in tandem.
9. Trading Runs in Cycles, Some Good, Most Bad: Trade large and aggressively when trading well; trade small and ever smaller when trading poorly. In “good times,” even errors turn to profits; in “bad times,” the most well-researched trade will go awry. This is the nature of trading; accept it and move on.
10. Keep Your Technical Systems Simple: Complicated systems breed confusion; simplicity breeds elegance. The great traders we’ve known have the simplest methods of trading. There is a correlation here!
11. In Trading/Investing, An Understanding of Mass Psychology Is Often More Important Than an Understanding of Economics: Simply put, “When they are cryin’, you should be buyin’! And when they are yellin’, you should be sellin’!”
12. Bear Market Corrections Are More Violent and Far Swifter Than Bull Market Corrections: Why they are is still a mystery to us, but they are; we accept it as fact and we move on.
13. There Is Never Just One Cockroach: The lesson of bad news on most stocks is that more shall follow… usually hard upon and always with detrimental effect upon price, until such time as panic prevails and the weakest hands finally exit their positions.
14. Be Patient with Winning Trades; Be Enormously Impatient with Losing Trades: The older we get, the more small losses we take each year… and our profits grow accordingly.
15. Do More of That Which Is Working and Less of That Which Is Not: This works in life as well as trading. Do the things that have been proven of merit. Add to winning trades; cut back or eliminate losing ones. If there is a “secret” to trading (and of life), this is it.
16. All Rules Are Meant To Be Broken…. but only very, very infrequently. Genius comes in knowing how truly infrequently one can do so and still prosper.
Tags: Agriculture, Canadian Stocks, Commodities, Currency, Investment Strategy, Investment Wisdom, Miscellaneous
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Take a look at Morgan Stanley’s global outlook for 2008. Economic reports always require translation and this one is no exception.
If you read between the lines the message is there.
Message:
Emerging markets demand and consumption growth will provide a cushion to make the economic landing “soft.” Regional monetary tightening in EM will be overshadowed by the liquidity spillover from industrial country monetary policy easing. This should prove favourable for EM equities and put some strain on industrialized country equity markets, with some exceptions such as Canada, and Australia.
Here is the overview:
Global: 2008: The Year of Recoupling
Global Economics Team
Our baseline outlook points to continued global expansion through 2009, but with a pronounced slowing next year. Courtesy of the turmoil in global credit markets, and paced by a mild US recession and slower growth in Europe and Japan, we are forecasting a downshift to 4.3% growth in 2008. While still well above the 45-year growth trend of 3.7%, such an outcome may feel downright sluggish following the 4.9% average pace over the 2003-07 period — the strongest half-decade stretch of global growth on record. The outcome can hardly be called a soft landing with the US in a recession, however mild, and considerable risks remain. With policy offsetting, however, we expect a re-acceleration to 4.9% global growth in 2009.
The coming global downshift will likely mask considerable regional disparities. We expect growth in the industrial world to slow to only 1.4%, while the developing economies, led by China, will hardly miss a beat. In the US, we expect a credit-cum-housing-induced mild recession to persist through 1H08, and sluggish growth in Japan, the UK and the Eurozone. But the credit turmoil is becoming global, menacing even weaker growth outside the US. Critical to the global call is the expected resilience of Asian, LatAm and OPEC economies. Whether the knock-on effects on exports from China, Mexico, Canada, Japan, and other Asian economies tied to China’s supply chain will overwhelm their increasingly strong domestic demand remains uncertain. With China tightening into the teeth of this slowdown, the risks are on the downside of this baseline scenario.
As we look ahead to 2008, the asynchronous character of the global economy seems likely to persist. If global “decoupling” was the key theme for 2007, global “recoupling” may well be the dominant issue for the coming year. The extent to which markets, policy and economies are linked may also enter the debate, as tighter financial conditions require aggressive and/or unconventional policy responses, such as the one just launched by five central banks to provide market liquidity. And investors fear that a new wave of inflation may emerge from the booming economies of Asia, OPEC and Latin America.
This is the final issue of the Global Economic Forum for 2007. It has been a tumultuous year for the global economy and financial markets, and we enter 2008 with substantial uncertainty. Hopefully the following 31 dispatches will provide perspective as you weigh the prognosis for the world economy and financial markets. We will resume regular publication on Wednesday, January 2, 2008. Our very best wishes for the Holiday Season.
The soft landing scenario, and the expectation that global growth from emerging markets is critical to the Global call, are enduring themes, and though this report does not confirm the likelyhood that there is sustainability, the intent is NOT to drive consensus, but rather allude to uncertainty, so that consensus remains unlikely. The message is in between the lines. You decide.
Tags: Brazil, BRICs, Canadian Stocks, China, Commodities, Emerging Markets, Gold, India, Information, Latin America, Metals, Miscellaneous, Russia
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Claymore and Horizons BetaPro have just expanded their Canadian ETF offerings.
The newest ETF from Claymore Investments Inc. is Claymore Global Agriculture, which began trading on the Toronto Stock Exchange on Dec. 19 under the evocative ticker symbol COW. The fund’s investment objective is to track the performance, net of expenses, of a recently created benchmark called the MFC Global Agriculture Index…
Including the new agriculture fund, Claymore now has 15 distinct investment mandates in its line-up of TSX-listed ETFs. Three additional new ETFs are to be rolled out in the new year. They include Claymore 1-5 Year Laddered Government Bond, Claymore Premium Money Market and Claymore Natural Gas Commodity…
…Meanwhile, BetaPro Management Inc., which offers ETFs that provide leveraged long or short exposure to various mainly sector indices, is planning to add 10 new funds. BetaPro has filed a preliminary prospectus for five “Bull Plus” funds and an equal number of corresponding “Bear Plus” funds. The funds will provide either leveraged positive or leveraged negative exposure to natural gas, crude oil, gold, the mining industry and the agriculture sector…
The five reference benchmarks for the 10 upcoming Horizons BetaPro funds are the next-month contracts for NYMEX light crude oil, NYMEX natural gas and COMEX gold futures; the S&P/TSX Global Mining Index, and the Dow Jones-AIG Grains Sub-Index.
Tags: Agriculture, Canadian Stocks, Commodities, Investment Strategy, Miscellaneous
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GreenLightAdvisor.com Newsletter
Issue: Vol. 1, No. 3
January 2, 2008
In This Issue
12 Ways to Make Your Kids Financially Savvy
Crazy for China - Forbes interviews the legendary Jim Rogers
Oil: Key Players and Movement
Gold bullion - a belated Christmas gift
Don Coxe’s Investment Outlook and Recommendations for 2008
Ted Seides’ The Next Dominos: Junk Bond and Counterparty Risks
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Happy New Year!
We wish you and your family a healthy, joyful, peaceful, and prosperous 2008.
God, give us grace to accept with serenity the things that cannot be changed, courage to change the things which should be changed, and the wisdom to distinguish the one from the other.
-Reinhold Niebuhr, The Serenity Prayer (1934)
Nothing endures but change.
-Heraclitus
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12 Ways to Make Your Kids Financially Savvy
By JONATHAN CLEMENTS - Wall Street Journal
December 17, 2007; Page R1
…I am not claiming to have the road map for every parent. We all have different values, different incomes and strong ideas about how best to raise children — and you will likely scoff at some of the things I’ve done. With that caveat, here are a dozen ways I have endeavored to help my kids financially….[Here are a few of the headings]
1. Waiting until later
2. Asking themselves
3. Talking the talk
4. Scoffing at wealth
Complete Story
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Crazy For China
Michael Maiello, Forbes Magazine, 12.13.07, 1:05 PM ET
An interview with Jim Rogers author of A Bull in China: Investing Profitably in the World’s Greatest Market ($27, Random House, 2007).
With George Soros, Jim Rogers is co-founder of the Quantum Fund and one of the most successful Global Macro investors in history. He tells Forbes.com why he’s so bullish on China, sour on America and will raise his family in Singapore.
Forbes.com: Are you a dollar bear or China bull?
Jim Rogers: I’m terribly pessimistic about the state of the U.S. dollar. But there are so many pessimists out there right now that we’re bound to have a rally. I doubt you can find anybody except (U.S. Treasury Secretary Hank) Paulson who is bullish on the U.S. dollars. If that rally comes, I would use that rally to sell the rest of my dollars. I’ve never seen so much pessimism in my life. So I’m a dollar bear looking for a big rally. So I can sell.
The U.S. dollar is not an asset I want to hold over the next 10, 15, 20 years. We have an idiot running the central bank right now who knows nothing about currency, history or the markets…[…]
China Markets, News, and Analysis
Complete Story
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Oil: Key Players and Movement
Courtesy of FT.com
In these times of near-$100-per-barrel oil, this interactive world map of oil’s key players and movement is very interesting…
Interactive World Map - Oil: Key Players and Movement
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…a top knotch analysis of gold bullion published by Prieur du Plessis, Plexus Asset Management, Cape Town, South Africa
Gold bullion - a belated Christmas gift
Prieur du Plessis, Plexus Asset Management, South Africa - December 27, 2007 09:25 AM CST
True to form, just as traders were bargaining on a quiet Christmas period, gold again startled with a $15 jump, taking the price well clear of the $800-level.
Interestingly, gold has never in its history recorded a month-end price above $800. It would seem that gold bulls may very well have reason to toast bullion next week, saying goodbye to 2007 having achieved the $800 month-end milestone.
Complete Story
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A Must Read…
Don Coxe’s Investment Recommendations 2008
Basic Points - December 19, 2007
In the latest issue of Basic Points, Double Double, Greed and Trouble, CDOs and the Housing Bubble, Donald Coxe wraps up the year, shares his outlook, and makes his investment recommendations for the 2008 and onwards -
1. Remain heavily underweight banks, particularly investment banks that…
2. Remain overweight Emerging Markets, emphasizing those…
3. We have been ardently endorsing India since we returned from…
4. Remain heavily overweight gold-both stocks and the ETF…
5.
Download the complete issue here
(Go to pg. 34 of the PDF for the recommendations)
The whole issue (as usual, eloquent) however, is very interesting and we urge you to read it.
Do not miss reading this one!
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This article from “John Mauldin’s Outside the Box,” features Ted Seides’ November
2007 paper highlighting counterparty and junk bond credit risks, which are starting to get a serious amount of attention now in the mainstream media.
Make sure you read it.
The Next Dominos: Junk Bond And Counterparty Risk
Monday, November 26, 2007
The subprime problem, we were told, would not spread to other markets. It would be “contained.” And it has, according to Jim Grant. He quipped last week that it has been contained on planet Earth. The risks coming from rising defaults in the US (now above 600,000 and rising from just 200,000 a few years ago) are clearly spreading to markets far beyond the subprime world.
This week’s Outside the Box talks about the next two dominoes that could fall: junk bonds and counterparty risk in the various credit default swap markets. Ted Seides is the Director of Investments at Protégé Partners, LLC, a hybrid fund of funds that invests in and seeds small, specialized hedge funds. He writes this week’s piece in Peter Bernstein’s Economic and Portfolio Strategy, one of the most respected of market analysis letters. You can learn more about the letter at www.peterlbernsteininc.com.
This piece is a little longer than most letters, but it is one of the more important editions of Outside the Box this year. This is a must read…[…]
Complete Story
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Your feedback is valued. Please forward any comments or ideas you may have using the feedback tool at the bottom of the homepage or email us at info@greenlightadvisor.com [mailto:info@greenlightadvisor.com]. If you have any questions about any of the topics covered at GreenLightAdvisor.com or in this newsletter please do not hesitate to contact us.
Sincerely,
The GreenLight Advisor Team
GreenLightAdvisor.com
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Tags: Canadian Stocks, China, Commodities, Emerging Markets, Fixed Income, Gold, India, Information, Metals, Miscellaneous
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