Given the impossibility of one central bank managing the economies of a diverse and fractured continent, Bloomberg's Matthew Lynn says the euro is doomed. [View news story]
Agreed. The efficiencies that the euro creates involving trade appear to be outweighed by the inefficiencies the euro creates by having countries with different levels of development and different economic models being put under the same monetary policy.
Colombia: The Hidden Latin American Gem [View article]
While Columbia is certainly a great success story, it doesn't avoid the influence of the global economy. Primary commodities make up about 70% of Columbia's exports, meaning that if China and Europe are slowing down, their demand for those commodities will fall, as well as the prices of those commodities, which could put a significant dent in Columbia's growth (we've already seen this begin to occur). Secondly, if the world experiences a pullback, then equities in countries typically deemed as "risky" may suffer the most, as they did in 2008-2009. Columbia is a great story and is primed for future growth, but putting money there and assuming it would not be affected by slowing growth in the rest of the world would be a mistake.
Go Long Chinese Currency With the WisdomTree Dreyfus Chinese Yuan ETF [View article]
It'd be nice if there were a 2x ETF for the yuan. Although I agree that the yuan will likely strengthen, it's difficult to see making a sizable return off of this trade.
A judge rules against the six-month deepwater drilling moratorium in the Gulf of Mexico; the administration says it will appeal. Shares of Hornbeck Offshore (HOS), which brought the suit, initially spike 6%. (ETF: DBO) [View news story]
Applying PEG ratios to countries - by dividing their main stock index P/E by estimated GDP growth - shows Russia and China looking cheap, and the U.S. in the middle of the pack (though best in the G-7). [View news story]
Two problems with this analysis: Firstly, the P/E ratios are trailing, which may distort the valuation of the markets, especially given the volatile recovery that the world has experienced. Secondly, GDP growth rates are not the same as growth rates in corporate income, which is what are usually used in PEG ratios.
With regard to China, who appears to be slowing down a bit, the trailing P/E throws off its positioning on this list. China's growth over the coming 12 months may be less impressive than the growth they've seen over the previous 12 months.
Argentina, Venezuela: South America's 700lb Gorillas [View article]
Another reason Argentina has a wide spread is government risk. Kirchner has not shown sound fiscal policy and has essentially tried to take over monetary policy through her influence, which is never a good sign. Lastly, she leaves open a lot of risk for big-time policy changes, which the market has priced in.
Mexico: An Excellent Latin American Value [View article]
Good point, but that being said, remittances have already dried up substantially as a result of the financial crisis. Exports to the US are the real driver of Mexican growth, as a result of the fact that the US is the destination of about 85% of Mexico's exports. As the US economy appears to be improving, particularly with regard to consumer spending, one would expect Mexico's economy to continue to improve.
As long as the euro is having problems, it's difficult to see the yen as a solid short. I'd wait for more bad news out of the Japanese government's fiscal policy or economic performance to go short the yen. That seems likely to happen at some point over the next couple of years, but we'll see.
Follow the Leader: Goldman's Top 15 Stock Holdings [View article]
Agreed, there shouldn't be any "manipulation" in SPY relative to the S&P 500. Large and seemingly irrational swings in SPY are simply within the nature of trading it. By the way, take a look at S&P futures instead of SPY if you're looking at day trading. Nice leverage there!
Follow the Leader: Goldman's Top 15 Stock Holdings [View article]
The two clear theses within this set of 15 stocks are that both tech and emerging markets will continue to go higher. Even the "safety" plays, such as PG and PEP, have significant emerging market exposure and growth according to their earnings. I tend to agree with these theses, especially with a long time horizon.
Could Microsoft / NetEase Challenge Baidu? [View article]
While I agree that Microsoft's prior record does not bode well for success in China, Google's departure from the market provides them with a nice opportunity. Even speculation of a deal with NetEase could send MSFT a bit higher, which would be nice to participate in. If a deal is actually made, I'd take profits in MSFT because as the previous poster points out, Microsoft seems to have difficulty executing in nearly every regard. Overall, this is a nice article and I appreciate you outlining your trade BK.
Emerging Markets: Building BRICs With a Dose of Reality [View article]
Agreed, a lot of this growth will be internal within emerging markets. With growth of the middle class, especially in China and Brazil, consumers will demand more high-quality goods. On top of that, a potentially appreciating yuan over time will reduce China's dependence on exports and further the relevance of its consumers. Two ways to play this: emerging markets infrastructure ETFs, as well as American companies that are seeing heavy exposure and growth in emerging markets, such as MCD, YUM, PG, etc.
The Latin American Prince of Beer [View article]
Given the impossibility of one central bank managing the economies of a diverse and fractured continent, Bloomberg's Matthew Lynn says the euro is doomed. [View news story]
Colombia: The Hidden Latin American Gem [View article]
Go Long Chinese Currency With the WisdomTree Dreyfus Chinese Yuan ETF [View article]
A judge rules against the six-month deepwater drilling moratorium in the Gulf of Mexico; the administration says it will appeal. Shares of Hornbeck Offshore (HOS), which brought the suit, initially spike 6%. (ETF: DBO) [View news story]
Applying PEG ratios to countries - by dividing their main stock index P/E by estimated GDP growth - shows Russia and China looking cheap, and the U.S. in the middle of the pack (though best in the G-7). [View news story]
With regard to China, who appears to be slowing down a bit, the trailing P/E throws off its positioning on this list. China's growth over the coming 12 months may be less impressive than the growth they've seen over the previous 12 months.
Argentina, Venezuela: South America's 700lb Gorillas [View article]
Mexico: An Excellent Latin American Value [View article]
Yen Retains Appeal for the Fearful [View article]
Apple Takes Over, Now Worth More Than Microsoft [View article]
Follow the Leader: Goldman's Top 15 Stock Holdings [View article]
Follow the Leader: Goldman's Top 15 Stock Holdings [View article]
Could Microsoft / NetEase Challenge Baidu? [View article]
Emerging Markets: Building BRICs With a Dose of Reality [View article]
Google Hits a Wall - Time to Buy? [View article]