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Matthew Cowie's  Instablog

Matthew Cowie
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Financial Analyst for Mutual Fund Investor Guide; currently living in Beijing, China. Previously worked as a financial analyst for for Fidelity Independent Adviser Dion Money Management. Articles written for FIA and DMM appeared on CNBC.com, Yahoo Finance, theStreet.com and Seeking Alpha.
My company:
Mutual Fund Investor Guide
My blog:
Investing in Chinese Stocks
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  • Real Estate Agents Pull Their Listings Off SouFun's Website
    Why Shares of SouFun Are Sinking

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: SFUN, China
    Jun 06 5:41 AM | Link | Comment!
  • No More Free Money In BOM And BOS

    Deutsche Asset & Wealth Management changed the redemption size for their commodity ETNs from 200,000 to 5,000 on Friday.

    The big redemption size made these busted ETNs because volume has been too thin to acquire in size. It would take an investor a long time to buy enough shares to force a redemption. On the other side, no one would go out and buy the underlying assets to swap them for an ETF trading at a 20-40% discount.

    The funds were attractive to me because I wanted a short bet on industrial metals, willing to work to pick up a position slowly over time and didn't need a large position. The discount was gravy, and I assumed the herd would eventually come back and close the discount gap on top of gains from falling metals prices.

    The result of Deutsche's decision was as follows on Monday:

    As we can see, it was a smart move by Deutsche, especially with a breakdown in copper and other industrial metals becoming a real possibility. At the very least the change in policy should keep the discount smaller going forward, but volume could stay elevated in the coming days if metals break lower and ETP traders look for a suitable product.

    I am still long both BOM and BOS.

    Disclosure: I am long BOM, BOS.

    Tags: BOM, BOS, commodities
    Mar 11 7:21 AM | Link | Comment!
  • Free Money?

    PowerShares DB Base Metals Short (NYSEARCA:BOS) is trading 37% below its NAV. PowerShares DB Base Metals Double Short (NYSEARCA:BOM) is trading 15% below its NAV.

    PowerShares DB Base Metals (NYSEARCA:DBB) just broke to a new 52-week low.

    Average daily volume for the past 3-mos in DBB is 112,000 shares. This shows there's some investor interest in these products. Interest in BOM and BOS, not so much: the same figure for BOM is 3,800 shares per day and for BOS 2,000 shares per day. However, these types of funds can be ignored by traders for a long time and then suddenly spring to life when the trend is in their favor. (click to enlarge)

    The assumption here is that DBB is going to sink and these funds will see their volume pick up, with large trading eventually closing the discount, making for a very solid gain. Otherwise, this is dead money and if the base metals rally (DBB is one-third each of copper, zinc and aluminum) then you're going to be selling out of a very illiquid fund into a weak market. These shares cannot be bought and sold at this time except with limit orders.

    I initiated small positions in both BOS and BOM earlier this year. BOM is the better bet for seeing high volume, but the discount in BOS is so low.......

    Disclosure: I am long BOS, BOM.

    Tags: BOS, BOM, DBB
    Dec 03 3:59 AM | Link | Comment!
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