Nicholas Pardini's  Instablog

(click to enlarge)

I am excited to announce that my newest book, The Definitive Guide to Emerging Market Currencies, is now available for sale in both print and ebook edition on Amazon. For those looking to invest in emerging market currencies, this book is great starting point that highlights the key differences in trading emerging market currencies versus major currency pairs. In addition, I provide fundamental outlooks for the most traded and free flowing currencies within the emerging economies to provide economic context to how these currencies currently perform along with historical drivers.

Print Edition

Kindle Version

Ebook Version (other formats)

About The Definitive Guide to Emerging Market Currencies:

With central banks around the world devaluing major currencies such as the US dollar, Japanese Yen, and the euro, opportunities for higher returns are available through investing in emerging market currencies. Investing in exotic currencies such as the Chinese renminbi or Brazilian real may seem complicated, but with the help of this book we make it more accessible to investors of all sizes.

The Definitive Guide to Emerging Market Currencies covers the macroeconomic underpinnings foreign currency markets, the fundamental factors that define the future strengthening of currencies in emerging markets, and how to trade these currencies. The book also goes into detail on the economic fundamentals of every significantly liquid emerging market currency along with an investing outlook for each one.

For those looking to make money trading emerging market FOREX, or are just curious about emerging market currencies, this book is the best place to start. Even stock market investors benefit from learning about these FOREX markets because currency fluctuations have a huge impact on investors' total returns in any foreign country.

12/27/2012

The shooting at Sandy Hook Elementary School in Newton, Connecticut was an unfortunate American tragedy. Public relations issues have motivated mutual funds to sell off shares in gun manufacturing companies in the name of social responsibility. As a result both Smith and Wesson (SWHC) and Strum Ruger (RGR) sold off over 30% the next week for no fundamental reason. Therefore, I recommend buying gun stocks due to now cheap valuations and stronger fundamentals after the shooting will provide excellent returns.

Valuations and the recent economic performance of Smith and Wesson and Ruger imply that both stocks are cheap. SHWC trades with a P/E Ratio of 9 and a PEG ratio of at a very low 0.41. Even with this recent sell off, the company's debt/equity ratio has fallen 50% in 2012 to 0.27 and profitability has increased from a loss to 11.68% over the same period of time. Return on invested capital is also extremely strong for Smith and Wesson at 30.68%.

Strum Ruger trades at a higher P/E than Smith and Wesson, but it has a much stronger financial position. Ruger has no debt, and a strong current ratio at 3.18. In addition to this Ruger's return on invested capital is higher at 36% and pays out a high dividend yield of 3.02%.

The school shooting contrary to popular opinion is bullish for gun stocks. Even though advocates of gun control have spoken loudly and prominently in the aftermath the shooting, new federal gun control legislation is unlikely. However, the fear of public safety and future gun control legislation amongst the general public have caused gun sales to surge in the month of December. The re-election of President Obama also triggered increased gun sales similar to the reaction to his first election in 2008.

Due to anxieties over an adverse economic climate, increased gun control laws, and potentially a higher degree of civil unrest and violent crime, I recommend gun sales will stay elevated heading into 2013. Ethics driven selling have put major gun producing companies at excellent valuations. Overall, the combination of these factors make it an excellent time to buy gun stocks. When comparing Smith and Wesson versus Ruger, I believe Ruger is the better buy due to a high dividend yield and an overall stronger financial position.

Disclosure: I am long RGR. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha is an excellent resource for investors to find news and current commentary about US-traded equity, bond, currency, and commodity markets. However, when it comes to emerging and frontier markets, this leaves out quality information about numerous (and often the best) investment opportunities in the emerging market space. I founded Emerging Market Insider to fill this void and inform investors of the vastly untouched market for overseas investors. This also explains why I have not published as many articles on Seeking Alpha lately as my latest materials covers different markets. Nevertheless, I will still publish content on here that can be directly traded on the NYSE.

Emerging Market Insider is the definitive source of financial market commentary for investors who both need to diversify out of US publicly traded securities and seek to gain exposure to the growth opportunities of emerging and frontier markets. ETFs and ADRs have become helpful in recent years to gain exposure in this sector, but it is simply not enough. Due to sufficient demand from local investors, the best equity issues often do not reach US capital markets.

Written by the some of the best institutional investment managers throughout the Asia-Pacific region, along with global emerging markets experts, Emerging Market Insider introduces American and foreign investors to the best stock, commodity, currency, and private equity opportunities in the emerging markets. Since these investments are not listed on US exchanges, investment bank research departments and brokers lack the incentive to investigate these companies, despite higher risk adjusted returns. Emerging Market Insider not only discusses investment opportunities, but also identifies the lowest cost and most efficient way to trade these markets. Most markets are still fairly accessible to globally minded traders and investors.

If you are interested in learning more about emerging markets or a fund manager/emerging market expert wants to become a contributor, check out the site. I look forward to feedback from readers of Seeking Alpha.

-Nick Pardini

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