Comments on Oriental Trader's articles RSS Syndication from SeekingAlpha.com http://seekingalpha.com/author/oriental-trader/articles http://seekingalpha.com/article/93874-why-commodities-may-be-nearing-a-turning-point?source=feed#comment-250090 250090 Wed, 10 Sep 2008 07:32:42 -0400 Funny Timing For Commodity ETF
Carl Delfeld, Chartwell Advisor 09.09.08, 1:05 PM ET

row2image



Dugg on Forbes.com
The View From Alaska - Forbes.com
Chavez Nationalizes Fuel Wholesalers - Forbes.com
Rio Tinto Fails The Green Test - Forbes.com
Hollywood's Best Stars For The Buck - Forbes.com
Visit The Forbes.com Digg Channel



The newest member of the Van Eck family of exchange-traded funds is the the Market Vectors-RVE Hard Assets Producers (amex: HAP - news - people ) ETF, which tracks the Rogers-Van Eck Hard Assets Producers Index.

This Rogers-Van Eck index was developed in concert with international investor Jim Rogers, who is well-known as a strategist inclined to have significant exposure to commodities and is negative on U.S. markets and the U.S. dollar.

For the month of July, the index was down roughly 11%, consistent with the pullback in commodities. The ETF basket presently contains 321 securities, and the top 10 companies account for 34% of total assets.

Maximize your portfolio's bounce as global stocks rally and protect it best you can while the bear still prowls. Click for a free trial of Chartwell Global ETF Advisor with model portfolios and new buys.

Energy accounts for 40% of exposure, agriculture is at 30%, and industrial and precious metals have a 21% weighting. The U.S. and Canada comprise 45% of exposure, and another 34 countries account for 26%.

In an interesting twist, the company weightings are done on a global-consumption basis, rather than the conventional market-cap basis.

As much as I disagree with Rogers on the future of the U.S. market and economy, this is a solid choice for investors looking for one ETF to cover what represents 15% of global GDP.

Other good choices are the iPath Dow Jones-AIG Commodity ETN (nyse: DJP - news - people ), which has only 20% exposure to oil and precious metals. I also like using country funds for commodity exposure; for example, holding the Chile Fund (nyse: CF - news - people ) for copper exposure.

Rather than try to time commodities, investors should use allocations as core holdings offering good diversification and low correlation to equity markets. Build incrementally, since prices are likely to fall more before the next leg of the secular bull market kicks in with a global recovery.

Special Offer: Which European markets will move substantially higher? How about Asian plays besides India and China? Latin America? Click here for recommended international equity portfolios--with country ETF allocations and hedging strategies to protect your gains--in Chartwell Global ETF Advisor.

Hong Kong Surges as Democrats Hold Ground
The iShares MSCI Hong Kong (nyse: EWH - news - people ) gapped 2.8% higher at the open Monday, as pro-democracy candidates overcame low voter turnout to do better than expected in Hong Kong's Legislative Council elections Sunday, thereby retaining a critical veto power.

The pro-Beijing forces were able to maintain a majority in the legislature, in part by basking in the nationalistic glow from last month's Olympic games.

Hong Kong voters selected the legislature's 60 members, half of which are directly elected by popular vote, and half chosen by a complicated formula of "functional constituencies" representing professional interest groups, such as bankers and industry.

Only 45% of registered voters took part in this year's ballot, compared with more than 55% in the last election, which took place in 2004 amid deep dissatisfaction with the Beijing-backed government.

While low turnout is normally deadly for the pro-democracy camp, it managed to hold on to 23 seats in the elections, down from 25 four years ago. Although it is far from the majority needed to reject government legislation, it gives the democrats power to veto changes to Hong Kong's "mini constitution," the Basic Law.

Global Slowdown Clobbers Mega-Cap ETFs
Last week was a particularly rough week for global markets and for the mega-cap stocks that make up ETFs, like the iShares S&P Global 100 Index ETF (nyse: IOO - news - people ), which comprises 100 multinational companies selected based on the firm's percentage of foreign assets, revenues and employees. The average market cap is $10 billion, and the fund's holdings are split just about evenly between U.S. and international companies.

We may not technically be in a global recession, but GDP growth projections are coming down pretty much across the board on a daily basis. European companies and Japan are suffering just as much if not more than the U.S., as growth and profit numbers mirror the weakness in global consumer demand.

While the S&P 500 and the Dow each lost about 3% last week, European ETFs lost about 6.8%; Asia fell about 6.5% and Latin America gave up 9.2%. Having a fair amount in cash, trading more actively and allocating limited assets to inverse ETFs has led to the Chartwell World Country ETF Rotation being down about 4.9% year-to-date.

If the iShares S&P Global 100 Index ETF can hold two-year support near $65, it could be a great vehicle to play the coming global rebound, even if its exact arrival time is unclear.

Carl Delfeld is editor of Chartwell ETF Advisor and global strategist for New England Research & Management. Click here for international investment analysis and ETF portfolio recommendations in Chartwell ETF Advisor.
]]> http://seekingalpha.com/article/94280-an-often-unmentioned-factor-about-chinese-stocks?source=feed#comment-249964 249964 Wed, 10 Sep 2008 00:10:44 -0400 http://seekingalpha.com/article/94280-an-often-unmentioned-factor-about-chinese-stocks?source=feed#comment-248987 248987 Tue, 09 Sep 2008 03:14:45 -0400
One cannot use Yahoo Finance PE ratio to determine the market premium between the A shares in mainland China and H shares in Hong Kong. The reason is that data from Yahoo Finance is not always accurate!

For example China Life yesterday closed at RMB$24.02 in China and
at HK$29.50 in Hong Kong. After adjusting for currency China Life is only trading at 92.3% in China vs in Hong Kong.

For example PetroChina yesterday closed at RMB$11.36 in China versus HK$9.65 in Hong Kong. After adjusting difference in currency the premium of PetroChina is 34.3% in China, not 78% as the author claimed.

Yesterday the Hang Seng AH premium index stood at 106.49 which means the A shares as presented by the 50 stocks in the index is 6.5%
more expensive than its H share siblings.

Finally I like to point out that China Mobile is listed in Hong Kong and not in China which makes the comparison between its A share and H share valuation moot.

You can review the datat Hong Kong Hang Seng Bank:

www.hsi.com.cn/hsicn/e...



]]> http://seekingalpha.com/article/94280-an-often-unmentioned-factor-about-chinese-stocks?source=feed#comment-248887 248887 Mon, 08 Sep 2008 21:12:59 -0400 http://seekingalpha.com/article/94280-an-often-unmentioned-factor-about-chinese-stocks?source=feed#comment-248360 248360 Mon, 08 Sep 2008 11:30:32 -0400 http://seekingalpha.com/article/94280-an-often-unmentioned-factor-about-chinese-stocks?source=feed#comment-248288 248288 Mon, 08 Sep 2008 10:40:38 -0400 http://seekingalpha.com/article/94280-an-often-unmentioned-factor-about-chinese-stocks?source=feed#comment-248098 248098 Mon, 08 Sep 2008 08:17:59 -0400 After my long time analysis I would suggest 50% in A and 50% in H.
The simplest way is HSBC Dragon Fund ETF 0820:HK

For those interested, here is my very old blog article:
www.letsthinkchina.com...]]> http://seekingalpha.com/article/94280-an-often-unmentioned-factor-about-chinese-stocks?source=feed#comment-247793 247793 Sun, 07 Sep 2008 19:21:02 -0400 http://seekingalpha.com/article/94280-an-often-unmentioned-factor-about-chinese-stocks?source=feed#comment-247480 247480 Sun, 07 Sep 2008 11:56:57 -0400

]]> http://seekingalpha.com/article/93874-why-commodities-may-be-nearing-a-turning-point?source=feed#comment-247335 247335 Sun, 07 Sep 2008 08:47:50 -0400 http://seekingalpha.com/article/93874-why-commodities-may-be-nearing-a-turning-point?source=feed#comment-246968 246968 Sat, 06 Sep 2008 12:43:11 -0400 http://seekingalpha.com/article/93874-why-commodities-may-be-nearing-a-turning-point?source=feed#comment-246376 246376 Fri, 05 Sep 2008 13:04:03 -0400 http://seekingalpha.com/article/93874-why-commodities-may-be-nearing-a-turning-point?source=feed#comment-246333 246333 Fri, 05 Sep 2008 12:25:50 -0400 http://seekingalpha.com/article/93874-why-commodities-may-be-nearing-a-turning-point?source=feed#comment-246074 246074 Fri, 05 Sep 2008 08:53:27 -0400 http://seekingalpha.com/article/93874-why-commodities-may-be-nearing-a-turning-point?source=feed#comment-245812 245812 Thu, 04 Sep 2008 18:35:55 -0400 1/ The next US Pres. will have to implement a newer "New Deal" to get the stagnant economy going. A stronger $$ will only increase the ruin. So, a massive infrastructure rebuilding program will HAVE to be started, and quick!! How much copper & iron will that require??
2/ The Chinese have already earmarked $1 Trillion worth of infrastructural spending over the next decade. If things slow enough that time frame will be shortened. How much copper & iron will they need??
regards ]]> http://seekingalpha.com/article/93874-why-commodities-may-be-nearing-a-turning-point?source=feed#comment-245786 245786 Thu, 04 Sep 2008 17:56:05 -0400 http://seekingalpha.com/article/93874-why-commodities-may-be-nearing-a-turning-point?source=feed#comment-245697 245697 Thu, 04 Sep 2008 16:04:20 -0400
Europe was hitting "peak wood" when coal came along. People forget what a positive game-changer coal was over 200 years ago.

But oil came along before peak coal (though some did prematurely speculate about coal peaking). And hydro-electric, nat-gas, and nuclear came along before peak oil. So here we are, two centuries into the industrial age, without encountering any negative game-changers.

But. . . it is time-consuming and expensive to expand hydro and nuclear and there is cause for concern (at least regionally in N. America) that nat-gas is on a plateau (Canadian declines and US increases). Without technological advances that are not on the horizon, solar makes a miniscule contribution. Wind is expanding, but from a small base. So, if as many are suggesting, we are at peak oil production (now or on a plateau that ends in the next five years, pick your prediction from several), in the mid-term commodities prices have nowhere to go but up.

While not directly responding to OT's article, the US badly needs a national discussion on energy, leading to a coherent energy policy. Hope is not a fact. We should want to know if peak oil is imminent, not place blind hope in a technology fix (which seems to be a standard response when peak oil is put on the table).

(Of course we could all get lucky. Dr. Brussard (RIP) was working on a cheap fusion device; the Navy Dept. is continung his research and could prove him right. But do you want to bet your kids on that?)]]> http://seekingalpha.com/article/93874-why-commodities-may-be-nearing-a-turning-point?source=feed#comment-245676 245676 Thu, 04 Sep 2008 15:12:31 -0400 http://seekingalpha.com/article/93874-why-commodities-may-be-nearing-a-turning-point?source=feed#comment-245610 245610 Thu, 04 Sep 2008 13:44:44 -0400 http://seekingalpha.com/article/93874-why-commodities-may-be-nearing-a-turning-point?source=feed#comment-245580 245580 Thu, 04 Sep 2008 13:20:39 -0400
China is concerned about inflation and the rising cost of raw materials for its growing economy. They have stated publicly they will not slow down economic growth and they have stated publicly they intend to control inflation. Further, they have expressed the view that high crude oil costs are partly a function of excessive speculation as well as supply and demand. Some analysts have expressed opinions that China may use the cover of the Olympics to implement a plan to stockpile raw materials and then abruptly stop buying both raw materials and shipping until they break the speculative froth in the commodity markets. It would be helpful if the dollar was gaining strength at the same time, which just so happens to be the case. We also know that proposals to reinforce the margin and reporting rules of the commodity futures markets could be introduced on September 15th and this could get the downward momentum really moving in crude oil and other commodity futures.

If this is indeed the plan then all they now need to do is wait a few weeks longer before restarting to crank up the Chinese economy. By then the impatient Westerners will have thrown in the towel and sold all of their speculative commodity plays, especially those large pension plans that have been long the commodity future indexes.

Preposterous you say, governments don’t get involved in market economics. My reply would be that China is a centrally planned economy and they could very well have implemented such as plan. From the organizers and managers of the Olympics that pulled off spectacular displays and crushed all political dissent, I say they could pull this off as well.
]]> http://seekingalpha.com/article/93874-why-commodities-may-be-nearing-a-turning-point?source=feed#comment-245415 245415 Thu, 04 Sep 2008 10:57:20 -0400 http://seekingalpha.com/article/93874-why-commodities-may-be-nearing-a-turning-point?source=feed#comment-245411 245411 Thu, 04 Sep 2008 10:55:46 -0400 http://seekingalpha.com/article/93874-why-commodities-may-be-nearing-a-turning-point?source=feed#comment-245356 245356 Thu, 04 Sep 2008 10:11:15 -0400 http://seekingalpha.com/article/93874-why-commodities-may-be-nearing-a-turning-point?source=feed#comment-245210 245210 Thu, 04 Sep 2008 08:09:01 -0400