Richard Graham

How PHEVs and EVs Will Sabotage America's Drive for Energy Independence

I think a firm that you need to mention is BYD (1211.HK). They produce iron based batteries that are much less expensive and easier to produce than lithium batteries. They will begin selling their HEV and EV vehicles in the United States sometime next year. And, even if they cars don't catch on, they still stand to gain from licensing their battery technology, which they have done in the past.

Why This Rally Will Continue

I think that I should clarify the intent of my article. I am not saying that the economic outlook for the United States is strong or that this stock market rally will continue indefinitely. Rather, I believe that the rally should continue at least into quarter 3 of this year. I believe that the market will continue to act as it has since March, with only minor correction in the short-term. This behavior is the main driver of the rally. This is not a long or medium term outlook. In the long or medium term, the stock market may finally realize the state of the US economy and strongly correct itself.

Why I Sell Put Options (Part I)

In terms of using market orders, you don't lose that much when the bid/ask spreads are tight (usually a couple of cents). This is true in most heavily traded stocks. With options, contrastingly, spreads are usually wider, so you do need to place a limit order in order to get the more favorable ask price instead of the bid. This is particularly necessary for far out of the money options.

Is Excessive Speculation in Oil and Commodities Markets Actually Occurring?

A great example of this phenomenon is GLD, one of the world's largest holders of gold. As demand for GLD shares increases, GLD has to buy more physical gold which puts upward pressure on gold's price. Oppositely, as demand for GLD shares decreases, GLD has to sell its physical gold holdings, which puts downward pressure on gold's price. This greatly exacerbates prices changes in gold.

China's Water Crisis Is an Investment Opportunity

Davewmart,

You are correct that I made a statistical error. China's population is not projected to be 8.5 billion but will be closer to 1.48 billion people. Instead of there being a 541% increase in water use, there will be a 12% increase, a very large gap and discrepancy. I believe, however, that this does not erode my argument. In the status quo, without population growth, China's water supplies are already being pressured by overuse and pollution. Population growth, along with the dietary changes I also highlighted, will only exacerbate this pressure.

I would tend to agree with the post below by Alphameister.


On Jun 30 09:32 AM Davewmart wrote:

> 'China’s population is projected to rise from roughly 1.3 billion
> today to 8.5 billion by 2025. Assuming current water use per-capita
> remains constant, China’s withdrawal of freshwater supplies will
> increase from 549.76 cu km/yr to 3527 cu km/yr, a 541% increase.'
>
>
> What in the world are you talking about?
> Nonsense.
> You have confounded world population with that of China.
> The correct data from the UN 2007data Sheet
> are:
> China 1,318millions in 2007
> Rising to 1,476millions in 2025
> Before falling to 1,437millions in 2050
>
> So your over-precise 549.76cu km rounded to 550cu km becomes 616
> cu km, or a roughly 12% increase as against your 541% increase.<br/>
>
> A good tip is to check your figures to see if they are common-sense
> before using them - how in the world do you imagine that the population
> could multiply by 5 times in the 14 years to 2025?
> That is pretty heroic breeding! - around 11 children per woman, by
> my reckoning.
> With egregious errors like that, it is difficult to see that anyone
> will take the rest of your analysis seriously, although the basic
> idea that China will be investing heavily in water is correct.

July Will Be a Turning Point for FAZ

What I was trying to imply is that with greater volatility there is the opportunity for greater price movement. You are correct that if it goes up 10% one day and down 10% the next, you lose 1%. However, if we enter a heavy bear market, multiple heavy down days for the market will push up FAZ even if the market attempts to bounce back on some days. The multiple down days with compound, and higher volatility will create higher returns, even in the face of some days where FAZ has negative returns. If you go up 10% two days in a row, and then down 10% the next day, you still make money.

Additionally, you are probably right that over the long term FAZ has nowhere to go but to 0. But, in the short-term (July), where there will be much volatility and market movement, I believe that FAZ is a good play.


On Jun 24 11:43 AM Kunst wrote:

> "These factors ensure higher volatility, which is an important factor
> to prevent exponential decay in FAZ's price."
>
> Actually, exponential decay is increased by higher volatility. If
> you remember your high school algebra,
>
> (1 + x) (1 - x) = 1 - x^2
>
> A 10% rise followed (or preceded) by a 10% decline, leaves you down
> 1%. At 20%, you are down 4%. By the time you compound even a 5-10%
> daily rise/fall, which is common, FAZ (and FAS) has nowhere to go
> but down.