Nojus'  Instablog

We had a good idea to test new investing ideas in practice, after reading online interview with Ken Fisher (http://www.forbes.com/2010/02/02/ken-fisher-gold-intelligent-investing-stocks.html?boxes=Homepagelighttop). So we started to manage our new portfolio “ShortGold”.

K. Fisher’s main idea is that other countries’ GDP and growing middle class is bigger than the USA’ and it can grow faster than the USA now.

We liked it, and we believe that we can agree with these thoughts. But we don’t believe in everything that is in the Internet. We don’t take at its face value, we analyze at first.

It seems a little strange to short gold, but with good risk management tools we have accepted this risk.

Let’s evaluate the companies at first. At a glance:

1. Vivo Participacoes SA (ADR) (NYSE:VIV) – „Brazil’s largest cellular telephone operator with about 50 million subscribers and about one-third of the market”.

Market Value-7 bil. – Good

Volume-1,123,481 – Poor

EPS-1.13 – Good

Dividend-0.43 – Good

Yield-1.5 – Good

Net Profit Margin-4.39% – Good

2. LG Display Co Ltd. (ADR) (NYSE:LPL)

Market Value-12 bil.   – Good

Volume-1,356,000 – Poor

EPS-1.48 – Good

Dividend-0.00 – Bad

Yield-0.0 – Bad

Net Profit Margin-0.88% – Bad

3. CRH PLC (ADR) (NYSE: CRH)

Market Value-17 bil. – Good

Volume-78,644 – Bad

EPS-2.27 – Good

Dividend-0.93 – Good

Yield-3.8 – Good

Net Profit Margin-4.51% – Good

A brief glance has showed that the shares illiquid, but sufficient in itself have the potential to grow. We have decided to create a portfolio.

We have chosen an ETF‘ą to short gold. SPDR Gold Shares (GLD) is best suited for us.

We are looking for points to open a positions with a Technical analysis assistance.

Share price does not seem impressive. They are down trending. This means that we will monitor these positions constantly and wait for opportunity to open positions.