Aly-Khan Satchu's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/172782/comments http://seekingalpha.com/article/113634-commodities-volatility-indicate-firming-demand-rising-prices?source=feed#comment-348404 348404
The only reason Oil has bounced is because of the Contango and a misperception that Gaza carries geopolitical risks.

You might care to look at the Baltic Dry Index. It has been a near perfect forward indicator.

Aly-Khan Satchu
rich.co.ke]]> Wed, 07 Jan 2009 09:14:03 -0500
The only reason Oil has bounced is because of the Contango and a misperception that Gaza carries geopolitical risks.

You might care to look at the Baltic Dry Index. It has been a near perfect forward indicator.

Aly-Khan Satchu
rich.co.ke]]> http://seekingalpha.com/article/112799-seismic-geopolitical-events-have-little-effect-on-markets?source=feed#comment-342492 342492
A very interesting piece. May I challenge a couple of your conclusions.

The blow off top to $147.00 was substantially driven by fears that the US or Israel was readying an attack on Iran. Quite properly, the consequences of such an attack were impossible to model. Iran is not Iraq. It is a materially different proposition. Once the President ruled this out the market slipped into free fall.

Re: Gaza

The Gaza strip is best characterised as a prison. Therefore, besides lobbing a few totally ineffective rockets, there is no risk of reaction or contagion. Therefore, Gold and Oil were unable to rally. It hardly compares with the toppling of the Shah [for example] when Gold surged last time around.

Re: India and Mumbai

The Sensex is one side of the coin. Have you had a peek at the Karachi stock Exchange? Thats certainly reacted. The Sensex had already tumbled from over 20,000 to below 10,000. The attack whilst alarming was not material.

Re: Russia and Georgia.

Putin certainly served notice of a sort but within a few weeks, the Economy cratered world wide. Had that episode occurred in the early months of the year the reaction would have been entirely differently.

I wish you a wonderful new Year.

Aly-Khan Satchu
rich.co.ke

I have written a commentary all year here
www.rich.co.ke/rctools...

Please use the calendar to see comments and when.
]]> Wed, 31 Dec 2008 10:37:46 -0500
A very interesting piece. May I challenge a couple of your conclusions.

The blow off top to $147.00 was substantially driven by fears that the US or Israel was readying an attack on Iran. Quite properly, the consequences of such an attack were impossible to model. Iran is not Iraq. It is a materially different proposition. Once the President ruled this out the market slipped into free fall.

Re: Gaza

The Gaza strip is best characterised as a prison. Therefore, besides lobbing a few totally ineffective rockets, there is no risk of reaction or contagion. Therefore, Gold and Oil were unable to rally. It hardly compares with the toppling of the Shah [for example] when Gold surged last time around.

Re: India and Mumbai

The Sensex is one side of the coin. Have you had a peek at the Karachi stock Exchange? Thats certainly reacted. The Sensex had already tumbled from over 20,000 to below 10,000. The attack whilst alarming was not material.

Re: Russia and Georgia.

Putin certainly served notice of a sort but within a few weeks, the Economy cratered world wide. Had that episode occurred in the early months of the year the reaction would have been entirely differently.

I wish you a wonderful new Year.

Aly-Khan Satchu
rich.co.ke

I have written a commentary all year here
www.rich.co.ke/rctools...

Please use the calendar to see comments and when.
]]> http://seekingalpha.com/article/112105-t-bills-bubble-bubble-toil-and-trouble?source=feed#comment-337298 337298
Secondly, i think Japan is the precursor. We are in an unprecedented situation. We are moving from a situation where credit was the oxygen and now there isn't any. This is not a small thing. Its a tectonic shift. We are in a process of asphyxiation. The FED will certainly loosen the taps but unless Bernanke is set to put his Helicopter thesis into action, I think the bias [many of us are too young to recall a bear market depression] is towards an elongated L and not a V. We live in an instant gratification world but this time its going to take a lot to resuscitate the patient.

finally, i think you entirely underestimate, the ability of bernanke et al to discipline the curve and keep it bid buy deploying outsize buying at various points in the curve, as and when desired. We have a Bernanke PUT on the bond market as oppose to the Greenspan PUT on the equity markets.

I reckon the 30 year will trade a 2% yield and I am selling PUTS [and have been doing for some time].

Look at japan post bubble.

The world has changed.

Aly-Khan satchu
rich.co.ke

happy Christmas.

If you have the inclination, you might go here
www.rich.co.ke/rctools...

and play with the calendar to see comments from the beginning of the year.]]> Wed, 24 Dec 2008 02:45:48 -0500
Secondly, i think Japan is the precursor. We are in an unprecedented situation. We are moving from a situation where credit was the oxygen and now there isn't any. This is not a small thing. Its a tectonic shift. We are in a process of asphyxiation. The FED will certainly loosen the taps but unless Bernanke is set to put his Helicopter thesis into action, I think the bias [many of us are too young to recall a bear market depression] is towards an elongated L and not a V. We live in an instant gratification world but this time its going to take a lot to resuscitate the patient.

finally, i think you entirely underestimate, the ability of bernanke et al to discipline the curve and keep it bid buy deploying outsize buying at various points in the curve, as and when desired. We have a Bernanke PUT on the bond market as oppose to the Greenspan PUT on the equity markets.

I reckon the 30 year will trade a 2% yield and I am selling PUTS [and have been doing for some time].

Look at japan post bubble.

The world has changed.

Aly-Khan satchu
rich.co.ke

happy Christmas.

If you have the inclination, you might go here
www.rich.co.ke/rctools...

and play with the calendar to see comments from the beginning of the year.]]> http://seekingalpha.com/article/110845-how-opec-can-support-oil-prices-ubs?source=feed#comment-330800 330800
Aly-Khan Satchu
rich.co.ke]]> Tue, 16 Dec 2008 09:01:08 -0500
Aly-Khan Satchu
rich.co.ke]]> http://seekingalpha.com/article/108495-aig-s-bold-move-and-why-i-m-shorting-the-long-bond?source=feed#comment-317973 317973
I would urge you to look at Japan post bubble as the precursor to what will eventually play out. Moreover, the only real tool in the tool box for resuscitating the Banking sector is going to be via a steepish yield curve, a positive carry environment [and the carry will get a lot juicier when Fails are punished which I am sure is imminent] and ultimately via a Bernanke put. By that I mean Bernanke will have to underwrite the yield curve via outsize buying [as and when required].

I think the tectonic plates have shifted in this regard and very little can jolt this trend.

Aly-Khan Satchu
rich.co.ke]]> Mon, 01 Dec 2008 03:53:21 -0500
I would urge you to look at Japan post bubble as the precursor to what will eventually play out. Moreover, the only real tool in the tool box for resuscitating the Banking sector is going to be via a steepish yield curve, a positive carry environment [and the carry will get a lot juicier when Fails are punished which I am sure is imminent] and ultimately via a Bernanke put. By that I mean Bernanke will have to underwrite the yield curve via outsize buying [as and when required].

I think the tectonic plates have shifted in this regard and very little can jolt this trend.

Aly-Khan Satchu
rich.co.ke]]> http://seekingalpha.com/article/99609-all-eyes-on-the-u-s-dollar?source=feed#comment-281090 281090
Very bright eyed and bushy tailed? I have tended to find that Patriotism whilst a laudable emotion, is entirely useless when it comes to investing.

The $ rally has ended this morning as the United States deploys the Zimbabwe monetary strategy which is to print notes and hyperinflate.

The US Government has had to intervene because the Global Free markets are not prepared to pony up any more risk capital for those who have so patently diplayed an ability to lose it.

The response is correct but lets not kid ourselves that it is the best response in a truly abject position.Transferring as yet unquantifiable losses from a defunct Banking Sector to the Taxpayer is not an act of muscularity, I am afraid. Its a last resort.

Aly-Khan Satchu
rich.co.ke]]> Mon, 13 Oct 2008 06:16:40 -0400
Very bright eyed and bushy tailed? I have tended to find that Patriotism whilst a laudable emotion, is entirely useless when it comes to investing.

The $ rally has ended this morning as the United States deploys the Zimbabwe monetary strategy which is to print notes and hyperinflate.

The US Government has had to intervene because the Global Free markets are not prepared to pony up any more risk capital for those who have so patently diplayed an ability to lose it.

The response is correct but lets not kid ourselves that it is the best response in a truly abject position.Transferring as yet unquantifiable losses from a defunct Banking Sector to the Taxpayer is not an act of muscularity, I am afraid. Its a last resort.

Aly-Khan Satchu
rich.co.ke]]> http://seekingalpha.com/article/93125-gustav-and-the-oil-volatility-index?source=feed#comment-241368 241368
Russia may cut off oil flow to the West
www.telegraph.co.uk/mo...

It seems sensible to be long now.

regards
Aly-Khan Satchu
rich.co.ke]]> Fri, 29 Aug 2008 02:02:32 -0400
Russia may cut off oil flow to the West
www.telegraph.co.uk/mo...

It seems sensible to be long now.

regards
Aly-Khan Satchu
rich.co.ke]]> http://seekingalpha.com/article/90247-contrarian-trading-tips-gold-the-dollar-energy-and-financials?source=feed#comment-227517 227517 Aly-Khan Satchu
rich.co.ke]]> Mon, 11 Aug 2008 05:51:56 -0400 Aly-Khan Satchu
rich.co.ke]]> http://seekingalpha.com/article/87754-is-the-dollar-rallying-on-realigned-expectations?source=feed#comment-218006 218006
Aly-Khan Satchu
rich.co.ke]]> Wed, 30 Jul 2008 00:56:15 -0400
Aly-Khan Satchu
rich.co.ke]]> http://seekingalpha.com/article/84213-is-it-time-to-bet-against-oil?source=feed#comment-201157 201157
Aly-Khan Satchu
rich.co.ke]]> Wed, 09 Jul 2008 05:35:09 -0400
Aly-Khan Satchu
rich.co.ke]]> http://seekingalpha.com/article/82607-oil-price-implications-of-a-strike-on-iran?source=feed#comment-192389 192389
US says Israel exercise seemed directed at Iran: report
afp.google.com/article...

US officials say a major military exercise carried out by Israel
earlier this month seemed to be a practice for any potential strike
against Iran's nuclear facilities, US media reported Friday.

More than 100 Israeli F-16 and F-15 fighter jets took part in
maneuvers over the eastern Mediterranean and Greece in the first week
of June to gear the military for long-range strikes and demonstrate
Israel's serious concern over Iran's nuclear ambitions, the New York
Times cited US officials as saying.

A Pentagon official briefed on the exercise said a goal of the
practice flights was to send a message that the Jewish state was
prepared to act militarily if diplomatic efforts failed to halt
Tehran's production of bomb-grade uranium.

"They wanted us to know, they wanted the Europeans to know, and they
wanted the Iranians to know," the Pentagon official was quoted as
saying.

"There's a lot of signaling going on at different levels."

Conclusions

This is lifting crude prices higher. It is curious that it was nearly
30 years ago that the Ayatollah was swept into power. I remember
watching the revolution unfold on the TV. I had gone to study at
Westminster School that very same year. The catalyst for the
revolution was best captured by
www.randomhouse.com/ac...
The Ayatollah was in France and as the Shah become more repressive,
every Friday he would send a tape which would be played in the
Mosques. The Shah began to feel very threatened especially when
Worshippers left the mosque of a Friday and one Friday, he sent the
hated Savak into the Mosques. The next Friday he was gone. The tape
said,
'He is an Infidel, he does not respect the holiest of places.'
The Peacock throne fell and on such seemingly trifling mistakes, Regimes fall.

The Iranian version of Shia Islam is deeply rooted in the idea of
Martydom and sacrifice. Millions of Iranians went to their deaths
against Saddam. The West still sees Iran through the Pahlavi prism,
because so many of them are in LA.

My point is this. It might make great TV lobbing a few well directed
missiles at the Iranians and my concern is that a President who sees
so much in a stark black and white, good and evil prism, nearing the
end of his tenure, it might seem a great exit option. It really might.
This would not be taken lying down by the Iranians and I think they
could really hold our feet to the fire in Iraq.

How Iran would retaliate if it comes to war
www.csmonitor.com/2008...

"If you attack Iran you are unleashing a firestorm of reaction
internally that will only strengthen revolutionary forces, and
externally in the region," says Ranstorp. "It's a nightmare scenario
for any contingency planner, and I think you really enter the twilight
zone if you strike Iran."

So what does such a scenario do to the Crude market? It creates a
potential super spike. How to exploit this? ONE TOUCH.

Aly-Khan Satchu
rich.co.ke]]> Wed, 25 Jun 2008 06:28:48 -0400
US says Israel exercise seemed directed at Iran: report
afp.google.com/article...

US officials say a major military exercise carried out by Israel
earlier this month seemed to be a practice for any potential strike
against Iran's nuclear facilities, US media reported Friday.

More than 100 Israeli F-16 and F-15 fighter jets took part in
maneuvers over the eastern Mediterranean and Greece in the first week
of June to gear the military for long-range strikes and demonstrate
Israel's serious concern over Iran's nuclear ambitions, the New York
Times cited US officials as saying.

A Pentagon official briefed on the exercise said a goal of the
practice flights was to send a message that the Jewish state was
prepared to act militarily if diplomatic efforts failed to halt
Tehran's production of bomb-grade uranium.

"They wanted us to know, they wanted the Europeans to know, and they
wanted the Iranians to know," the Pentagon official was quoted as
saying.

"There's a lot of signaling going on at different levels."

Conclusions

This is lifting crude prices higher. It is curious that it was nearly
30 years ago that the Ayatollah was swept into power. I remember
watching the revolution unfold on the TV. I had gone to study at
Westminster School that very same year. The catalyst for the
revolution was best captured by
www.randomhouse.com/ac...
The Ayatollah was in France and as the Shah become more repressive,
every Friday he would send a tape which would be played in the
Mosques. The Shah began to feel very threatened especially when
Worshippers left the mosque of a Friday and one Friday, he sent the
hated Savak into the Mosques. The next Friday he was gone. The tape
said,
'He is an Infidel, he does not respect the holiest of places.'
The Peacock throne fell and on such seemingly trifling mistakes, Regimes fall.

The Iranian version of Shia Islam is deeply rooted in the idea of
Martydom and sacrifice. Millions of Iranians went to their deaths
against Saddam. The West still sees Iran through the Pahlavi prism,
because so many of them are in LA.

My point is this. It might make great TV lobbing a few well directed
missiles at the Iranians and my concern is that a President who sees
so much in a stark black and white, good and evil prism, nearing the
end of his tenure, it might seem a great exit option. It really might.
This would not be taken lying down by the Iranians and I think they
could really hold our feet to the fire in Iraq.

How Iran would retaliate if it comes to war
www.csmonitor.com/2008...

"If you attack Iran you are unleashing a firestorm of reaction
internally that will only strengthen revolutionary forces, and
externally in the region," says Ranstorp. "It's a nightmare scenario
for any contingency planner, and I think you really enter the twilight
zone if you strike Iran."

So what does such a scenario do to the Crude market? It creates a
potential super spike. How to exploit this? ONE TOUCH.

Aly-Khan Satchu
rich.co.ke]]> http://seekingalpha.com/article/81256-go-to-africa-young-investor?source=feed#comment-186206 186206
Some of the comments above also touch on what I call the 'Bob Geldof Live Aid discount'. For many, Africa will always be the Dark Continent. This too is an opportunity. When I look at something, I dont have 1000s of MBA graduates doing the same. I consider that an advantage. This discount is narrowing.

The big picture is that Africa is undergoing a late stage Industrial revolution. In the 21st century, it can all happen in a very short space of time, as if it were on 'steroids'. Businesses are relatively straight forward and not over complexified with assets that no Management or employee understands. The greatest opportunity lies in finding businesses that are creating scale out of previously fragmented markets.

Its a no brainer.
Aly-Khan Satchu
rich.co.ke]]> Mon, 16 Jun 2008 02:52:52 -0400
Some of the comments above also touch on what I call the 'Bob Geldof Live Aid discount'. For many, Africa will always be the Dark Continent. This too is an opportunity. When I look at something, I dont have 1000s of MBA graduates doing the same. I consider that an advantage. This discount is narrowing.

The big picture is that Africa is undergoing a late stage Industrial revolution. In the 21st century, it can all happen in a very short space of time, as if it were on 'steroids'. Businesses are relatively straight forward and not over complexified with assets that no Management or employee understands. The greatest opportunity lies in finding businesses that are creating scale out of previously fragmented markets.

Its a no brainer.
Aly-Khan Satchu
rich.co.ke]]> http://seekingalpha.com/article/80951-us-dollar-5-reasons-it-will-not-hit-a-new-low?source=feed#comment-183864 183864
Having said that, the US real curve is now steepening. This will add some spine to the $. Short term rates currently are subsidising the Banks thats for sure but long term rates are taking cognisance of the more hawkish rhetoric.

Sentiment [as witnessed by the other comments] is so utterly negative that purely on that basis, the elastic is stretched way too far.

Aly-Khan Satchu
rich.co.ke]]> Thu, 12 Jun 2008 01:08:13 -0400
Having said that, the US real curve is now steepening. This will add some spine to the $. Short term rates currently are subsidising the Banks thats for sure but long term rates are taking cognisance of the more hawkish rhetoric.

Sentiment [as witnessed by the other comments] is so utterly negative that purely on that basis, the elastic is stretched way too far.

Aly-Khan Satchu
rich.co.ke]]> http://seekingalpha.com/article/80157-oil-etfs-what-if-the-dollar-strengthens?source=feed#comment-179510 179510 Paul Volcker also recently broke with form to say that there was a $ crisis. So I feel that the $ can rally substantially from here. In that context, it would be a little foolhardy to stand in front of what might very well become a freight train in the Crude markets.

This is not the time to be limit long Crude.

Aly-Khan Satchu
rich.co.ke]]> Thu, 05 Jun 2008 05:10:33 -0400 Paul Volcker also recently broke with form to say that there was a $ crisis. So I feel that the $ can rally substantially from here. In that context, it would be a little foolhardy to stand in front of what might very well become a freight train in the Crude markets.

This is not the time to be limit long Crude.

Aly-Khan Satchu
rich.co.ke]]> http://seekingalpha.com/article/78188-weekly-market-commentary-may-19th-may-23rd?source=feed#comment-171559 171559
Very enlightening. I have a strong conviction about the softs and was keen to make a leveraged investment via Options. From your piece, its clear that you trade them. Is there a liquid market for options two years out in the softs? Is this the way you would reccommend the play, out of the money calls or are there other structures you can reccommend?

Aly-Khan Satchu
rich.co.ke]]> Thu, 22 May 2008 06:20:35 -0400
Very enlightening. I have a strong conviction about the softs and was keen to make a leveraged investment via Options. From your piece, its clear that you trade them. Is there a liquid market for options two years out in the softs? Is this the way you would reccommend the play, out of the money calls or are there other structures you can reccommend?

Aly-Khan Satchu
rich.co.ke]]> http://seekingalpha.com/article/77738-2008-country-returns?source=feed#comment-169876 169876
Visually this is the equivalent of being smacked in the face. There is a new world out there a la Columbus when he found America. The rewards for the Intrepid Investor are in the Frontier markets.

Aly-Khan Satchu
rich.co.ke]]> Mon, 19 May 2008 02:28:40 -0400
Visually this is the equivalent of being smacked in the face. There is a new world out there a la Columbus when he found America. The rewards for the Intrepid Investor are in the Frontier markets.

Aly-Khan Satchu
rich.co.ke]]> http://seekingalpha.com/article/74384-investing-in-non-u-s-stock-markets?source=feed#comment-158418 158418
Thanks for the compliment. It made my morning.

I came home three years ago, having been in London for many years. What has really struck me in Kenya is the scale of the domestic shareholder base. It is widely expected to be 2m at the end of our current and biggest IPO Safaricom. This is an extraordinary outcome and actually a phenomenon. Today, Nigeria has 6 banks in the top 100 in the world. I really expect the African landscape to be something completely different in a very short space of time. Extraordinary things are happening and its all being compressed into a very few years.

Ex South Africa, I feel SSA is the last frontier. It was a previously very fragmented Continent with small pocket sized markets. The Mobile phone was the catalyst that triggered the aggregation of these small units into scale.

Lot of folk talk of Commodities etc but the next sharp trigger is coming from the Continent being plugged in to the global superhighway.

There might very well be a great arbitrage in identifying those markets that are set to get into these various new indices.



Take care
Aly-Khan Satchu
rich.co.ke]]> Tue, 29 Apr 2008 02:48:09 -0400
Thanks for the compliment. It made my morning.

I came home three years ago, having been in London for many years. What has really struck me in Kenya is the scale of the domestic shareholder base. It is widely expected to be 2m at the end of our current and biggest IPO Safaricom. This is an extraordinary outcome and actually a phenomenon. Today, Nigeria has 6 banks in the top 100 in the world. I really expect the African landscape to be something completely different in a very short space of time. Extraordinary things are happening and its all being compressed into a very few years.

Ex South Africa, I feel SSA is the last frontier. It was a previously very fragmented Continent with small pocket sized markets. The Mobile phone was the catalyst that triggered the aggregation of these small units into scale.

Lot of folk talk of Commodities etc but the next sharp trigger is coming from the Continent being plugged in to the global superhighway.

There might very well be a great arbitrage in identifying those markets that are set to get into these various new indices.



Take care
Aly-Khan Satchu
rich.co.ke]]> http://seekingalpha.com/article/74384-investing-in-non-u-s-stock-markets?source=feed#comment-157938 157938
What is your definition of tradeable stock markets in relation to Africa and particularly in SSA?

There is a whole lot going on which appears not to be captured by your map?

Aly-Khan Satchu
rich.co.ke



]]> Mon, 28 Apr 2008 10:27:10 -0400
What is your definition of tradeable stock markets in relation to Africa and particularly in SSA?

There is a whole lot going on which appears not to be captured by your map?

Aly-Khan Satchu
rich.co.ke



]]> http://seekingalpha.com/article/74317-is-anyone-benefiting-from-global-inflation?source=feed#comment-157794 157794
You say; Although the general price level is rising, the truth is that relative prices have experienced an imbalance, with commodities outpacing the rise of other sectors.

Surely, this entirely depends on your starting point. If you care to look on a longer term basis, many Commodities sufferred from a long period of price underperformance. This started to correct in 2002-2003 with the Oil and Metals complex. The Softs have only recently started to perform and I agree we have passed the tipping point in this regard. We are at the start of something and not even anywhere near the middle.

Clearly, the Beneficiaries are those who are long of resources. The Natural longs faced a one sided demand structure [The West] and the rapid arrival of China and India brought competition to that demand equation. It seems to me to be as basic as that.

Hence one could argue that Consumers [and the biggest Consumers are in the West] have paid an Alice in Wonderland price for their consumption. We are now reverting to a fairer price structure.

Our 'Goldilocks' economic assumptions were just that. They were too US and Euro centric.

The free ride is over. Investors have already taken note.

Aly-Khan Satchu
rich.co.ke]]> Mon, 28 Apr 2008 07:54:13 -0400
You say; Although the general price level is rising, the truth is that relative prices have experienced an imbalance, with commodities outpacing the rise of other sectors.

Surely, this entirely depends on your starting point. If you care to look on a longer term basis, many Commodities sufferred from a long period of price underperformance. This started to correct in 2002-2003 with the Oil and Metals complex. The Softs have only recently started to perform and I agree we have passed the tipping point in this regard. We are at the start of something and not even anywhere near the middle.

Clearly, the Beneficiaries are those who are long of resources. The Natural longs faced a one sided demand structure [The West] and the rapid arrival of China and India brought competition to that demand equation. It seems to me to be as basic as that.

Hence one could argue that Consumers [and the biggest Consumers are in the West] have paid an Alice in Wonderland price for their consumption. We are now reverting to a fairer price structure.

Our 'Goldilocks' economic assumptions were just that. They were too US and Euro centric.

The free ride is over. Investors have already taken note.

Aly-Khan Satchu
rich.co.ke]]> http://seekingalpha.com/article/71018-msci-frontier-markets-index-leaves-emerging-markets-in-the-dust?source=feed#comment-136347 136347
Aly-Khan Satchu
rich.co.ke]]> Fri, 04 Apr 2008 02:11:08 -0400
Aly-Khan Satchu
rich.co.ke]]>