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  • Did The Dollar Find Its Groove Again? [View article]
    In my interpretation, if you look at the eurusd monthly chart, its on a major downtrend channel since its ath in 2008, its top has been touched in 2011 and 2014. The parallel line from it, when projected from the 2008 bottom, was touched in 2010 and is currently projecting at around $1.0750. Its a very symmetrical major pattern and it would be completed at this level, with a third test. I wonder is anyone else is following it?
    Mar 1, 2015. 04:46 PM | Likes Like |Link to Comment
  • This Chart Is Worth 1,000 Words [View article]
    You invest in negative yielding bonds like Germany's for instance, because if the EMU falls apart and they go back to the Deutsche Mark, you make 30% overnight in dollar terms, just like when the Swiss peg was released a few weeks ago.
    Feb 28, 2015. 10:46 AM | 2 Likes Like |Link to Comment
  • Petrobras: Buy This 'Black Friday' Oil Stock Bargain While It's Still On Sale [View article]
    I would also add the overvalued BRL to the mix. In Brazil, most key prices are state controlled, including fuel prices, so the 'real' rate of inflation is being hidden. If all prices were allowed to run free, inflation would be at around 15 to 20% a year. Of course, the country pays in the form of losses for business such as Petrobras, which is effectively used as a cash cow for the government, and chronic underinvestment.

    Fair value for BRL is about $3.5 to $4 in my opinion, and this is more likely to be seen in the first 2 years of this government rather than later, when they start thinking about the elections and burning reserves to support the currency.
    Nov 28, 2014. 05:09 AM | Likes Like |Link to Comment
  • Anatomy Of A Market Bubble [View article]
    Too much of of commentaries' focus is around criticising monetary and fiscal policy, whereby the real big structural issues at play get easily overlooked. The world is really driven by innovation, globalization and demographic developments, which are currently massively deflationary. I would also add natural resources and environmental depletion. Opportunities become harder to find, and paradoxically, huge. In a world like this, I interpret the FED's QE, ZIRP, and global growing national debt to GDP and increased wealth concentration, as symptoms rather than the causes of our problems, (or opportunities, depending on how you look at). That's why I do not demonize the FED or indebted governments. The ever lower 'organic', as opposed to FED pumped, returns on capital and scant economic growth and indebtedness is simply a question of oversupply and increased concentration of capital, generated by a tecnological revolution still in course, as is the demise of the consumerist middle class. It looks like mankind is gearing up for something huge, like going out into space big time, and we're gonna need some crazy trillionaires to finance it. The rest is gonna fall apart. Sorry if this comment became something like a sci fi bad trip. Cheers guys!
    Nov 25, 2014. 12:10 PM | 1 Like Like |Link to Comment
  • Stocks: Considering Life Without The Fed 'Put' [View article]
    There are very strong structural deflationary forces in play after the 1980s, such globalization and technology, which compelled the fed to act in the way it did. Ultimately, returns from capital tend to get smaller anyway, with fed or without, as opportunities become harder and harder to find and exploit. Like old age, its a process that can only be administered, but not reversed.
    Nov 6, 2014. 05:03 AM | 3 Likes Like |Link to Comment
  • How Much Longer Until Stocks Fall Down? [View article]
    QE was a big PR move by central banks. It was the PR effect rather than the actual cash from it that lifted stocks. 2 trillion dollars of money printing can make scary headlines and makes the retail investor who is fearful of inflation load his portfolio with valueless junk fleeing from an illusory threat. What they do not realize is that 2 trillion is nothing compared to the 60t plus of debt, and that we are in the beginning rather than in the end of a multi decade deleveraging cicle. This is by definition deflationary. QE will stop because it's no longer working. The only solution is to let deleveraging takes it's painful course
    Aug 14, 2013. 08:10 AM | Likes Like |Link to Comment
  • Buy Broadcom To Enjoy A Profitable Future [View article]
    the market always overreacts to the upside and to the downside. If you do no have the guts to make a leap of faith, you will never make a bargain, i.e. get the most value for you money. If you wait for a lot of evidence before buying, chances are there is not a lot of risk premium left in there as the good news are already priced in, maybe even more than they should. You are buying a great company in the eyes of everyone and all the analysts, but in terms of value for money you are making a loss. Yes, you can be a momentum chaser, but how you determine the time to go out. Flying stocks can destroy years of return on a single day.
    Aug 9, 2013. 10:32 AM | Likes Like |Link to Comment
  • The Risk That Should Keep VIX Shorts Up At Night [View article]
    I do not know why all focus here is on ETNs and ETNs options. Why not go straight for the real VIX options and futures at the CBOE? You can sell calls and get the double positive effect of contango and time decay, although I woudn't do it right now with the VIX so low.
    Aug 2, 2013. 04:17 AM | Likes Like |Link to Comment
  • It Is Time To Take Profits In Fertilizer Stocks [View article]
    The best long-term opportunities are when everything is uncertain and everybody is fearful. If you want to be too sure of things, you will almost certainly buy too high. Investing sucessfully requires a leap of faith.
    Jul 31, 2013. 07:28 AM | 1 Like Like |Link to Comment
  • Just What Is A Speculative Bubble? [View article]
    A good definition of a bubble is when investors stop focusing on buying value and start buying purely because of momentum. I.e. you buy not because there is a decent long-term investment at a reasonable price, but whatever rubbish at whatever price simply because it's going up and everyone else is making money. Notice the difference in stock recommendations from private banks in 2009-10 and now. Back then, the justification was value. Now this argument no longer works because there is no value to be found in stocks so they are focusing on what they cynically call: 'multiple expansion' (the price of rubbish is going up) For anyone thinking there is value in stocks, why is BAC going up at 35 times earnings and 0.27% dividend yield? I will not feel sorry for anybody buying this junk who loses money when it finally crashes. Its the same thing everytime, humans will never learn!
    Jul 23, 2013. 03:09 PM | Likes Like |Link to Comment
  • Market Outlook: The Calm Before The Storm [View article]
    some great comments here. to the QE crowd: the increased money supply from the FED of 3 trilllion USD is nothing compared to the 60 trillion total USD denominated debt. If you look at the long term-charts, debt growth is faltering in spite of all QE done, lending is not growing, defaults are rising, commodities going down, housing weak, etc... deflationary forces are much stronger than the FED. We are in the middle of a secular deleveraging process, and everyone is chasing returns by buying junk to protect from inflation.. When the herd finally realize this, we will have the final leg of the secular bear we are in. See TIPS spread already trending lower?
    Jul 22, 2013. 06:37 AM | Likes Like |Link to Comment
  • Cyprus's parliament is due to convene this afternoon to debate an astonishing eurozone demand that it tax all bank deposits at up to 10% in return for a €10B bailout. While approval is not guaranteed, Cypriots rushed to take as much money as allowed out of ATMs. And although EU Commissioner Olli Rehn ruled out a deposit raid in other eurozone countries, menacingly for savers, eurogroup chief Jeroen Dijsselbloem would not. "We are in a new world," says an economist. Update: The parliamentary debate has been postponed until tomorrow. [View news story]
    That's theft, but it reminds us that live is a struggle for survival and one cannot have absolulute faith in any single state or institutions. Instead, if one wants to survive and want to insure the living standards of his offpring for several generations, diversification is key, not only across assets classes, but also among various jurisdiction and ownership structures.
    Mar 17, 2013. 02:51 PM | 1 Like Like |Link to Comment
  • The CBOE Volatility Index today dropped below 12 for the first time since 2007 and against a long-term average of 20.4. Contrary to what contrarians believe, writes Mark Hulbert, low VIX levels are not necessarily bearish. Thinking about VIX as what it is - a measure of expected volatility - rather than as a "fear gauge" might help do away with this misperception. VXX -2.2%[View news story]
    This market is rallying on ridiculously low breadth and volume, big defensives stocks are leading and cyclicals are taking a beat, and that's all after massive insider selling. Bullishness and complacency everywhere you look. Markets can stay irrational for a while, but eventually, we all know what happens.
    Mar 11, 2013. 01:32 PM | 4 Likes Like |Link to Comment
  • Is Record-High Market Overvalued? [View article]
    Your P/e average since 89 cannot be more biased, you carefully select the biggest multi-year bull run which includes p/es above 40 (in year 2002). I would prefer to see a century long average which also includes depressions.
    Mar 9, 2013. 01:37 PM | Likes Like |Link to Comment
  • Citigroup: Destined To Double By 2014? [View article]
    BAC's (ttm) EPS is a ridiculous 46 times! Citi's is trading at almost 18 times earnings. I would't trust forward earnings. To me, banks are expensive.
    Mar 6, 2013. 10:04 AM | Likes Like |Link to Comment