Showing posts with label General. Show all posts
Showing posts with label General. Show all posts
03 October 2008
Man doesn't need God...
...to punish him for his greed, for man is perfectly capable of punishing himself.
20 August 2008
What we do for money and how we fail to see the signals
The first eight months of the year are almost behind us and with 99% certainty we can say that 2008 will not be positively remembered for anything except maybe for the Beijing Olympics. Although even that event has had some nasty controversies surrounding it, such as the Tibet situation, Phelps' victory over Cavic, two disqualifications on the 200 metres and the alleged doping use of heptathlon silver medalist Lyudmila Blonska. I wouldn't be surprised if some Jamaican heads are next on the chopping block (every winner is considered suspicious these days).
There is certainly a link between the Olympics, today's political issues and today's economic issues. All have something to do with two things: power and money. Nowadays, being a good sport just doesn't count anymore. The more money & power dominate life, the more you'll see vile games being played.
To see what roles money and power play in the arena of foreign politics, one only needs to read recent cover stories on Georgia. Georgia is important because it's the United States' only way left to get oil and gas out of the Caspian. The EU would never even think of training Georgian soldiers as Russia could simply retaliate by shutting down gas pipelines, leaving two thirds of Europe in darkness.
Many believe that those who have the energy sources will have the power in the years to come. Russia is well aware of this and so is the US. For many decades, the US have increased their power through its dollar hegemony, through eliminating the gold standard and through maintaining close ties with the net exporters of fossil fuels. Although that last part hasn't always been very successful, considering the somewhat fragile relationships with Russia, Venezuela and Iran.
Similar to Governments, companies have done a lot for money and power as well. As a marketeer, I always believed that becoming a world leader in your company's playing field should never be a target 'an sich'. It is a daft and empty target that says nothing about how financially successful your company is or about what you have actually contributed to society. Nowadays, have exactly that in mind: growing at any cost. Companies that grow into new markets and new geographies through endless takeovers always remind me of those guys at school that were usually the best at sports but with the lowest grades in anything other than sports.
Takeovers of companies has for many companies become a target by itself. And the preferred takeover targets are often competitors, because they are the quickest way to grow market share. First of all, I think it should be a rule to never take over a competitor as integration is often impossible and corporate cultures are usually not compatible. But also for the simple fact that these kinds of takeovers usually go hand-in-hand with mass layoffs. The airline industry is a good example of that.
Companies have become bigger and bigger and thereby slower to respond to changing environments. Current fuel prices have pretty much single-handedly eliminated half the world's airlines. Most have been swallowed by competitors, who gave a different meaning to the word synergies. Synergy used to be a positive word, describing how the outcome of a system is greater than the sum of its parts. Beautifully said, but I don't think the ancient Greeks had mass layoffs in mind when they invented the word synergy.
Having said that, I do greatly respect companies who have clear long-term business strategies that are not simply focused on absolute power, but at the added value that products and services should offer customers and how society as a whole will benefit. It's hard to find such companies these days. Even companies created to help people in financing their mortgages to provide them a home for their families have completely forgotten their raison-d'etre. I am obviously referring to Fannie Mae and Freddie Mac, Government-sponsored entities (GSEs) that were supposed to support home ownership and rental housing. Being listed companies, they had shareholders to report to and these shareholders were interested in one thing only: money. They wanted money and they wanted it fast. The mortgage industry as a whole has become so focused on 'quick wins' that its greed destroyed itself, a bit like a dog chasing its own tail and then eating it.
We are clearly being sent a message that the greed and materialism of this world is not the right way, but blinded by our own greed, we fail to see the signals. And so, history repeats itself in a funny way. In the first half of the 20th Century, two world wars and an economic depression were the signals that we received. Now, we have once again forgotten what greed and military world hegemony did to all major world powers ever since man started writing down history.
Keepin all this in mind, I am clearly taking a defensive standpoint when it comes to my investment decisions. I recently bought gold coins with some of my savings and I only short financials and indices and buy junior companies that I believe in. As I mentioned, the bigger companies get, the more they lose their ability to quickly respond to changes. And more than ever, we are now in a rapidly changing environment, that requires us to think about issues we never really needed to think about. We need to reconsider the bank(s) that we store our savings at. We may need to reconsider the vehicle that we use for transportation and possibly even the company that we work for.
If I may repeat: our savings aren't safe. Our pension schemes aren't safe. Our houses aren't safe and our jobs aren't safe. And still, too many people are denying the signals that we are getting. People are still borrowing money from their banks to invest in companies that are screaming to be bailed out by tax payers. All this once again proves that a pair of eyes may allow us to read, a pair of ears may allow us to listen, but we really need a brain to see.
There is certainly a link between the Olympics, today's political issues and today's economic issues. All have something to do with two things: power and money. Nowadays, being a good sport just doesn't count anymore. The more money & power dominate life, the more you'll see vile games being played.
To see what roles money and power play in the arena of foreign politics, one only needs to read recent cover stories on Georgia. Georgia is important because it's the United States' only way left to get oil and gas out of the Caspian. The EU would never even think of training Georgian soldiers as Russia could simply retaliate by shutting down gas pipelines, leaving two thirds of Europe in darkness.
Many believe that those who have the energy sources will have the power in the years to come. Russia is well aware of this and so is the US. For many decades, the US have increased their power through its dollar hegemony, through eliminating the gold standard and through maintaining close ties with the net exporters of fossil fuels. Although that last part hasn't always been very successful, considering the somewhat fragile relationships with Russia, Venezuela and Iran.
Similar to Governments, companies have done a lot for money and power as well. As a marketeer, I always believed that becoming a world leader in your company's playing field should never be a target 'an sich'. It is a daft and empty target that says nothing about how financially successful your company is or about what you have actually contributed to society. Nowadays, have exactly that in mind: growing at any cost. Companies that grow into new markets and new geographies through endless takeovers always remind me of those guys at school that were usually the best at sports but with the lowest grades in anything other than sports.
Takeovers of companies has for many companies become a target by itself. And the preferred takeover targets are often competitors, because they are the quickest way to grow market share. First of all, I think it should be a rule to never take over a competitor as integration is often impossible and corporate cultures are usually not compatible. But also for the simple fact that these kinds of takeovers usually go hand-in-hand with mass layoffs. The airline industry is a good example of that.
Companies have become bigger and bigger and thereby slower to respond to changing environments. Current fuel prices have pretty much single-handedly eliminated half the world's airlines. Most have been swallowed by competitors, who gave a different meaning to the word synergies. Synergy used to be a positive word, describing how the outcome of a system is greater than the sum of its parts. Beautifully said, but I don't think the ancient Greeks had mass layoffs in mind when they invented the word synergy.
Having said that, I do greatly respect companies who have clear long-term business strategies that are not simply focused on absolute power, but at the added value that products and services should offer customers and how society as a whole will benefit. It's hard to find such companies these days. Even companies created to help people in financing their mortgages to provide them a home for their families have completely forgotten their raison-d'etre. I am obviously referring to Fannie Mae and Freddie Mac, Government-sponsored entities (GSEs) that were supposed to support home ownership and rental housing. Being listed companies, they had shareholders to report to and these shareholders were interested in one thing only: money. They wanted money and they wanted it fast. The mortgage industry as a whole has become so focused on 'quick wins' that its greed destroyed itself, a bit like a dog chasing its own tail and then eating it.
We are clearly being sent a message that the greed and materialism of this world is not the right way, but blinded by our own greed, we fail to see the signals. And so, history repeats itself in a funny way. In the first half of the 20th Century, two world wars and an economic depression were the signals that we received. Now, we have once again forgotten what greed and military world hegemony did to all major world powers ever since man started writing down history.
Keepin all this in mind, I am clearly taking a defensive standpoint when it comes to my investment decisions. I recently bought gold coins with some of my savings and I only short financials and indices and buy junior companies that I believe in. As I mentioned, the bigger companies get, the more they lose their ability to quickly respond to changes. And more than ever, we are now in a rapidly changing environment, that requires us to think about issues we never really needed to think about. We need to reconsider the bank(s) that we store our savings at. We may need to reconsider the vehicle that we use for transportation and possibly even the company that we work for.
If I may repeat: our savings aren't safe. Our pension schemes aren't safe. Our houses aren't safe and our jobs aren't safe. And still, too many people are denying the signals that we are getting. People are still borrowing money from their banks to invest in companies that are screaming to be bailed out by tax payers. All this once again proves that a pair of eyes may allow us to read, a pair of ears may allow us to listen, but we really need a brain to see.
07 September 2007
Bearish times ahead - be cautious
Usually I try to come up with some analyses of undervalued stocks every now and then. I haven't posted anything during the past few weeks and I must admit that my perception of the market has recently changed. Before much of the subprime woes were dominating the news, I was still of the opinion that the major US indices would go up much further than 14,000 based on the simple fact that the Fed would keep printing more and more money. This would not specifically be good news for stocks, but it would certainly lead money to lose its value and that usually helps share prices to appreciate. I think there is no better example of this than the Zimbabwe stock exchange.
But as I mentioned, my perception changed. I am not very bullish anymore, in fact, I am bearish. The subprime problems have certainly put the train in motion. Mortgage lenders are to a great extent responsible for the situation we're in now. They are directly or indirectly responsible for making lending more difficult, for rising interbank rates, for falling housing prices and to some extent for the (coming) drop in consumer spending. The same goes for credit card companies. I have always had my thoughts about capitalist countries where possessions are bought on credit. The only thing I will ever buy on credit is a house and I will never pay more for a house than five times my household income.
American home owners now face situations that will wake them up. The American Dream was never meant to be bought with borrowed money, was it? Taking your borrowed money to the stock market is asking for trouble as well. This is where the Yen carry trade kicks in. We already saw this year that at times when the Dollar/Yen dropped, so did stock markets and so did for instance precious metals. This situation is slightly different now. The Yen has strengthened again since its June peak and this has certainly not helped the American and European indices, but precious metals prices are suddenly flourishing. Gold broke out of its sideways range and seems to be starting a new bull run. Silver may be behind, but gold's little brother will probably catch up in the coming months.
From this point in time, I expect risk to be priced into stocks again. I have to admit that it continues to surprise me when I watch CNBC and hear analysts say that Apple is a steal at 37 times earnings. It continues to surprise me that analysts are advising to buy 'tech', since 'tech' is where the growth will be in the coming years. I strongly disagree. If you ask me, the only potential growth sectors will be mining, energy and base materials. Not because demand for oil, gold or steel will go up, but because both the Euro and the US Dollar are losing value. The Central Banks' capital injections haven't helped in this respect and they will soon be caught in a stagflation spiral (i.e. a stagnating economy in combination with high inflation rates).
Add to this the recent 'Al Qaeda trades', where unknown parties have been buying huge quantities of out-the-money put options, both in Europe and on Wall Street, and we have a very dark and cloudy scenario. As if that's not enough, we are also in a Puetz Window (the days in between a full moon and a solar eclipse), which has historically been the likeliest time for stock market crashes.
Last Friday, we could already see that all this uncertainty has led investors to buy precious metals as well as the Japanese Yen. These are also the positions that I am in today: I am short EUR/JPY, long silver, long mining companies and I hold puts and put spreads on major indices. Not because I am convinced that we will get a crash like we had in 1987, but because I am convinced that there are very weak times ahead of us. I am also convinced that stock valuations today are not what they were one year ago. With a possible recession coming up, the potential end of the carry trade period, the increased difficulty to attract money and the consequential drop in M&A activity, a stock valued at 37 times earnings is really not that cheap anymore.
16 August 2007
Time to start shopping again...?
I am sure that the past weeks have been disastrous for many investors as very few had seen this drop (and its timing) in the stock markets coming. Even those who did saw it coming may not have expected it to be this fierce. I think I may include myself in that last category. With the lion share of my portfolio invested in American stocks and a long gold position, this week has certainly been one that I do not wish to experience a second time. My long position in gold has been liquidated and I was too early to close my short position on the Dutch AEX index, which generally follows the US indices.
Now is the time to sit and think about what steps to take. Do I sell my shares, waiting for further drops? Do I move extra money into my trading account? Do I sit and wait until the bottom is there, knowing that current valuations are ludicrously low? This is probably a choice that many private investors are now thinking of and their decision partly determines the future course of the markets.
Let's have a look at the signs that we're getting. The move that we've seen since the year-highs was fiercely downward, then sideways, then fiercely downward again. Corrections like these are never ended with a sideways move. They always end after a last fierce sell-off, followed by a quick rise. The first downward move was mainly caused by financials that were (or were not) affected by the subprime woes. The second downward move, the one that we're in now, is not caused by financials - even though all newspapers, television stations and websites will tell you that investors are selling on subprime fears. And the financial sector is the only one that is going up again! The main sectors that are now hit are services, basic materials and to a lesser extent the energy sector. These are the sectors that had not yet had serious sell-offs and investors are now simply taking profits, based on fear or emotions if you like. In addition to that, the carry trade has its effect as well, which has affected precious metals prices as well.
All this means that you're now able to buy dividend cannons like Southern Copper at a p/e below 10, a growth company like Companhia Vale at a p/e of 9 and Freeport-McMoran at a p/e of 8.4. And these are not companies that have performed badly so far this year! This Thursday's sell-offs also mean that telecom stocks are reasonably priced again, even though this is not one of my favourite sectors. It means you can buy Apple at $112, where hardly anything's changed since everyone wanted the stock at $140. (I personally continue to think that it's crazy to pay over 30 x earnings for any company, unless it's a junior company with great prospects, but I seem to be the only one)
All I can say is that today we are one step closer to a turnaround, which doesn't necessarily mean that 12500 was the bottom for the Dow. There may be a further drop, but I am pretty confident that we will not see a drop as fierce as the one we've seen this Thursday. Profit has now been taken in the sectors that are fundamentally the strongest sectors and these best-performing sectors are the last ones to get hit.
From this I can conclude that the bottom is near. I will therefore not sell any of my stocks and wait for better times to come, however painful this may be. The only thing one can do is write some calls or buy some puts, just in case we haven't seen the bottom yet. I still think the precious metals are the sector to be in and especially gold. I will therefore look for a new long position in gold, once again with a stoploss. To all investors who felt the way I felt this week, hold on tight, start shopping again, but whatever you do, don't be the last one selling. After all the economy can't be that bad, because my fiancee's still out there shopping for shoes as if nothing changed this week...
Disclaimer: The author has no position in any of the above-mentioned stocks.
Now is the time to sit and think about what steps to take. Do I sell my shares, waiting for further drops? Do I move extra money into my trading account? Do I sit and wait until the bottom is there, knowing that current valuations are ludicrously low? This is probably a choice that many private investors are now thinking of and their decision partly determines the future course of the markets.
Let's have a look at the signs that we're getting. The move that we've seen since the year-highs was fiercely downward, then sideways, then fiercely downward again. Corrections like these are never ended with a sideways move. They always end after a last fierce sell-off, followed by a quick rise. The first downward move was mainly caused by financials that were (or were not) affected by the subprime woes. The second downward move, the one that we're in now, is not caused by financials - even though all newspapers, television stations and websites will tell you that investors are selling on subprime fears. And the financial sector is the only one that is going up again! The main sectors that are now hit are services, basic materials and to a lesser extent the energy sector. These are the sectors that had not yet had serious sell-offs and investors are now simply taking profits, based on fear or emotions if you like. In addition to that, the carry trade has its effect as well, which has affected precious metals prices as well.
All this means that you're now able to buy dividend cannons like Southern Copper at a p/e below 10, a growth company like Companhia Vale at a p/e of 9 and Freeport-McMoran at a p/e of 8.4. And these are not companies that have performed badly so far this year! This Thursday's sell-offs also mean that telecom stocks are reasonably priced again, even though this is not one of my favourite sectors. It means you can buy Apple at $112, where hardly anything's changed since everyone wanted the stock at $140. (I personally continue to think that it's crazy to pay over 30 x earnings for any company, unless it's a junior company with great prospects, but I seem to be the only one)
All I can say is that today we are one step closer to a turnaround, which doesn't necessarily mean that 12500 was the bottom for the Dow. There may be a further drop, but I am pretty confident that we will not see a drop as fierce as the one we've seen this Thursday. Profit has now been taken in the sectors that are fundamentally the strongest sectors and these best-performing sectors are the last ones to get hit.
From this I can conclude that the bottom is near. I will therefore not sell any of my stocks and wait for better times to come, however painful this may be. The only thing one can do is write some calls or buy some puts, just in case we haven't seen the bottom yet. I still think the precious metals are the sector to be in and especially gold. I will therefore look for a new long position in gold, once again with a stoploss. To all investors who felt the way I felt this week, hold on tight, start shopping again, but whatever you do, don't be the last one selling. After all the economy can't be that bad, because my fiancee's still out there shopping for shoes as if nothing changed this week...
Disclaimer: The author has no position in any of the above-mentioned stocks.
04 June 2007
An early June update...
My "stockpicks fund" showed only minor gains the past month as mining companies had a difficult time. The gold price struggled and fell 6% to 652, while only Capitalia benefited from M&A news. June should be a better month for mining companies (GRZ, KRY, DROOY, CVRD, ORM.L), which should help my virtual fund to further outpace most global stock markets.
All stocks in euro unless mentioned otherwise. Stocks marked (*) have been sold as target price has been reached.
| Date | Fund | Purchase | Current | ROI% | Target |
|---|---|---|---|---|---|
| 18Dec2006 | Aareal Bank | 35.50 | 38.50 | +8.5% | 44.40 |
| 13Dec2006 | ABN Amro* | 24.10 | 28.00 | +16.2% | 28.00 |
| 16Feb2007 | Ahold | 7.97 | 9.21 | +15.6% | 10.00 |
| 16Nov2006 | Banco Pastor* | 14.15 | 18.00 | +27.2% | 18.00 |
| 27Nov2006 | Capitalia | 7.00 | 7.60 | +8.6% | 8.50 |
| 19Feb2007 | Companhia Vale | $35.90 | $47.02 | +31.0% | $55.00 |
| 12Jan2007 | Crystallex | $3.12 | $4.55 | +45.8% | $6.00 |
| 24Jan2007 | DRDGold | $0.83 | $0.85 | +2.4% | $1.10 |
| 21Dec2006 | Fiat Group | 14.50 | 21.47 | +48.1% | 19.33 |
| 12Jan2007 | Gold Reserve | $3.94 | $5.70 | +44.7% | $12.00 |
| 10Dec2006 | Hagemeyer | 3.64 | 3.63 | -0.3% | 5.00 |
| 16Dec2006 | Iberia* | 2.81 | 3.30 | +17.4% | 3.30 |
| 10Mar2007 | North Am. Galvanising* | 5.18 | 12.06 | +132.8% | 8.00 |
| 28Nov2006 | Ormonde Mining | 0.24 | 0.16 | -33.3% | 0.40 |
| 7Dec2006 | Rhodia | 2.60 | 3.07 | +18.1% | 3.20 |
| 30Nov2006 | SolarWorld | 46.10 | 65.65 | +42.4% | 69.12 |
| 25May2007 | Tsakos Energy Nav. | $63.50 | $64.23 | +1.1% | $90.00 |
| 2Dec2006 | Vallourec | 204.00 | 234.89 | +15.1% | 250.00 |
| +25.5% |
03 May 2007
An early May update...
It's really going somewhere now. I must admit that I am quite pleased with my stock pick performance so far this year. Obviously a record high for many stock exchanges helps, so we have to wait and see how these stocks perform during worse times. For the time being, I plan to hold Fiat as mentioned in my April posting, but I consider NGA 'sold' at 12.06.
All stocks in euro unless mentioned otherwise. Stocks in bold have been sold as target price has been reached.
| Date | Fund | Purchase | Current | ROI% | Target |
|---|---|---|---|---|---|
| 18Dec2006 | Aareal Bank | 35.50 | 39.01 | +9.9% | 44.40 |
| 13Dec2006 | ABN Amro | 24.10 | 28.00 | +16.2% | 28.00 |
| 16Feb2007 | Ahold | 7.97 | 9.88 | +24.0% | 10.00 |
| 16Nov2006 | Banco Pastor | 14.15 | 17.54 | +24.0% | 18.00 |
| 27Nov2006 | Capitalia | 7.00 | 6.94 | -0.9% | 8.50 |
| 19Feb2007 | Companhia Vale | $35.90 | $42.61 | +18.7% | $55.00 |
| 12Jan2007 | Crystallex | $3.12 | $3.98 | +27.6% | $6.00 |
| 24Jan2007 | DRDGold | $0.83 | $0.86 | +3.6% | $1.10 |
| 21Dec2006 | Fiat Group | 14.50 | 21.77 | +50.1% | 19.33 |
| 12Jan2007 | Gold Reserve | $3.94 | $7.25 | +84.0% | $12.00 |
| 10Dec2006 | Hagemeyer | 3.64 | 3.49 | -4.1% | 5.00 |
| 16Dec2006 | Iberia | 2.81 | 3.30 | +17.4% | 3.30 |
| 10Mar2007 | North Am. Galvanising | 5.18 | 12.06 | +132.8% | 8.00 |
| 28Nov2006 | Ormonde Mining | 0.24 | 0.16 | -33.3% | 0.40 |
| 7Dec2006 | Rhodia | 2.60 | 3.00 | +15.4% | 3.20 |
| 30Nov2006 | SolarWorld | 46.10 | 58.65 | +27.2% | 69.12 |
| 2Dec2006 | Vallourec | 204.00 | 204.28 | +0.1% | 250.00 |
| +24.3% |
Something not so financial, or is it?
It's been a while again, but I hope these long periods of absence won't happen too often anymore this year. I had a three-week holiday in Indonesia, which ended up being everything but a holiday. It was a period of family visits, my fiancee being from Indonesia, and a period of preparations for our wedding due early 2008 on Java. Usually, this site is a place for financial blogs and everything linked to the financial world, but there really is more in life than finance. Hence, I am sharing with you our findings in earthquake stricken Yogyakarta. The quake took place in May 2006, almost a year ago as we took our handycam and some money from ourselves, my family and some really great friends to the epicentre in Bantul. This was one of the villages around Yogyakarta where many of my fiancee's relatives live or lived. Upon arrival, we were shocked to see in what state the houses where. Most houses had not been rebuilt or only partly. The people living in these villages are generally humble people with little materialistic desire. All they need is a house, food and clothing to be happy. All home owners were informed by their Local Government that they were entitled to 45 mio rupiah (EUR 3,600). Yet most people haven't received a penny up until this day. That by itself is quite shocking, having to live without a roof or without any help of your Government, even medical help, for eleven months. But what is more shocking was that there were actually beautiful houses rebuilt in those villages. More beautiful than ever before. We couldn't help but ask around who these people were that built those beautiful houses there. The answer shocked us even more than the sights when we arrived that day. We were told that these houses were owned by Muslim villagers who lost their houses as well. These houses had apparently been funded by local Government aid and by donations from certain Muslim countries. Unfortunately, my fiancee's family happens to be Catholic. May I just say that when we in the Netherlands donate money, we do not discriminate on religion, skin colour, age or gender. We give money to victims in general. Shocking, but certainly an eye opener.
02 April 2007
An early April update...
It's been a volatile month with crashes here and there, followed by serious gains. As described in my previous posting, there's also a lot of M&A activity going on among my stock picks. Time for another update on my favourite stocks. One month ago, my stock picks were only up 3.5%, but now the gains are more colourful.
All stocks in euro unless mentioned otherwise. Stocks in bold have been sold as target price has been reached.
| Date | Fund | Purchase | Current | ROI% | Target |
|---|---|---|---|---|---|
| 18Dec2006 | Aareal Bank | 35.50 | 36.34 | +2.4% | 44.40 |
| 13Dec2006 | ABN Amro | 24.10 | 28.00 | +16.2% | 28.00 |
| 16Feb2007 | Ahold | 7.97 | 8.80 | +10.4% | 10.00 |
| 16Nov2006 | Banco Pastor | 14.15 | 17.10 | +20.8% | 18.00 |
| 27Nov2006 | Capitalia | 7.00 | 6.78 | -3.1% | 8.50 |
| 19Feb2007 | Companhia Vale | $35.90 | $37.15 | +3.5% | $55.00 |
| 12Jan2007 | Crystallex | $3.12 | $3.92 | +25.6% | $6.00 |
| 24Jan2007 | DRDGold | $0.83 | $0.70 | -15.7% | $1.10 |
| 21Dec2006 | Fiat Group | 14.50 | 18.87 | +30.1% | 19.33 |
| 12Jan2007 | Gold Reserve | $3.94 | $6.57 | +66.8% | $12.00 |
| 10Dec2006 | Hagemeyer | 3.64 | 3.58 | -1.6% | 5.00 |
| 16Dec2006 | Iberia | 2.81 | 3.30 | +17.4% | 3.30 |
| 10Mar2007 | North Am. Galvanising | 5.18 | 5.36 | +3.5% | 8.00 |
| 28Nov2006 | Ormonde Mining | 0.24 | 0.18 | -25.0% | 0.40 |
| 7Dec2006 | Rhodia | 2.60 | 2.83 | +8.8% | 3.20 |
| 30Nov2006 | SolarWorld | 46.10 | 58.06 | +25.9% | 69.12 |
| 2Dec2006 | Vallourec | 204.00 | 195.48 | -4.2% | 250.00 |
| +10.7% |
28 March 2007
Mergers, acquisitions & rumours
It's good to be back after having travelled for business for more than two weeks. During my absence, a lot has happened to certain funds that I discussed some time ago. Especially news on ABN Amro, Iberia, Gold Reserve Inc, Crystallex, Beacon Power Corp and Ahold is worth mentioning.
First of all, I indicated last year that ABN Amro would certainly be subject of takeover talks as the banking industry consolidation in Europe would start to take off. Earlier this year, it was rumoured (on advice of certain shareholders) that ABN Amro could be split up, unlocking value for the shareholders themselves. This was later denied by CEO Rijkman Groenink, who stated that this would certainly not be the preferred option. Then came rumours of a merger with Barclay's Bank, possibly creating Europe's second largest bank after HSBC. This rumour actually seems more than just a rumour and has a reasonable chance of success. The share price went up quickly from EUR 27 to EUR 32 and might even go a bit higher as a deal gets closer. This jump will however not influence the performance of my list of stock picks I had cashed ABN Amro at EUR 28.
Then there were takeover talks regarding Spanish airline company Iberia. It was rumoured that Lufthansa was willing to pay EUR 3.90 and that several other groups were interested in buying Iberia, including British Airways and Texas Pacific Group. Iberia was on my list of stock picks but was taken off when its price target of EUR 3.30 had been reached.
In January this year, I wrote about Gold Reserve Inc and Crystallex having great potential based on the high likelihood of obtaining permits from the Venezuelan Government as well as the low valuations of both shares. On Wednesday, both shares jumped, but are still very far from reaching price targets set for this year. Now that the major risk of not being able to obtain permits has been eliminated, I see no reason for the low valuations of both shares and it should therefore be expected that both shares will rise further, supported by higher prices for precious metals.
Beacon Power Corp rose from USD 0.82 to USD 1.02 last Thursday on news of a successful outcome of its flywheel technology field trial tests. This should be seen as a significant milestone towards further growth of the company's sales. In my opinion, this development stage company has some serious potential that most investors have yet to find out about. The stock has dropped back to USD 0.83 after its rise but has now continued its upward move and may be expected to come up with further good news on its technology in the near future.
Finally, Ahold has moved up from EUR 7.50 to EUR 8.50 this month on the expected sale of US Foodservice and Tops Supermarkets in combination with the grocer's low valuation. In addition to that, there were some rumours of Ahold being a potential acquisition target.
So I am happy to see that most of my predictions seem to be coming true sooner or later. My list of stock picks may not be as successful as my 'mining fund', but 10% ROI in three months (on average) isn't bad at all, is it?
08 March 2007
Two weeks of absence...
Tonight I will be travelling to Asia for business and I will be away for two weeks. Chances that I will be able to find the time to post some words are minimal and therefore you are likely to see two weeks of silence. However, I will be back in time to provide you with an end of March update on my favourite stock picks, my 'green picks' and my 'mining picks'.
Knowing that I might not always be able to trade in the coming two weeks, I had to rearrange my portfolio a little bit. As such, I sold Euro Ressources at a loss (1.05 (1.23)) and Yamana Gold at a profit (14.35 (9.78)). I bought BCON at $0.89, URZ at $4.48, ELR at $9.73, ORM.IE at EUR 0.185 and RNO at $3.27. I kept all my other mines in my portfolio as well as my long position in gold with an automated stoploss at $624. This might seem somewhat risky, but I am confident that gold has bottomed and that from here the direction will be upward. One thing you might have noticed is that I am adding alternative energy stocks to my portfolio. I was a previous holder of ESLR and I am still a great fan of this solar energy company. Thankfully, I sold at $15 previously and had the chance to get in at a much lower price. I expect the previous high to be taken out in 2007, but more about this when I return. Till we meet again!
27 February 2007
Markets plunge; metals join in on the fun
It is now 11pm Amsterdam time and what we have whitnessed today is not something we see every day. I bought two puts on the Dutch AEX index on Friday and sold them today, after which I bought one single put 490 (March series) later on the day at a lower price: Eur 1.85. Certainy not a big investment, but then I do not hold an impressive track record with options. I therefore tend to be very careful when trading with options. Closing price of my put was Eur 3.40 with an AEX some ten points below yesterday's close. After European equity markets closed, we whitnessed the American indices being slaughtered, taking commodities along. I got worried about my mining stocks as the mining sector is among the hardest hit of all sectors today. Thankfully, someone posted some comments by Jim Sinclair, who had already said the following - one day before this slaughterfest: "At first the equity market breaks would bring in temporary sellers of gold. However, quite quickly thereafter and most certainly when the US Dollar also gets hit, gold will steady and start its move to all the Angels." Thanks for those words of hope and wisdom, Mr Jim Sinclair. As for tomorrow, I will watch the indices closely and I will specifically watch the RSI level of the AEX, which will be critical. If the RSI in the daychart breaks through 40, we are seeing a bull market turn into a bear market. Good luck to all and don't panic.
02 January 2007
Predictions...
First of all a very happy New Year to all readers. I have taken a short holiday to do some work in the house and will be following the exchanges a bit more closely again as of today.
At the end of each year, there are usually quite a couple of stock competitions online, of which I would like to mention my picks.
The first one is the annual mining competition at golddrivers, where you choose ten junior mining stocks that will make up your portfolio for the year to come. I've selected ten interesting mines, some of which are currently in my 'real' portfolio, too. These are the following:
- Franklin Mining Inc (FMNJ.PK)
- Canadian Arrow Mines Ltd (CRO.V)
- Odin Mining & Exploration Ltd (ODN.V)
- Consolidated Gold Win Ventures (CGW.V)
- Canasil Resources Ltd (CLZ.V)
- Noront Resources Ltd (NOT.V)
- Silver Wheaton Corp (SLW.TO)
- Yamana Gold Inc (AUY)
- Searchgold Resources Inc (RSG.V)
- Exeter Resource Corp (XRC.V)
- ABN Amro
- Aegon
- Hagemeyer
- Qurius
- TNT Post
26 November 2006
Gettin' Started
Dear reader,
You're now looking at the start of something beautiful. I'm gonna be posting a lot of tips here on great ways to make money using international stock exchanges. Mostly, the European exchanges. For one simple reason: it's hard to find good information on European stocks, whereas there are loads and loads of blogs and websites on American stocks.
Keep checking as I will be doing my utmost to make this a success. Hopefully with your support!
Best regards,
Joey Keasberry
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