Saturday, July 31, 2010

George Soros investments

Last time we provided insight in current Jim Rogers portfolio and investing strategy. Today let's review where another investment guru, George Soros, sees big potentials.

George Soros is completing negotiations to buy4% stake in Mumbai Stock Exchange (Bombay Stock Exchange). George, as well known believer in long-term growth of the Indian market, might have wanted more, but the rules prohibited him from having more than 5% share.

Soros Fund Management Company offers $ 40 million, making the whole of Asia's oldest stock exchange valued at equal to one billion. The trade is the latest in a series of investments in Indian stock and derivative markets.

Indian stock market is, unlike for example the U.S., only now opening arms to new technologies, which should attract additional liquidity, such as through the HFT (high-frequency trading).

In June, the fund Temasek from Singapore acquired 5% share in the competitive National Stock Exchange of India for about 145 million USD. In the first half of Caldwell Financial, or by Argonaut Private Equity bought shares in the Bombay Stock Exchange. Also Deutsche Börse is among shareholders since 2007.

In India, therefore, is and will be very lively. Bet on the Indian market seems to be more interesting.

Sunday, July 18, 2010

Investing like Jim Rogers.

Here are few notes on current Jim Roger's investment strategy.

- Jim is still bullish with gold. He predicts that gold gets above $2000 within 10 years.

- Also he considers other precious metals as an attractive investments. While gold is reaching all time high, silver is 70%, palladium 50-60%, platinum 30% below that level.

- Short positions in financial institutions.

- Regionally he still favors Chinese stocks and Chinese currency.

Saturday, June 5, 2010

How to invest in Chinese Yuan?

There are not some many safe heavens for investing with current fears about European debts, still sluggish US labour market, political tensions in Korean peninsula and between Turkey and Israel. Is the right time for placing your money in Chinese yuan? How to invest in Chinese currency?

We can see declining different assets classes across the board. Only safe peers are gold and US dollar. But what about Chinese yuan? Even with government actions against overheating growth Chinese economy is one of the fastest growing. Based on latest estimates Yuan is undervalued by 20-40%.

US suffers a huge trade deficit, which is formed predominantly by artificially weak yuan, is pegged to the dollar since July 2008. At that time, China pegged it to support its export policy. There is growing pressure also directly from China itself. It is only a matter of time to strengthen Chinese currency against US dollar.

Here are few tips for investors willing to invest money to Chinese currency.

Currency ETFs

Market Vectors Chinese Renminbi/USD ETN (CNY). This is actually exchange traded notes which provides exposure to exchange rates of foreign currencies.

WisdomTree Dreyfus Chinese yuan (CYB). This ETF follows money market rates in China and changes in value against US dollar.

Country ETFs

Another way how to benefit from strengthening yuan is investing in Chinese or Hong Kong stocks. These stocks (especially consumer goods stocks) should be increasing in parallel with stronger Chinese currency. Here are major regional ETFs.

iShares MSCI Hong Kong Index (EWH)
iShares FTSE/Xinhua China 25 Index (FXI)

Sunday, January 3, 2010

Best investment for 2010

Thank you for taking part in poll at StockWeb, The best investment in year 2010. What do StockWeb readers consider as a best assets class for this year. Here are the results:

international stocks 50%
energy commodities 35%
precious metals 35%
US stocks 28%
soft commodities 17%
bonds 14%

From the survey it is obvious that most of you believe in returning economic growth and continuing stock /commodity rally. International stocks seems to be the best choice for new year.

January effect in stock markets

The first month of the year are in mature markets traditionally profitable. The definition talks of so-called "January effect".

Behind the January effect is a simple historical fact that investors in the United States sell equities at the end of the year for tax purposes. In January they buy back into their portfolios, thus helping to stronger growth in the major stock indexes.

Pragmatic view of the January effect, however, speaks of the traditional large influx of new money in mutual and hedge funds which are reflected in new stock purchases.

There is another relation connected with January effect. History says that when January ends in the black (note the positive value) is nearly 75% chance that the whole year ends up with positive return.

The picture above shows average return for each month during the period from 1927 till 2001. It is an indicator for some seasonal trading strategies. As you can see January is undoubtedly the best month of the year. But for example last two years didn't confirm the seasonality. Two years ago it was just beginning of the bear market and year ago continuing selling pressure in global recession.

Sunday, December 20, 2009

3 investment analysis: NASDAQ, Gold, Dollar

We have entered the Christmas season which is usually typical by light trading activities and volumes. We have more time now for our analysis and also it is the the time for creating or adjusting your investing strategies and setting targets for the year 2010.

Today I have 3 interesting video analysis produced by Adam Hewison. Unbeatable NASDAQ, trading volatility with Gold and investing in US dollar.

1. Unlike Dow Jones Industrial Average and S&P 500, NASDAQ continues to reach all time highs every week. This video analysis for NASDAQ show if there is still support for such a growth and where we are heading.

Nasdaq chart
2. Second analysis provides insight in gold price and outlook for coming months. We have experienced parabolic growth and deep fall from highs.

3. Greenback is back. US dollar sharply strengthens against major currencies after better macroeconomic readings in last months. How to invest in US dollar now?

Sunday, December 13, 2009

Investments and market trends for 2010

Stock markets around the world have experienced 9 months unprecedented growth. Only in the United States it is just over 60 percent. What about the year 2010? Retaining stock markets growth or correction? As usual, end of year period is the time for outlook, predictions for investments and market trends.

U.S. stocks are still well below its peak from 2007. This does not automatically mean that they can still be considered cheap. P/E ratio of S&P 500 is already 20 percent above the long-term average.

P/E ratio in chartsource: R. J. Schiller. Links for fundamental historical data.

But still there is a space for further growth but in slower pace. On average estimated revenue growth in 2010 is 27%. The growth supported by improving mood in global markets and ever weakening U.S. dollar, which makes U.S. goods cheaper.


With coming economic recovery it is best to invest money in high-quality companies. Particularly those that have big cash and continue to make high profits. It is important also to think globally. Next year is expected that companies will overtake consumers in spending. Especially in Europe and Asia.


Is also pragmatic in 2010 to invest in bonds of shorter maturity and focus mainly on quality. You will protect yourself against raising interest rates.

Reasonable option is to mix a high-yield bonds and government bonds. Investors should also not ignore the threat of inflation and thus it is appropriate to invest part of your money in bonds which are protected against inflation, known as TIPS - Treasury Inflation Protected Securities.