Many big European banks have lost half their value
Source: CNN Money
http://money.cnn.com/2016/08/02/investi ... index.html
European equities trade at about 16 times earnings, versus 18 times for the S&P 500.
As grim as the outlook has been for Europe, that discount could deepen -- perhaps even to 14 times
In my True Wealth newsletter, we own the main Greece exchange-traded fund (ETF), which is called the Global X MSCI Greece Fund (GREK).
We have limited our downside risk with a “hard” stop loss at its all-time low of $5.67. If GREK closes below $5.67, we will sell the next day.
As I write, GREK trades around $7.27. So if you enter this trade, your downside risk is roughly 21%. Meanwhile, your upside potential is a triple-digit-percentage profit. Even after a triple-digit-percentage profit, Greece would still be down massively from its highs.
Triple-digit upside and 21% downside – that’s a reward-to-risk ratio of 5-to-1. I like that kind of setup.
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