TOL as of Jan 29, 2017
Beware of Complacency
The markets have continued to grind higher. as if that's the only direction for the market.
And while we wait for Trump to trip, the VIX has now dropped to 10.58.
However, before we run off to buy some VXX or UVXY (2x Leverage), to bet against the complacency, it's timely to remind ouselves that complacency (VIX) in the past, have lasted for up to two years.
Anyway, none of the simmering issues have exploded yet eg. Ukraine, South China Sea, Syria, Turkey, Israel, North Korea, Brexit, European Contagion, High USD, Higher Interest Rates, Chinese NPLs, Decreasing EPS etc
It's a long list and all we need is just one issue to get things going.
My strategy has not really changed from a few weeks back so it's not necessary for me to go through it again this week.
Happy Lunar New Year & Happy Holidays !
Commodities:- Risk-On (Data as of Saturday)
1. Oil - Flat. US$53.20 from US$53.25 last week from US$52.52 two weeks ago. Expecting Oil to be range-bound with a negative bias. Vested in RH Petrogas
a. Glut 1m bpd - rebalancing in 2018?; Supply 98.3m bpd?; Demand 97.3m bpd?
b. Global Stockpiles: 2b barrels ?
c. US SPR: 700m barrels; To sell 190m barrels from 2017-2025
d. Iran used to export 4m bpd; Currently, at 3.6m bpd; 40m barrels in storage
e. US Oil Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells
f. US Supply expected to increase by 250,000 bpd
g. China (4th largest producer) - Reserve life fallen from 10 years to 6 years
h. China Supply: Down 7% (300,000 bpd)
i. Saudi Aramco's IPO in 2018. Incentive for Saudis to maintain high oil prices ?
j. China: SPR reached 51/90 days; 2017 Imports to decrease?
k. Russia: ramping drilling activities in existing brownfields
l. OPEC: Cutting Production by 1.2m bpd
m. Libya: 700k bpd from 200k bpd (+0.5m bpd ); Used to produce 1.6m bpd
n. Fracking: Additional 0.5m bpd @ US$60; +1m bpd @ US$70 ?
viewtopic.php?f=33&t=7550&start=210
2. Natural Gas - Higher: US$3.39 from US$3.20 from US$3.42
a. Support 3.10; 2.85; 1.70; Resistance $4.00
b. Uses: Heating, Cooking, Transportation (CNG), Ammonia (Fertiliser), Hydrogen (Chemical Industry), Fabrics, Glass, Steel, Plastics Paint etc
c. High: US$13.69 (2008); Low: US$1.61 (March 2015)
d. Natural gas rigs: Dropped from 1,606 (2008) to low of 81. Now at 129
e. New injections into storage are at about 40% below the pace of two years ago
f. EIA: Supply now only 2% above the 5 year average vs +40% in March 2016
g. Cold Winter; The heating degree days (HDD) was 11% above average
h. LNG are being exported from US to Latin America and AsiaTrade
i. Trade war with Mexico will bring prices down
j. Suppy increasing by 4% pa; Demand growing by 7% pa
viewtopic.php?f=33&t=1863&start=130
3. Gold - Lower. US$1191 from US$1210 from US$1197. Record US$1920
a. Electronics, Gold Coins, Central Banks, Jewellery etc.
b. 250 oz of paper contract for every oz of physical gold holding on Comex ?
c. Output to fall by 100 metric tons (3%), from 3,150 in 2015 to 3,050 in 2016
d. Demand increasing by Muslim countries now that Gold is a halal investment
e. Would India temporarily ban gold imports ?
f. Indians are supposedly paying 2 times spot due to their cash issues
g. Rising USD and interest rates, would not be good for gold
viewtopic.php?f=33&t=7589&p=202084#p202084
4. Silver - Flat. US$17.15 from US$17.12 from US$16.84. Range High: 49
a. Solar Panels, Data Storage, Antibacterial products, Silver Coins, Jewelery etc
b. Demand: 1.2b ounces in 2015
c. Supply: 0.9b ounces in 2015
d. 35% (7700 metric tons) for Electronics
e. 25% (5500 metric tons) for bullions & coins
f. India imports more Silver than the US
viewtopic.php?f=33&t=7589&p=202084#p202084
5. Coffee (Mar 17th ) - Lower. US$152 from US$153 from US$149
L US$135; US$120; H US$175; US$300 (2011). Sold JO
a. 150m Americans drink coffee daily (400m cups)
b. America imports US$4b of coffee yearly
c. Supply: 152m bags; US$19b trade; Deficit 3.5m bags;
d. Demand 155m bags. By 2030, rising to 200m bags; 5% growth pa
e. Arabica, which is grown in Brazil (50m bags), is used in premium oulets. At risk from higher temperatures and more resilient pests
f. Robusta, grown in Vietnam; Used in Instant Coffee; 40% more caffeine
g. What would be the breaking price for coffee ? In 2011, it touched US$300
h. Coffee Rust Disease in Central America lowered supply by 30% over past 3 yrs
i. By 2050, suitable land will halved and demand would have doubled
j. Farmers in Central America replacing coffee with cocoa due to climate change
k. Over 2.25 billion cups of coffee are consumed in the world every day
l. Growth: USA +1.5%; China +5%; India +4%
m. Bumper crops in Brazil, Colombia and Honduras
viewtopic.php?f=33&t=3812&start=80
6. Uranium (U3O8 UXC) - Higher. US$23.00 (Jan 23) from US$22.50 (Jan 16) from US$22.00 (Jan 09). Vested in Cameco (CCJ)
a. Breakeven: US$40 per lb
b. High US$140 (2008);
c. Global production: 160m lbs pa
d. Stockpile: 1b lbs ( till 2022) ; Companies normally store 5-7 years supply
e. Japanese Demand: 13 lbs pa; Starting 21/54 reactors ?
f. Global Demand: 180m lbs pa
g. Number of Nuclear plants: +8 pa for next 20 years, from 440 to 595
h. 61 new reactors under construction; 149 new reactors planned
i. China: 35 existing nuclear plants; Currently, building 20; To build 177 more
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more
k. 25% long-term supply contracts expiring in 2017-18; 75% between 2017-2025;
l. Russia withdrew from Nuclear deal in Oct 2016; With Trump, would there be another deal or would there be another arms race ?
m. Paris Climate Deal - implemented in November 2016;
n. China's air pollution worsening so nuclear energy maybe expanding
o. Some buyers are locking in long term contracts at US$40, twice the spot rates
p. Kazakhtan reducing supply by 10% (40% of global production)
viewtopic.php?f=33&t=705&start=80
7. Lithium - not vested
a. Global Lithium Demand: 185 ktpa; In 2025: 500 ktpa; Growth: 11% pa
b. Batteries: 40% demand now rising to 70% in 2025; Growth 45% yoy
c. 81% Global Supply: Chile, Australia and Argentina
d. 83% Global Suppy: Turning Around? Albemarle, SQM, FMC and Sichuan Tianqi
e. Cost of lithium-ion battery fell 65% to around $350 per kwh
f. Vehicle: LIT (not vested)
viewtopic.php?f=33&t=1667&start=20
8. Palladium (Mar 17) - Lower; US$741 from US$789 from US$752
a. Support: US$600; US$500; US$200; Resistance: US$800; US$900;
b. Used in Catalytic Converters, Electronics, Dentistry, Medicine, Hydrogen Purification, Chemicals, Groundwater Treatment, Jewelry and Fuel Cells
c. Auto industry consumes 80% of supply
d. Demand by Auto industry doubled in past 10 years
e. Growth Demand: 3% a year for next 4 years
f. Russia and South Africa produced 3/4 of the world's mined palladium supply.
g. Heading toward its 8th annual supply deficit in 2017; 650,000 ounces in 2016
h. Vehicle: PALL (not vested)
viewtopic.php?f=33&t=7070
9. Zinc; Lower - US$2750 from US$2757 from US$2783
a. Supply Deficit 1.2m tons;
b. High US$4400 (2007); Low $1600 (Jan 2016)
c. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer,
d. Producers: Glencore (GLEN.L), Trevali (TV.TO), Nevsun Resources (NEV)
10. If there's a crash, Commodities would not be spared.
11. The High USD is not good for Commodities
12. Global economy is worsening eg. potential trade wars etc
Equities - Risk-On ( Data as of Saturday every week )
1. US Equities - Higher. 2295 from 2271 last week from 2275 two weeks ago. No Trade
viewtopic.php?f=11&t=7643&start=200
2. HK Equities - Higher. 23361 from 22886 from 22937; No Trade
a. Support 21575; Resistance 24100;
viewtopic.php?f=10&t=7470&start=120
3. Shanghai Equities - Higher. 3159 from 3123 from 3113; Support at 2450; No Trade
viewtopic.php?f=10&t=7190&start=210
4. Spore Equities - No Trade
5. Japan Equities - Higher. 19467 from 19138 from 19287
6. Malaysian Equities - No Trade
7. Australian Equities - No Trade
Currencies- Mixed
1. USD to JPY - JPY Weaker. 115.08 from 114.60 last week from 114.47 two weeks ago
a. 52 week range is 76 to 126
viewtopic.php?f=32&t=4205&start=180
2. SGD to MYR - SGD Weaker; 3.0963 from 3.1188 from 3.1280
a. Oversold ?
3. AUD to USD - AUD Weaker. 0.7557 from 0.7567 from 0.7509
a. The range is 0.70 (2016) to 1.10 (2011)
b. Am concerned that the spat between the US and China will affect the AUD
viewtopic.php?f=32&t=5256&start=130
4. AUD to SGD - AUD Stronger. 1.0812 from 1.0780 from 1.0707
a. The range is 0.98 (2016) to 1.36 (2012).
b. Am concerned that the spat between the US and China will affect the AUD
5. AUD to MYR - AUD Weaker. 3.3476 from 3.3621 from 3.3491
a. The range is 2.20 (2008) to 3.38 (2017)
b. Converted some AUD to MYR
6. EUR to USD - EUR Weaker. 1.0700 from 1.0707 from 1.0646
a. Will not be investing in the EUR as I think that it's in a multi-year decline
viewtopic.php?f=32&t=5523&start=100
7. USD to HKD - HKD Stronger. 7.7549 from 7.7557 from 7.7532
a. 52 week range is 7.7452 - 7.8296.
b. Will they remove the peg to the USD during a crisis ?
viewtopic.php?f=32&t=3529&start=40
8. USD to MYR:- MYR Stronger. 4.4296 from 4.4430 from 4.4600
a. 52 Week Range is 3.27 to 4.54.
b. Lowest: 4.60 (1998)
c. Decoupling of the MYR and Oil ?
viewtopic.php?f=32&t=397&start=60
9. USD to SGD:- SGD Weaker; 1.4306 from 1.4246 from 1.4259
a. High 1.70 (2004); Low 1.20 (2011)
b. Expecting the SGD to drop against the USD
viewtopic.php?f=32&t=136&start=100
10. USD to CNY:- CNY Weaker; 6.8760 from 6.8728 from 6.8984
a. Expecting the CNY to continue dropping against the USD
viewtopic.php?f=32&t=7720&start=90
11. GBP to USD:- GBP Stronger. 1.2547 from 1.2373 from 1.2183
a. Will not be investing in the GBP versus the USD, as I think that it's in a multi-year decline
viewtopic.php?f=32&t=333&start=80
12. GBP to MYR:- GBP Stronger. 5.5584 from 5.4973 from 5.4337
a. Which has more effect ? Article 50 or Malaysian Election ?
13. Dollar Index - USD Weaker. 100.53 from 100.74 from 101.18
viewtopic.php?f=32&t=7616&start=60
Others
1. Sentiment - Complacent ?
2. Headwinds - Global Derivatives (US$700t); Global Debts (US$225t, 225% Global GDP); Global Corporate Debt (US$50t); China Debts (US$23t); Chinese Corporate Debts (US$18t); Chinese Local Government Debts (US$3t); China Bad Debts (US$1.5t); US Unfunded Debts (US$170t); US Bank Debts (US$60t); StockMarket Cap/GDP(200%); US Corporate Debt (US$5.5t); Emerging Markets US$ Debts (US$10t); US$ Oil Bad Debts (US$0.2t /US$2.5t); Foreigners Holding of US Treasuries (US$6.3t); US Students Loan (US$1.4t, +20% pa, 40% default); European NPLs (US$1.3t); Italian NPLs (US$0.4t); Junk Bonds Maturing (2017-2021) - US$1.5t; US Feds Leverage (113 to 1);
3. Tailwinds - Low Interest Rates, Cash Sidelines (US$60t); QE Programs US$18t - US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t); Negative Yield Bonds (US$10t); US Foreign Funds Repatriation (US$2.5t); Cash US Corps (US$1.3t); Cash Japanese Corp (US$2t); Buybacks, US Household Net Worth (US$89t); EM Consumption;
4. Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
5. Properties
a. Spore Properties
i) Prices declined by 11% since 2013; Sales dropped by half since 2013
ii) About 24,000 private homes are vacant
iii) Developers sold 8,000 homes in 2016 compared to 7400 in 2015;
iv) Supply: 13,000 in 2017; 9300 in 2018; 7300 in 2019
v) The existing stock of unsold homes may take three years to sell
vi) Americans became the 2nd most frequent buyers of high-end homes
vii) More than 800 condo units were resold at a loss in 2016 as economy slows
viii) Prices fell 3% in 2016 for third straight yearly decline
viewtopic.php?f=10&t=7750&start=40
b. Malaysia Properties
i) Knight Frank: Supply of about 44,000 high end condos in KL as of 1H 2016
ii) NAPIC: About 23% (19000/ 82,000) of residential & commercial properties from 1Q 2016 unsold
iii) Volume and Value of transactions declined 14% and 11%, in the first 9 months
viewtopic.php?f=10&t=4220&start=150
c. China Properties
i) About 4 years supply at Tier 3 & 4 cities
ii) Various new curbs in more than 20 cities
iii) Beijing is + 23.5% yoy
iv) Shanghai is + 31.2% yoy
v) Shenzhen is +36.8% yoy
vi) Guangzhou is +21.1% yoy
viewtopic.php?f=10&t=8150&start=30
d. HK Properies
i) Price has surged almost 370% from 2003 to Sep 2015
ii) 18,000 new units completed in 2016. 94,000 units in next 3-4 years (up 40%)
iii) About 19,000 people left HK last year
iv) Margins have decreased to 25% from 40%
v) DB: Prices to drop 11% in 2017
vi) CS: Prices to drop 22% by end 2018
vii) Bocom: Prices to drop 20% to 30%, by end 2017
viii) Centaline: Mainland Chinese made up 16% of buyers during quarter
ix) DTZ: Prices to increase 5-10% by July 1, 2017
x) Citi: Prices to drop 15% in 2017
xi) 34,000 flats in pipeline for 2017
viewtopic.php?f=10&t=7785&p=202051#p202051
e. London Properties
i) Savills: 9% drop for luxury properties in 2016 and will not rise until 2019
ii) Hard Brexit: 5,000 jobs axed immediately? (1.1m jobs in Financial Services)
iii) London's population @ 8.7m. New households @ 50k pa. Supply 20k pa
iv) CEBR: Property prices in London to fall 6% in 2017
v) Molior: Homes built without buyer secured - 10,829, a 24% rise yoy
vi) Molior: 2 years to sell homes under construction
vii) Rightmove: Decline of 5% by end 2017
viewtopic.php?f=11&t=3673&start=70
6. Yield on 10 Year US Treasuries - Higher. 2.48% from 2.47% from 2.40%
Low 1.32%; High 2.69%.
a. The new regulation on Money Market Funds would probably be decreasing the yield for US Treasuries
7. Interest Rates:-
a. Expecting interest rates to rise slowly over next two years
b. About US$10t or about 1/4 of the world’s bonds now have negative yields
c. US Feds: Three rate hikes in 2017? Four rate hikes in 2018 ?
8. JNK (SPDR Barclays High Yield Bond ETF) - Higher. 37.00 from 36.75 from 36.78
9. Baltic Dry Index - Lower; 827 from 925 from 910; Low 290; High 1257; 2330 (2013)
The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Please use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments
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Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.
viewtopic.php?f=26&t=3168
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Winston's Investment Ideas 04 (Oct 15 - May 19)
Re: Winston's Investment Ideas 04 (Oct 15 - Dec 17)
by winston » Sun Jan 29, 2017 5:40 am
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It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston - Billionaire Boss
- Posts: 111129
- Joined: Wed May 07, 2008 9:28 am
Re: Winston's Investment Ideas 04 (Oct 15 - Dec 17)
by winston » Sun Feb 05, 2017 9:12 am
TOL as of Feb 05, 2017
New Money From the New Month
It's a new month again, so new money would be flowing into the markets again.
So was the spike on Friday due to this new money or would the new money be coming next week?
Anyway, there's normally a spike in the early part of a new month and the current good earnings results will certainly help sentiments.
I'm still not convinced that this rally has legs but so far it has been strong. Even a HK Feng Shui master recently mentioned that this rally can last till September. Therefore, I need to remind myself not to aggresively short the market until later in the year.
I'm still cautious but trying not to be pessimistic. I'm nibbling here and there on long term stories, with the view that if there's a crash tomorrow, I would be willing to wait 3 years for things to improve, as the fundamentals are behind me.
Commodities:- Risk-On/b] (Data as of Saturday)
1. Oil - Higher. US$53.85 from US$53.20 last week from US$53.25 two weeks ago. How will the new sanctions on Iran affect Oil ? Vested in RH Petrogas
a. Glut 1m bpd - rebalancing in 2018?; Supply 98.3m bpd?; Demand 97.3m bpd?
b. Global Stockpiles: 2b barrels ?
c. US SPR: 700m barrels; To sell 190m barrels from 2017-2025
d. Iran used to export 4m bpd; Currently, at 3.6m bpd; 40m barrels in storage
e. US Oil Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells
f. US Supply expected to increase by 250,000 bpd
g. China (4th largest producer) - Reserve life fallen from 10 years to 6 years
h. China Supply: Down 7% (300,000 bpd)
i. Saudi Aramco's IPO in 2018. Incentive for Saudis to maintain high oil prices ?
j. China: SPR reached 51/90 days; 2017 Imports to decrease?
k. Russia: ramping drilling activities in existing brownfields
l. OPEC: Cutting Production by 1.2m bpd
m. Libya: 700k bpd from 200k bpd (+0.5m bpd ); Used to produce 1.6m bpd
n. Fracking: Additional 0.5m bpd @ US$60; +1m bpd @ US$70 ?
viewtopic.php?f=33&t=7550&start=210
2. Natural Gas - Lower: US$3.05 from US$3.39 from US$3.20
a. Support 2.85; 1.70; Resistance $4.00
b. Uses: Heating, Cooking, Transportation (CNG), Ammonia (Fertiliser), Hydrogen (Chemical Industry), Fabrics, Glass, Steel, Plastics Paint etc
c. High: US$13.69 (2008); Low: US$1.61 (March 2015)
d. Natural gas rigs: Dropped from 1,606 (2008) to low of 81. Now at 129
e. New injections into storage are at about 40% below the pace of two years ago
f. EIA: Supply now only 2% above the 5 year average vs +40% in March 2016
g. Cold Winter; The heating degree days (HDD) was 11% above average
h. LNG are being exported from US to Latin America and AsiaTrade
i. Trade war with Mexico will bring prices down
j. Suppy increasing by 4% pa; Demand growing by 7% pa
viewtopic.php?f=33&t=1863&start=130
3. Gold - Higher. US$1222 from US$1191 from US$1210. Record US$1920
a. Electronics, Gold Coins, Central Banks, Jewellery etc.
b. 250 oz of paper contract for every oz of physical gold holding on Comex ?
c. Output to fall by 100 metric tons (3%), from 3,150 in 2015 to 3,050 in 2016
d. Demand increasing by Muslim countries now that Gold is a halal investment
e. Would India temporarily ban gold imports ?
f. Indians are supposedly paying 2 times spot due to their cash issues
g. Rising USD and interest rates, would not be good for gold
viewtopic.php?f=33&t=7589&p=202084#p202084
4. Silver - Higher. US$17.52 from US$17.15 from US$17.12. Range High: 49
a. Solar Panels, Data Storage, Antibacterial products, Silver Coins, Jewelery etc
b. Demand: 1.2b ounces in 2015
c. Supply: 0.9b ounces in 2015
d. 35% (7700 metric tons) for Electronics
e. 25% (5500 metric tons) for bullions & coins
f. India imports more Silver than the US
viewtopic.php?f=33&t=7589&p=202084#p202084
5. Coffee (Arabica Mar 17th) - Lower. US$146 from US$152 from US$153
L US$135; US$120; H US$175; US$300 (2011). Not vested
a. 150m Americans drink coffee daily (400m cups)
b. America imports US$4b of coffee yearly
c. Supply: 152m bags; US$19b trade; Deficit 3.5m bags;
d. Demand 155m bags. By 2030, rising to 200m bags; 5% growth pa
e. Arabica, grown in Brazil (50m bags), is used in premium oulets. At risk from higher temperatures and more resilient pests. 60% of Production
f. Robusta, grown in Vietnam; Used in Instant Coffee; 40% more caffeine
g. What would be the breaking price for coffee ? In 2011, it touched US$300
h. Coffee Rust Disease in Central America lowered supply by 30% over past 3 yrs
i. By 2050, suitable land will halved and demand would have doubled
j. Farmers in Central America replacing coffee with cocoa due to climate change
k. Over 2.25 billion cups of coffee are consumed in the world every day
l. Growth: USA +1.5%; China +5%; India +4%
m. Bumper crops in Brazil, Colombia and Honduras
n. Record Arabica crop in 2016-2017; Pricce +30% in US for 2016
o. Robusta crop down 6% yoy; Price +60% in London for 2016
p. Ily: No deficit in 2017
q. Brazil is the biggest coffee producer, producing 1/3 of world’s coffee
r. Europe is the largest importer, accounting for 1/3 of world’s consumption.
s. Coffee is the most traded commodity in the world, following crude oil.
viewtopic.php?f=33&t=3812&start=80
6. Uranium (U3O8 UXC) - Higher. US$24.50 (Jan 30) from US$23.00 (Jan 23) from US$22.50 (Jan 16). Vested in Cameco (CCJ)
a. Breakeven: US$40 per lb
b. High US$136 (2008); $20 (2005) to $136 (2007), 580% rise in two years
c. Global production: 158m lbs pa; 15% of Supply from decommisioned weapons
d. Stockpile: 1b lbs ( till 2022) ; Companies normally store 5-7 years supply
e. Japanese Demand: 13 lbs pa; Starting 21/54 reactors ?
f. Global Demand: 160m lbs pa to 225m lbs pa (2025)
g. Number of Nuclear plants: +8 pa for next 20 years, from 440 to 595
h. 61 new reactors under construction; 149 new reactors planned
i. China: 35 existing nuclear plants; Currently, building 20; To build 177 more
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more
k. 25% long-term supply contracts expiring in 2017-18; 75% between 2017-2025;
l. Russia withdrew from Nuclear deal in Oct 2016; With Trump, would there be another deal or would there be another arms race ?
m. Paris Climate Deal - implemented in November 2016;
n. China's air pollution worsening so nuclear energy maybe expanding
o. Some buyers are locking in long term contracts at US$40, twice the spot rates
p. Kazakhtan reducing supply by 10% (40% of global production)
q. Risk: Can Natural Gas, Solar, Wind, Wave etc replace Nuclear ?
viewtopic.php?f=33&t=705&start=80
7. Lithium - not vested
a. Global Lithium Demand: 185 ktpa; In 2025: 500 ktpa; Growth: 11% pa
b. Batteries: 40% demand now rising to 70% in 2025; Growth 45% yoy
c. 81% Global Supply: Chile, Australia and Argentina
d. 83% Global Suppy: Turning Around? Albemarle, SQM, FMC and Sichuan Tianqi
e. Cost of lithium-ion battery [b] fell 65% to around $350 per kwh
f. Vehicle: LIT (not vested)
viewtopic.php?f=33&t=1667&start=20
8. Palladium (Mar 17) - Higher; US$750 from US$741 from US$789
a. Support: US$600; US$500; US$200; Resistance: US$800; US$900;
b. Used in Catalytic Converters, Electronics, Dentistry, Medicine, Hydrogen Purification, Chemicals, Groundwater Treatment, Jewelry and Fuel Cells
c. Auto industry consumes 80% of supply
d. Demand by Auto industry doubled in past 10 years
e. Growth Demand: 3% a year for next 4 years
f. Russia and South Africa produced 3/4 of the world's mined palladium supply.
g. Heading toward its 8th annual supply deficit in 2017; 650,000 ounces in 2016
h. Vehicle: PALL (not vested)
viewtopic.php?f=33&t=7070
9. Zinc; Higher - US$2784 from US$2750 from US$2757
a. Supply Deficit 1.2m tons;
b. High US$4400 (2007); Low $1600 (Jan 2016)
c. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer,
d. Producers: Glencore (GLEN.L), Trevali (TV.TO), Nevsun Resources (NEV)
10. If there's a crash, Commodities would not be spared.
11. The High USD is not good for Commodities
12. Global economy is worsening eg. potential trade wars etc
Equities - Risk-On ( Data as of Saturday every week )
1. US Equities - Higher. 2295 from 2271 last week from 2275 two weeks ago. Added to Cameco (CCJ). Bought Lockheed Martin (LMT)
viewtopic.php?f=11&t=7643&start=200
2. HK Equities - Lower. 23129 from 23361 from 22886; No Trade
a. Support 21575; Resistance 24100;
viewtopic.php?f=10&t=7470&start=120
3. Shanghai Equities - Lower. 3140 from 3159 from 3123; Support at 2450; No Trade
viewtopic.php?f=10&t=7190&start=210
4. Spore Equities - No Trade.
5. Japan Equities - Lower. 18918 from 19467 from 19138
6. Malaysian Equities - No Trade. Watching MUI
7. Australian Equities - No Trade. Watching Bellamy's Australia
Currencies- Risk-On
1. USD to JPY - JPY Stronger. 112.58 from 115.08 last week from 114.60 two weeks ago
a. 52 week range is 76 to 126
viewtopic.php?f=32&t=4205&start=180
2. SGD to MYR - SGD Stronger; 3.1463 from 3.0963 from 3.1188
a. Oversold ?
3. AUD to USD - AUD Stronger. 0.7694 from 0.7557 from 0.7567
a. The range is 0.70 (2016) to 1.10 (2011)
b. Am concerned that the spat between the US and China will affect the AUD
viewtopic.php?f=32&t=5256&start=130
4. AUD to SGD - AUD Stronger. 1.0823 from 1.0812 from 1.0780
a. The range is 0.98 (2016) to 1.36 (2012).
b. Am concerned that the spat between the US and China will affect the AUD
5. AUD to MYR - AUD Stronger. 3.4054 from 3.3476 from 3.3621
a. The range is 2.20 (2008) to 3.41 (2017)
b. Waiting to convert some AUD to MYR
6. EUR to USD - EUR Stronger. 1.0786 from 1.0700 from 1.0707
a. Will not be investing in the EUR as I think that it's in a multi-year decline
viewtopic.php?f=32&t=5523&start=100
7. USD to HKD - HKD Weaker. 7.7563 from 7.7549 from 7.7557
a. 52 week range is 7.7452 - 7.8296.
b. Will they remove the peg to the USD during a crisis ?
viewtopic.php?f=32&t=3529&start=40
8. USD to MYR:- MYR Stronger. 4.4260 from 4.4296 from 4.4430
a. 52 Week Range is 3.27 to 4.54.
b. Lowest: 4.60 (1998)
c. Decoupling of the MYR and Oil ?
viewtopic.php?f=32&t=397&start=60
9. USD to SGD:- SGD Stronger; 1.4067 from 1.4306 from 1.4246
a. High 1.70 (2004); Low 1.20 (2011)
b. Expecting the SGD to drop against the USD
viewtopic.php?f=32&t=136&start=100
10. USD to CNY:- CNY Stronger; 6.8649 from 6.8760 from 6.8728
a. Expecting the CNY to continue dropping against the USD
viewtopic.php?f=32&t=7720&start=90
11. GBP to USD:- GBP Weaker. 1.2487 from 1.2547 from 1.2373
a. Will not be investing in the GBP versus the USD, as I think that it's in a multi-year decline
viewtopic.php?f=32&t=333&start=80
12. GBP to MYR:- GBP Weaker. 5.5267 from 5.5584 from 5.4973
a. Which has more effect ? Article 50 or Malaysian Election ?
13. Dollar Index - USD Weaker. 99.87 from 100.53 from 100.74
viewtopic.php?f=32&t=7616&start=60
Others
1. Sentiment - Complacent ?
2. Headwinds - Global Derivatives (US$700t); Global Debts (US$225t, 225% Global GDP); Global Corporate Debt (US$50t); China Debts (US$23t); Chinese Corporate Debts (US$18t); Chinese Local Government Debts (US$3t); China Bad Debts (US$1.5t); US Unfunded Debts (US$170t); US Bank Debts (US$60t); StockMarket Cap/GDP(200%); US Corporate Debt (US$5.5t); Emerging Markets US$ Debts (US$10t); US$ Oil Bad Debts (US$0.2t /US$2.5t); Foreigners Holding of US Treasuries (US$6.3t); US Students Loan (US$1.4t, +20% pa, 40% default); European NPLs (US$1.3t); Italian NPLs (US$0.4t); Junk Bonds Maturing (2017-2021) - US$1.5t; US Feds Leverage (113 to 1);
3. Tailwinds - Low Interest Rates, Cash Sidelines (US$60t); QE Programs US$18t - US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t); Negative Yield Bonds (US$10t); US Foreign Funds Repatriation (US$2.5t); Cash US Corps (US$1.3t); Cash Japanese Corp (US$2t); Buybacks, US Household Net Worth (US$89t); EM Consumption;
4. Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
5. Properties
a. Spore Properties
i) Prices declined by 11% since 2013; Sales dropped by half since 2013
ii) About 24,000 private homes are vacant
iii) Developers sold 8,000 homes in 2016 compared to 7400 in 2015;
iv) Supply: 13,000 in 2017; 9300 in 2018; 7300 in 2019
v) The existing stock of unsold homes may take three years to sell
vi) Americans became the 2nd most frequent buyers of high-end homes
vii) More than 800 condo units were resold at a loss in 2016 as economy slows
viii) Prices fell 3% in 2016 for third straight yearly decline
viewtopic.php?f=10&t=7750&start=40
b. Malaysia Properties
i) Knight Frank: Supply of about 44,000 high end condos in KL as of 1H 2016
ii) NAPIC: About 23% (19000/ 82,000) of residential & commercial properties from 1Q 2016 unsold
iii) Volume and Value of transactions declined 14% and 11%, in the first 9 months
viewtopic.php?f=10&t=4220&start=150
c. China Properties
i) About 4 years supply at Tier 3 & 4 cities
ii) Various new curbs in more than 20 cities
iii) Beijing is + 23.5% yoy
iv) Shanghai is + 31.2% yoy
v) Shenzhen is +36.8% yoy
vi) Guangzhou is +21.1% yoy
viewtopic.php?f=10&t=8150&start=30
d. HK Properies
i) Price has surged almost 370% from 2003 to Sep 2015
ii) 18,000 new units completed in 2016. 94,000 units in next 3-4 years (up 40%)
iii) About 19,000 people left HK last year
iv) Margins have decreased to 25% from 40%
v) DB: Prices to drop 11% in 2017
vi) CS: Prices to drop 22% by end 2018
vii) Bocom: Prices to drop 20% to 30%, by end 2017
viii) Centaline: Mainland Chinese made up 16% of buyers during quarter
ix) DTZ: Prices to increase 5-10% by July 1, 2017
x) Citi: Prices to drop 15% in 2017
xi) 34,000 flats in pipeline for 2017
viewtopic.php?f=10&t=7785&p=202051#p202051
e. London Properties
i) Savills: 9% drop for luxury properties in 2016 and will not rise until 2019
ii) Hard Brexit: 5,000 jobs axed immediately? (1.1m jobs in Financial Services)
iii) London's population @ 8.7m. New households @ 50k pa. Supply 20k pa
iv) CEBR: Property prices in London to fall 6% in 2017
v) Molior: Homes built without buyer secured - 10,829, a 24% rise yoy
vi) Molior: 2 years to sell homes under construction
vii) Rightmove: Decline of 5% by end 2017
viewtopic.php?f=11&t=3673&start=70
6. Yield on 10 Year US Treasuries - Lower. 2.46% from 2.48% from 2.47%
Low 1.32%; High 2.69%.
a. The new regulation on Money Market Funds would probably be decreasing the yield for US Treasuries
7. Interest Rates:-
a. Expecting interest rates to rise slowly over next two years
b. About US$10t or about 1/4 of the world’s bonds now have negative yields
c. US Feds: Three rate hikes in 2017? Four rate hikes in 2018 ?
8. JNK (SPDR Barclays High Yield Bond ETF) - Lower. 36.88 from 37.00 from 36.75
9. Baltic Dry Index - Lower; 752 from 827 from 925; Low 290; High 1257; 2330 (2013)
The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Please use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments
Please Note:-
Support the forum button - If you have benefited from the ideas in the forum but have not participated in the discussions, we would appreciate your kind support to defray the expenses of maintaining the forum.
Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.
viewtopic.php?f=26&t=3168
Active Topics - Do you know that there's an "Active Topics" button? It's located on the top left hand corner of the Index Page:-
InvestIdeas • View active topics
New Money From the New Month
It's a new month again, so new money would be flowing into the markets again.
So was the spike on Friday due to this new money or would the new money be coming next week?
Anyway, there's normally a spike in the early part of a new month and the current good earnings results will certainly help sentiments.
I'm still not convinced that this rally has legs but so far it has been strong. Even a HK Feng Shui master recently mentioned that this rally can last till September. Therefore, I need to remind myself not to aggresively short the market until later in the year.
I'm still cautious but trying not to be pessimistic. I'm nibbling here and there on long term stories, with the view that if there's a crash tomorrow, I would be willing to wait 3 years for things to improve, as the fundamentals are behind me.
Commodities:- Risk-On/b] (Data as of Saturday)
1. Oil - Higher. US$53.85 from US$53.20 last week from US$53.25 two weeks ago. How will the new sanctions on Iran affect Oil ? Vested in RH Petrogas
a. Glut 1m bpd - rebalancing in 2018?; Supply 98.3m bpd?; Demand 97.3m bpd?
b. Global Stockpiles: 2b barrels ?
c. US SPR: 700m barrels; To sell 190m barrels from 2017-2025
d. Iran used to export 4m bpd; Currently, at 3.6m bpd; 40m barrels in storage
e. US Oil Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells
f. US Supply expected to increase by 250,000 bpd
g. China (4th largest producer) - Reserve life fallen from 10 years to 6 years
h. China Supply: Down 7% (300,000 bpd)
i. Saudi Aramco's IPO in 2018. Incentive for Saudis to maintain high oil prices ?
j. China: SPR reached 51/90 days; 2017 Imports to decrease?
k. Russia: ramping drilling activities in existing brownfields
l. OPEC: Cutting Production by 1.2m bpd
m. Libya: 700k bpd from 200k bpd (+0.5m bpd ); Used to produce 1.6m bpd
n. Fracking: Additional 0.5m bpd @ US$60; +1m bpd @ US$70 ?
viewtopic.php?f=33&t=7550&start=210
2. Natural Gas - Lower: US$3.05 from US$3.39 from US$3.20
a. Support 2.85; 1.70; Resistance $4.00
b. Uses: Heating, Cooking, Transportation (CNG), Ammonia (Fertiliser), Hydrogen (Chemical Industry), Fabrics, Glass, Steel, Plastics Paint etc
c. High: US$13.69 (2008); Low: US$1.61 (March 2015)
d. Natural gas rigs: Dropped from 1,606 (2008) to low of 81. Now at 129
e. New injections into storage are at about 40% below the pace of two years ago
f. EIA: Supply now only 2% above the 5 year average vs +40% in March 2016
g. Cold Winter; The heating degree days (HDD) was 11% above average
h. LNG are being exported from US to Latin America and AsiaTrade
i. Trade war with Mexico will bring prices down
j. Suppy increasing by 4% pa; Demand growing by 7% pa
viewtopic.php?f=33&t=1863&start=130
3. Gold - Higher. US$1222 from US$1191 from US$1210. Record US$1920
a. Electronics, Gold Coins, Central Banks, Jewellery etc.
b. 250 oz of paper contract for every oz of physical gold holding on Comex ?
c. Output to fall by 100 metric tons (3%), from 3,150 in 2015 to 3,050 in 2016
d. Demand increasing by Muslim countries now that Gold is a halal investment
e. Would India temporarily ban gold imports ?
f. Indians are supposedly paying 2 times spot due to their cash issues
g. Rising USD and interest rates, would not be good for gold
viewtopic.php?f=33&t=7589&p=202084#p202084
4. Silver - Higher. US$17.52 from US$17.15 from US$17.12. Range High: 49
a. Solar Panels, Data Storage, Antibacterial products, Silver Coins, Jewelery etc
b. Demand: 1.2b ounces in 2015
c. Supply: 0.9b ounces in 2015
d. 35% (7700 metric tons) for Electronics
e. 25% (5500 metric tons) for bullions & coins
f. India imports more Silver than the US
viewtopic.php?f=33&t=7589&p=202084#p202084
5. Coffee (Arabica Mar 17th) - Lower. US$146 from US$152 from US$153
L US$135; US$120; H US$175; US$300 (2011). Not vested
a. 150m Americans drink coffee daily (400m cups)
b. America imports US$4b of coffee yearly
c. Supply: 152m bags; US$19b trade; Deficit 3.5m bags;
d. Demand 155m bags. By 2030, rising to 200m bags; 5% growth pa
e. Arabica, grown in Brazil (50m bags), is used in premium oulets. At risk from higher temperatures and more resilient pests. 60% of Production
f. Robusta, grown in Vietnam; Used in Instant Coffee; 40% more caffeine
g. What would be the breaking price for coffee ? In 2011, it touched US$300
h. Coffee Rust Disease in Central America lowered supply by 30% over past 3 yrs
i. By 2050, suitable land will halved and demand would have doubled
j. Farmers in Central America replacing coffee with cocoa due to climate change
k. Over 2.25 billion cups of coffee are consumed in the world every day
l. Growth: USA +1.5%; China +5%; India +4%
m. Bumper crops in Brazil, Colombia and Honduras
n. Record Arabica crop in 2016-2017; Pricce +30% in US for 2016
o. Robusta crop down 6% yoy; Price +60% in London for 2016
p. Ily: No deficit in 2017
q. Brazil is the biggest coffee producer, producing 1/3 of world’s coffee
r. Europe is the largest importer, accounting for 1/3 of world’s consumption.
s. Coffee is the most traded commodity in the world, following crude oil.
viewtopic.php?f=33&t=3812&start=80
6. Uranium (U3O8 UXC) - Higher. US$24.50 (Jan 30) from US$23.00 (Jan 23) from US$22.50 (Jan 16). Vested in Cameco (CCJ)
a. Breakeven: US$40 per lb
b. High US$136 (2008); $20 (2005) to $136 (2007), 580% rise in two years
c. Global production: 158m lbs pa; 15% of Supply from decommisioned weapons
d. Stockpile: 1b lbs ( till 2022) ; Companies normally store 5-7 years supply
e. Japanese Demand: 13 lbs pa; Starting 21/54 reactors ?
f. Global Demand: 160m lbs pa to 225m lbs pa (2025)
g. Number of Nuclear plants: +8 pa for next 20 years, from 440 to 595
h. 61 new reactors under construction; 149 new reactors planned
i. China: 35 existing nuclear plants; Currently, building 20; To build 177 more
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more
k. 25% long-term supply contracts expiring in 2017-18; 75% between 2017-2025;
l. Russia withdrew from Nuclear deal in Oct 2016; With Trump, would there be another deal or would there be another arms race ?
m. Paris Climate Deal - implemented in November 2016;
n. China's air pollution worsening so nuclear energy maybe expanding
o. Some buyers are locking in long term contracts at US$40, twice the spot rates
p. Kazakhtan reducing supply by 10% (40% of global production)
q. Risk: Can Natural Gas, Solar, Wind, Wave etc replace Nuclear ?
viewtopic.php?f=33&t=705&start=80
7. Lithium - not vested
a. Global Lithium Demand: 185 ktpa; In 2025: 500 ktpa; Growth: 11% pa
b. Batteries: 40% demand now rising to 70% in 2025; Growth 45% yoy
c. 81% Global Supply: Chile, Australia and Argentina
d. 83% Global Suppy: Turning Around? Albemarle, SQM, FMC and Sichuan Tianqi
e. Cost of lithium-ion battery [b] fell 65% to around $350 per kwh
f. Vehicle: LIT (not vested)
viewtopic.php?f=33&t=1667&start=20
8. Palladium (Mar 17) - Higher; US$750 from US$741 from US$789
a. Support: US$600; US$500; US$200; Resistance: US$800; US$900;
b. Used in Catalytic Converters, Electronics, Dentistry, Medicine, Hydrogen Purification, Chemicals, Groundwater Treatment, Jewelry and Fuel Cells
c. Auto industry consumes 80% of supply
d. Demand by Auto industry doubled in past 10 years
e. Growth Demand: 3% a year for next 4 years
f. Russia and South Africa produced 3/4 of the world's mined palladium supply.
g. Heading toward its 8th annual supply deficit in 2017; 650,000 ounces in 2016
h. Vehicle: PALL (not vested)
viewtopic.php?f=33&t=7070
9. Zinc; Higher - US$2784 from US$2750 from US$2757
a. Supply Deficit 1.2m tons;
b. High US$4400 (2007); Low $1600 (Jan 2016)
c. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer,
d. Producers: Glencore (GLEN.L), Trevali (TV.TO), Nevsun Resources (NEV)
10. If there's a crash, Commodities would not be spared.
11. The High USD is not good for Commodities
12. Global economy is worsening eg. potential trade wars etc
Equities - Risk-On ( Data as of Saturday every week )
1. US Equities - Higher. 2295 from 2271 last week from 2275 two weeks ago. Added to Cameco (CCJ). Bought Lockheed Martin (LMT)
viewtopic.php?f=11&t=7643&start=200
2. HK Equities - Lower. 23129 from 23361 from 22886; No Trade
a. Support 21575; Resistance 24100;
viewtopic.php?f=10&t=7470&start=120
3. Shanghai Equities - Lower. 3140 from 3159 from 3123; Support at 2450; No Trade
viewtopic.php?f=10&t=7190&start=210
4. Spore Equities - No Trade.
5. Japan Equities - Lower. 18918 from 19467 from 19138
6. Malaysian Equities - No Trade. Watching MUI
7. Australian Equities - No Trade. Watching Bellamy's Australia
Currencies- Risk-On
1. USD to JPY - JPY Stronger. 112.58 from 115.08 last week from 114.60 two weeks ago
a. 52 week range is 76 to 126
viewtopic.php?f=32&t=4205&start=180
2. SGD to MYR - SGD Stronger; 3.1463 from 3.0963 from 3.1188
a. Oversold ?
3. AUD to USD - AUD Stronger. 0.7694 from 0.7557 from 0.7567
a. The range is 0.70 (2016) to 1.10 (2011)
b. Am concerned that the spat between the US and China will affect the AUD
viewtopic.php?f=32&t=5256&start=130
4. AUD to SGD - AUD Stronger. 1.0823 from 1.0812 from 1.0780
a. The range is 0.98 (2016) to 1.36 (2012).
b. Am concerned that the spat between the US and China will affect the AUD
5. AUD to MYR - AUD Stronger. 3.4054 from 3.3476 from 3.3621
a. The range is 2.20 (2008) to 3.41 (2017)
b. Waiting to convert some AUD to MYR
6. EUR to USD - EUR Stronger. 1.0786 from 1.0700 from 1.0707
a. Will not be investing in the EUR as I think that it's in a multi-year decline
viewtopic.php?f=32&t=5523&start=100
7. USD to HKD - HKD Weaker. 7.7563 from 7.7549 from 7.7557
a. 52 week range is 7.7452 - 7.8296.
b. Will they remove the peg to the USD during a crisis ?
viewtopic.php?f=32&t=3529&start=40
8. USD to MYR:- MYR Stronger. 4.4260 from 4.4296 from 4.4430
a. 52 Week Range is 3.27 to 4.54.
b. Lowest: 4.60 (1998)
c. Decoupling of the MYR and Oil ?
viewtopic.php?f=32&t=397&start=60
9. USD to SGD:- SGD Stronger; 1.4067 from 1.4306 from 1.4246
a. High 1.70 (2004); Low 1.20 (2011)
b. Expecting the SGD to drop against the USD
viewtopic.php?f=32&t=136&start=100
10. USD to CNY:- CNY Stronger; 6.8649 from 6.8760 from 6.8728
a. Expecting the CNY to continue dropping against the USD
viewtopic.php?f=32&t=7720&start=90
11. GBP to USD:- GBP Weaker. 1.2487 from 1.2547 from 1.2373
a. Will not be investing in the GBP versus the USD, as I think that it's in a multi-year decline
viewtopic.php?f=32&t=333&start=80
12. GBP to MYR:- GBP Weaker. 5.5267 from 5.5584 from 5.4973
a. Which has more effect ? Article 50 or Malaysian Election ?
13. Dollar Index - USD Weaker. 99.87 from 100.53 from 100.74
viewtopic.php?f=32&t=7616&start=60
Others
1. Sentiment - Complacent ?
2. Headwinds - Global Derivatives (US$700t); Global Debts (US$225t, 225% Global GDP); Global Corporate Debt (US$50t); China Debts (US$23t); Chinese Corporate Debts (US$18t); Chinese Local Government Debts (US$3t); China Bad Debts (US$1.5t); US Unfunded Debts (US$170t); US Bank Debts (US$60t); StockMarket Cap/GDP(200%); US Corporate Debt (US$5.5t); Emerging Markets US$ Debts (US$10t); US$ Oil Bad Debts (US$0.2t /US$2.5t); Foreigners Holding of US Treasuries (US$6.3t); US Students Loan (US$1.4t, +20% pa, 40% default); European NPLs (US$1.3t); Italian NPLs (US$0.4t); Junk Bonds Maturing (2017-2021) - US$1.5t; US Feds Leverage (113 to 1);
3. Tailwinds - Low Interest Rates, Cash Sidelines (US$60t); QE Programs US$18t - US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t); Negative Yield Bonds (US$10t); US Foreign Funds Repatriation (US$2.5t); Cash US Corps (US$1.3t); Cash Japanese Corp (US$2t); Buybacks, US Household Net Worth (US$89t); EM Consumption;
4. Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
5. Properties
a. Spore Properties
i) Prices declined by 11% since 2013; Sales dropped by half since 2013
ii) About 24,000 private homes are vacant
iii) Developers sold 8,000 homes in 2016 compared to 7400 in 2015;
iv) Supply: 13,000 in 2017; 9300 in 2018; 7300 in 2019
v) The existing stock of unsold homes may take three years to sell
vi) Americans became the 2nd most frequent buyers of high-end homes
vii) More than 800 condo units were resold at a loss in 2016 as economy slows
viii) Prices fell 3% in 2016 for third straight yearly decline
viewtopic.php?f=10&t=7750&start=40
b. Malaysia Properties
i) Knight Frank: Supply of about 44,000 high end condos in KL as of 1H 2016
ii) NAPIC: About 23% (19000/ 82,000) of residential & commercial properties from 1Q 2016 unsold
iii) Volume and Value of transactions declined 14% and 11%, in the first 9 months
viewtopic.php?f=10&t=4220&start=150
c. China Properties
i) About 4 years supply at Tier 3 & 4 cities
ii) Various new curbs in more than 20 cities
iii) Beijing is + 23.5% yoy
iv) Shanghai is + 31.2% yoy
v) Shenzhen is +36.8% yoy
vi) Guangzhou is +21.1% yoy
viewtopic.php?f=10&t=8150&start=30
d. HK Properies
i) Price has surged almost 370% from 2003 to Sep 2015
ii) 18,000 new units completed in 2016. 94,000 units in next 3-4 years (up 40%)
iii) About 19,000 people left HK last year
iv) Margins have decreased to 25% from 40%
v) DB: Prices to drop 11% in 2017
vi) CS: Prices to drop 22% by end 2018
vii) Bocom: Prices to drop 20% to 30%, by end 2017
viii) Centaline: Mainland Chinese made up 16% of buyers during quarter
ix) DTZ: Prices to increase 5-10% by July 1, 2017
x) Citi: Prices to drop 15% in 2017
xi) 34,000 flats in pipeline for 2017
viewtopic.php?f=10&t=7785&p=202051#p202051
e. London Properties
i) Savills: 9% drop for luxury properties in 2016 and will not rise until 2019
ii) Hard Brexit: 5,000 jobs axed immediately? (1.1m jobs in Financial Services)
iii) London's population @ 8.7m. New households @ 50k pa. Supply 20k pa
iv) CEBR: Property prices in London to fall 6% in 2017
v) Molior: Homes built without buyer secured - 10,829, a 24% rise yoy
vi) Molior: 2 years to sell homes under construction
vii) Rightmove: Decline of 5% by end 2017
viewtopic.php?f=11&t=3673&start=70
6. Yield on 10 Year US Treasuries - Lower. 2.46% from 2.48% from 2.47%
Low 1.32%; High 2.69%.
a. The new regulation on Money Market Funds would probably be decreasing the yield for US Treasuries
7. Interest Rates:-
a. Expecting interest rates to rise slowly over next two years
b. About US$10t or about 1/4 of the world’s bonds now have negative yields
c. US Feds: Three rate hikes in 2017? Four rate hikes in 2018 ?
8. JNK (SPDR Barclays High Yield Bond ETF) - Lower. 36.88 from 37.00 from 36.75
9. Baltic Dry Index - Lower; 752 from 827 from 925; Low 290; High 1257; 2330 (2013)
The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Please use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments
Please Note:-
Support the forum button - If you have benefited from the ideas in the forum but have not participated in the discussions, we would appreciate your kind support to defray the expenses of maintaining the forum.
Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.
viewtopic.php?f=26&t=3168
Active Topics - Do you know that there's an "Active Topics" button? It's located on the top left hand corner of the Index Page:-
InvestIdeas • View active topics
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It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston - Billionaire Boss
- Posts: 111129
- Joined: Wed May 07, 2008 9:28 am
Re: Winston's Investment Ideas 04 (Oct 15 - Dec 17)
by winston » Sun Feb 12, 2017 9:03 am
TOL as of Feb 12, 2017
Politics Investing
It's interesting to watch the markets gyrate on the tweets from Trump. And to see him U-Turn on some of these issues eg. "One-China" policy.
And if you trying to invest based on his tweets, you would have found out by now (as I have), that it's not that easy an endeavour.
In times like this, I need to remind myself that it's imperative that we filter out the "Noise" and to focus on the "Facts".
I need to also remind myself to follow my trading rules:-
1. Buy stocks that are Cheap, Hated but on an Uptrend. (Reference: Daily Wealth)
2. Buy stocks with a wide Moat with a great Outlook
3. Buy Growth stocks at PEG of < 0.5
4. Buy Momentum stocks according to CANSLIM
5. Buy Value stocks that are trading at deep discounts (>50%)
6. Have a Trailing Stop Loss
7. Review the story after 3 months
8. Have an Expiry Date on the trade
At the same time, I need to also keep an eye on the following:-
1. Asset Allocation
2. Sector Risk
3. Position Sizing
4. Diversification
5. Currency Risk
Politics is certainly entertaining. However, it's not "reality" as it would take many months or even years, for those political statements to materialise eg Deregulation, Tax Reduction, Infrastructure Spending, Border Walls, Healthcare etc.
And if you are investing based on 140 characters from Trump. you may find the ground under you, shifting very quickly.
Commodities:- Risk-On/b] (Data as of Saturday)
1. Oil - Flat. US$53.85 from US$53.85 last week from US$53.20 two weeks ago. How will the new sanctions on Iran affect Oil ? Vested in RH Petrogas
a. Glut 1m bpd - rebalancing in 2018?; Supply 98.3m bpd?; Demand 97.3m bpd?
b. Global Stockpiles: 2b barrels ?
c. US SPR: 700m barrels; To sell 190m barrels from 2017-2025
d. Iran targetting to export 4m bpd by Mar 2017; Used to have 40m in storage
e. US Oil Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells
f. US Supply expected to increase by 250,000 bpd
g. China (4th largest producer) - Reserve life fallen from 10 years to 6 years
h. China Supply: Down 7% (300,000 bpd)
i. Saudi Aramco's IPO in 2018. Incentive for Saudis to maintain high oil prices ?
j. China: SPR reached 51/90 days; 2017 Imports to decrease?
k. Russia: ramping drilling activities in existing brownfields
l. OPEC: Cutting Production by 1.2m bpd
m. Libya: 700k bpd from 200k bpd (+0.5m bpd ); Used to produce 1.6m bpd
n. Fracking: Additional 0.5m bpd @ US$60; +1m bpd @ US$70 ?
o. Trump's deregulation may increase supply ?
viewtopic.php?f=33&t=7550&start=210
2. Natural Gas - Flat: US$3.04 from US$3.05 from US$3.39
a. Support 2.85; 1.70; Resistance $4.00
b. Uses: Heating, Cooking, Transportation (CNG), Ammonia (Fertiliser), Hydrogen (Chemical Industry), Fabrics, Glass, Steel, Plastics Paint etc
c. High: US$13.69 (2008); Low: US$1.61 (March 2015)
d. Natural gas rigs: Dropped from 1,606 (2008) to low of 81. Now at 129
e. New injections into storage are at about 40% below the pace of two years ago
f. EIA: Supply now only 2% above the 5 year average vs +40% in March 2016
g. Cold Winter; The heating degree days (HDD) was 11% above average
h. LNG are being exported from US to Latin America and AsiaTrade
i. Trade war with Mexico will bring prices down
j. Suppy increasing by 4% pa; Demand growing by 7% pa
k. Trump's deregulation may increase supply ?
viewtopic.php?f=33&t=1863&start=130
3. Gold - Higher. US$1235 from US$1222 from US$1191. Record US$1920
a. Electronics, Gold Coins, Central Banks, Jewellery etc.
b. 250 oz of paper contract for every oz of physical gold holding on Comex ?
c. Output to fall by 100 metric tons (3%), from 3,150 in 2015 to 3,050 in 2016
d. Demand increasing by Muslim countries now that Gold is a halal investment
e. Would India temporarily ban gold imports ?
f. Indians are supposedly paying 2 times spot due to their cash issues
g. Rising USD and interest rates, would not be good for gold
viewtopic.php?f=33&t=7589&p=202084#p202084
4. Silver - Higher. US$17.96 from US$17.52 from US$17.15. Range High: 49
a. Solar Panels, Data Storage, Antibacterial products, Silver Coins, Jewelery etc
b. Demand: 1.2b ounces in 2015
c. Supply: 0.9b ounces in 2015
d. 35% (7700 metric tons) for Electronics
e. 25% (5500 metric tons) for bullions & coins
f. India imports more Silver than the US
viewtopic.php?f=33&t=7589&p=202084#p202084
5. Coffee (Arabica Mar 17th) - Flat. US$146 from US$146 from US$152
L US$135; US$120; H US$175; US$300 (2011). Not vested
a. 150m Americans drink coffee daily (400m cups)
b. America imports US$4b of coffee yearly
c. Supply: 152m bags; US$19b trade; Deficit 3.5m bags;
d. Demand 155m bags. By 2030, rising to 200m bags; 5% growth pa
e. Arabica, grown in Brazil (50m bags), is used in premium oulets. At risk from higher temperatures and more resilient pests. 60% of Production
f. Robusta, grown in Vietnam; Used in Instant Coffee; 40% more caffeine
g. What would be the breaking price for coffee ? In 2011, it touched US$300
h. Coffee Rust Disease in Central America lowered supply by 30% over past 3 yrs
i. By 2050, suitable land will halved and demand would have doubled
j. Farmers in Central America replacing coffee with cocoa due to climate change
k. Over 2.25 billion cups of coffee are consumed in the world every day
l. Growth: USA +1.5%; China +5%; India +4%
m. Bumper crops in Brazil, Colombia and Honduras
n. Record Arabica crop in 2016-2017; Pricce +30% in US for 2016
o. Robusta crop down 6% yoy; Price +60% in London for 2016
p. Ily: No deficit in 2017
q. Brazil is the biggest coffee producer, producing 1/3 of world’s coffee
r. Europe is the largest importer, accounting for 1/3 of world’s consumption.
s. Coffee is the most traded commodity in the world, following crude oil.
viewtopic.php?f=33&t=3812&start=80
6. Uranium (U3O8 UXC) - Higher. US$26.00 (Feb 06) from US$24.50 (Jan 30) from US$23.00 (Jan 23). Vested in Cameco (CCJ)
a. Breakeven: US$40 per lb
b. High US$136 (2008); $20 (2005) to $136 (2007), 580% rise in two years
c. Global production: 158m lbs pa; 15% of Supply from decommisioned weapons
d. Stockpile: 1b lbs ( till 2022) ; Companies normally store 5-7 years supply
e. Japanese Demand: 13 lbs pa; Starting 21/54 reactors ?
f. Global Demand: 160m lbs pa to 225m lbs pa (2025)
g. Number of Nuclear plants: +8 pa for next 20 years, from 440 to 595
h. 61 new reactors under construction; 149 new reactors planned
i. China: 35 existing nuclear plants; Currently, building 20; To build 177 more
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more
k. 25% long-term supply contracts expiring in 2017-18; 75% between 2017-2025;
l. Russia withdrew from Nuclear deal in Oct 2016; With Trump, would there be another deal or would there be another arms race ?
m. Paris Climate Deal - implemented in November 2016;
n. China's air pollution worsening so nuclear energy maybe expanding
o. Some buyers are locking in long term contracts at US$40, twice the spot rates
p. Kazakhtan reducing supply by 10% (40% of global production)
q. Risk: Can Natural Gas, Solar, Wind, Wave etc replace Nuclear ?
r. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons etc;
viewtopic.php?f=33&t=705&start=80
7. Lithium - not vested
a. Global Lithium Demand: 185 ktpa; In 2025: 500 ktpa; Growth: 11% pa
b. Batteries: 40% demand now rising to 70% in 2025; Growth 45% yoy
c. 81% Global Supply: Chile, Australia and Argentina
d. 83% Global Suppy: Turning Around? Albemarle, SQM, FMC and Sichuan Tianqi
e. Cost of lithium-ion battery [b] fell 65% to around $350 per kwh
f. Vehicle: LIT (not vested)
viewtopic.php?f=33&t=1667&start=20
8. Palladium (Mar 17) - Higher; US$784 from US$750 from US$741
a. Support: US$600; US$500; US$200; Resistance: US$800; US$900;
b. Used in Catalytic Converters, Electronics, Dentistry, Medicine, Hydrogen Purification, Chemicals, Groundwater Treatment, Jewelry and Fuel Cells
c. Auto industry consumes 80% of supply
d. Demand by Auto industry doubled in past 10 years
e. Growth Demand: 3% a year for next 4 years
f. Russia and South Africa produced 3/4 of the world's mined palladium supply.
g. Heading toward its 8th annual supply deficit in 2017; 650,000 ounces in 2016
h. Vehicle: PALL (not vested)
viewtopic.php?f=33&t=7070
9. Zinc; Higher - US$2935 from US$2784 from US$2750
a. Supply Deficit 1.2m tons;
b. High US$4400 (2007); Low $1600 (Jan 2016)
c. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer,
d. Producers: Glencore (GLEN.L), Trevali (TV.TO), Nevsun Resources (NEV)
10. Sugar (#11); US$20.68
a. 5m tonnes deficit
b. Droughts in Thailand, Brazil and India
11. If there's a crash, Commodities would not be spared.
12. The High USD is not good for Commodities
13. Global economy is worsening eg. potential trade wars etc
Equities - Risk-On ( Data as of Saturday every week )
1. US Equities - Higher. 2316 from 2308 last week from 2295 two weeks ago. No Trade.
viewtopic.php?f=11&t=7643&start=200
2. HK Equities - Higher. 23575 from 23129 from 23361; No Trade
a. Support 21575; Resistance 24100;
viewtopic.php?f=10&t=7470&start=120
3. Shanghai Equities - Higher. 3197 from 3140 from 3159; Support at 2450; No Trade
viewtopic.php?f=10&t=7190&start=210
4. Spore Equities - No Trade.
5. Japan Equities - Higher. 19379 from 18918 from 19467
6. Malaysian Equities - Bought OSK. Traded MBSB
7. Australian Equities - No Trade.
Currencies- Mixed
1. USD to JPY - JPY Weaker. 113.21 from 112.58 last week from 115.08 two weeks ago
a. 52 week range is 76 to 126
viewtopic.php?f=32&t=4205&start=180
2. SGD to MYR - SGD Weaker; 3.1262 from 3.1463 from 3.0963
a. Oversold ?
3. AUD to USD - AUD Weaker. 0.7686 from 0.7694 from 0.7557
a. The range is 0.70 (2016) to 1.10 (2011)
viewtopic.php?f=32&t=5256&start=130
4. AUD to SGD - AUD Stronger. 1.0921 from 1.0823 from 1.0812
a. The range is 0.98 (2016) to 1.36 (2012).
b. Am concerned that the spat between the US and China will affect the AUD
5. AUD to MYR - AUD Stronger. 3.4140 from 3.4054 from 3.3476
a. The range is 2.20 (2008) to 3.41 (2017)
b. Converted some AUD to MYR
6. EUR to USD - EUR Weaker. 1.0643 from 1.0786 from 1.0700
a. Will not be investing in the EUR as I think that it's in a multi-year decline
viewtopic.php?f=32&t=5523&start=100
7. USD to HKD - HKD Flat. 7.7564 from 7.7563 from 7.7549
a. 52 week range is 7.7452 - 7.8296.
b. Will they remove the peg to the USD during a crisis ?
viewtopic.php?f=32&t=3529&start=40
8. USD to MYR:- MYR Weaker. 4.4420 from 4.4260 from 4.4296
a. 52 Week Range is 3.27 to 4.54.
b. Lowest: 4.885 (1998)
c. Decoupling of the MYR and Oil ?
d. Macquarie: 4.90 (Dec 31, 2017)
e. UOB: 4.35 (July 2017)
viewtopic.php?f=32&t=397&start=60
9. USD to SGD:- SGD Weaker; 1.4209 from 1.4067 from 1.4306
a. High 1.70 (2004); Low 1.20 (2011)
b. Expecting the SGD to drop against the USD
viewtopic.php?f=32&t=136&start=100
10. USD to CNY:- CNY Weaker; 6.8774 from 6.8649 from 6.8760
a. Expecting the CNY to continue dropping against the USD
viewtopic.php?f=32&t=7720&start=90
11. GBP to USD:- GBP Flat. 1.2488 from 1.2487 from 1.2547
a. Will not be investing in the GBP versus the USD, as I think that it's in a multi-year decline
viewtopic.php?f=32&t=333&start=80
12. GBP to MYR:- GBP Stronger. 5.5472 from 5.5267 from 5.5584
a. Which has more effect ? Article 50 or Malaysian Election ?
13. Dollar Index - USD Stronger. 100.80 from 99.87 from 100.53
viewtopic.php?f=32&t=7616&start=60
Others
1. Sentiment - Complacent ?
2. Headwinds - Global Derivatives (US$700t); Global Debts (US$225t, 225% Global GDP); Global Corporate Debt (US$50t); China Debts (US$23t); Chinese Corporate Debts (US$18t); Chinese Local Government Debts (US$3t); China Bad Debts (US$1.5t); US Unfunded Debts (US$170t); US Bank Debts (US$60t); StockMarket Cap/GDP(200%); US Corporate Debt (US$5.5t); US Household Debt (US$12t); Emerging Markets US$ Debts (US$10t); US$ Oil Bad Debts (US$0.2t /US$2.5t); Foreigners Holding of US Treasuries (US$6.3t); US Students Loan (US$1.4t, +20% pa, 40% default); European NPLs (US$1.3t); Italian NPLs (US$0.4t); Junk Bonds Maturing (2017-2021) - US$1.5t; US Feds Leverage (113 to 1);
3. Tailwinds - Low Interest Rates, Cash Sidelines (US$60t); QE Programs US$18t - US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t); Negative Yield Bonds (US$10t); US Foreign Funds Repatriation (US$2.5t); Cash US Corps (US$1.3t); Cash Japanese Corp (US$2t); Buybacks, US Household Net Worth (US$89t); EM Consumption;
4. Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
5. Properties
a. Spore Properties
i) Prices declined by 11% since 2013; Sales dropped by half since 2013
ii) About 24,000 private homes are vacant
iii) Developers sold 8,000 homes in 2016 compared to 7400 in 2015;
iv) Supply: 13,000 in 2017; 9300 in 2018; 7300 in 2019
v) The existing stock of unsold homes may take three years to sell
vi) Americans became the 2nd most frequent buyers of high-end homes
vii) More than 800 condo units were resold at a loss in 2016 as economy slows
viii) Prices fell 3% in 2016 for third straight yearly decline
viewtopic.php?f=10&t=7750&start=40
b. Malaysia Properties
i) Knight Frank: Supply of about 44,000 high end condos in KL as of 1H 2016
ii) NAPIC: About 23% (19000/ 82,000) of residential & commercial properties from 1Q 2016 unsold
iii) Volume and Value of transactions declined 14% and 11%, in the first 9 months
viewtopic.php?f=10&t=4220&start=150
c. China Properties
i) About 4 years supply at Tier 3 & 4 cities
ii) Various new curbs in more than 20 cities
iii) Beijing is + 23.5% yoy
iv) Shanghai is + 31.2% yoy
v) Shenzhen is +36.8% yoy
vi) Guangzhou is +21.1% yoy
viewtopic.php?f=10&t=8150&start=30
d. HK Properies
i) Price has surged almost 370% from 2003 to Sep 2015
ii) 18,000 new units completed in 2016. 94,000 units in next 3-4 years (up 40%)
iii) About 19,000 people left HK last year
iv) Margins have decreased to 25% from 40%
v) DB: Prices to drop 11% in 2017
vi) CS: Prices to drop 22% by end 2018
vii) Bocom: Prices to drop 20% to 30%, by end 2017
viii) Centaline: Mainland Chinese made up 16% of buyers during quarter
ix) DTZ: Prices to increase 5-10% by July 1, 2017
x) Citi: Prices to drop 15% in 2017
xi) 34,000 flats in pipeline for 2017
viewtopic.php?f=10&t=7785&p=202051#p202051
e. London Properties
i) Savills: 9% drop for luxury properties in 2016 and will not rise until 2019
ii) Hard Brexit: 5,000 jobs axed immediately? (1.1m jobs in Financial Services)
iii) London's population @ 8.7m. New households @ 50k pa. Supply 20k pa
iv) CEBR: Property prices in London to fall 6% in 2017
v) Molior: Homes built without buyer secured - 10,829, a 24% rise yoy
vi) Molior: 2 years to sell homes under construction
vii) Rightmove: Decline of 5% by end 2017
viewtopic.php?f=11&t=3673&start=70
6. Yield on 10 Year US Treasuries - Lower. 2.41% from 2.46% from 2.48%
Low 1.32%; High 2.69%.
a. The new regulation on Money Market Funds would probably be decreasing the yield for US Treasuries
7. Interest Rates:-
a. Expecting interest rates to rise slowly over next two years
b. About US$10t or about 1/4 of the world’s bonds now have negative yields
c. US Feds: Three rate hikes in 2017? Four rate hikes in 2018 ?
8. JNK (SPDR Barclays High Yield Bond ETF) - Higher. 36.90 from 36.88 from 37.00
9. Baltic Dry Index - Lower; 702 from 752 from 827; Low 290; High 1257; 2330 (2013)
The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Please use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments
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viewtopic.php?f=26&t=3168
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Politics Investing
It's interesting to watch the markets gyrate on the tweets from Trump. And to see him U-Turn on some of these issues eg. "One-China" policy.
And if you trying to invest based on his tweets, you would have found out by now (as I have), that it's not that easy an endeavour.
In times like this, I need to remind myself that it's imperative that we filter out the "Noise" and to focus on the "Facts".
I need to also remind myself to follow my trading rules:-
1. Buy stocks that are Cheap, Hated but on an Uptrend. (Reference: Daily Wealth)
2. Buy stocks with a wide Moat with a great Outlook
3. Buy Growth stocks at PEG of < 0.5
4. Buy Momentum stocks according to CANSLIM
5. Buy Value stocks that are trading at deep discounts (>50%)
6. Have a Trailing Stop Loss
7. Review the story after 3 months
8. Have an Expiry Date on the trade
At the same time, I need to also keep an eye on the following:-
1. Asset Allocation
2. Sector Risk
3. Position Sizing
4. Diversification
5. Currency Risk
Politics is certainly entertaining. However, it's not "reality" as it would take many months or even years, for those political statements to materialise eg Deregulation, Tax Reduction, Infrastructure Spending, Border Walls, Healthcare etc.
And if you are investing based on 140 characters from Trump. you may find the ground under you, shifting very quickly.
Commodities:- Risk-On/b] (Data as of Saturday)
1. Oil - Flat. US$53.85 from US$53.85 last week from US$53.20 two weeks ago. How will the new sanctions on Iran affect Oil ? Vested in RH Petrogas
a. Glut 1m bpd - rebalancing in 2018?; Supply 98.3m bpd?; Demand 97.3m bpd?
b. Global Stockpiles: 2b barrels ?
c. US SPR: 700m barrels; To sell 190m barrels from 2017-2025
d. Iran targetting to export 4m bpd by Mar 2017; Used to have 40m in storage
e. US Oil Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells
f. US Supply expected to increase by 250,000 bpd
g. China (4th largest producer) - Reserve life fallen from 10 years to 6 years
h. China Supply: Down 7% (300,000 bpd)
i. Saudi Aramco's IPO in 2018. Incentive for Saudis to maintain high oil prices ?
j. China: SPR reached 51/90 days; 2017 Imports to decrease?
k. Russia: ramping drilling activities in existing brownfields
l. OPEC: Cutting Production by 1.2m bpd
m. Libya: 700k bpd from 200k bpd (+0.5m bpd ); Used to produce 1.6m bpd
n. Fracking: Additional 0.5m bpd @ US$60; +1m bpd @ US$70 ?
o. Trump's deregulation may increase supply ?
viewtopic.php?f=33&t=7550&start=210
2. Natural Gas - Flat: US$3.04 from US$3.05 from US$3.39
a. Support 2.85; 1.70; Resistance $4.00
b. Uses: Heating, Cooking, Transportation (CNG), Ammonia (Fertiliser), Hydrogen (Chemical Industry), Fabrics, Glass, Steel, Plastics Paint etc
c. High: US$13.69 (2008); Low: US$1.61 (March 2015)
d. Natural gas rigs: Dropped from 1,606 (2008) to low of 81. Now at 129
e. New injections into storage are at about 40% below the pace of two years ago
f. EIA: Supply now only 2% above the 5 year average vs +40% in March 2016
g. Cold Winter; The heating degree days (HDD) was 11% above average
h. LNG are being exported from US to Latin America and AsiaTrade
i. Trade war with Mexico will bring prices down
j. Suppy increasing by 4% pa; Demand growing by 7% pa
k. Trump's deregulation may increase supply ?
viewtopic.php?f=33&t=1863&start=130
3. Gold - Higher. US$1235 from US$1222 from US$1191. Record US$1920
a. Electronics, Gold Coins, Central Banks, Jewellery etc.
b. 250 oz of paper contract for every oz of physical gold holding on Comex ?
c. Output to fall by 100 metric tons (3%), from 3,150 in 2015 to 3,050 in 2016
d. Demand increasing by Muslim countries now that Gold is a halal investment
e. Would India temporarily ban gold imports ?
f. Indians are supposedly paying 2 times spot due to their cash issues
g. Rising USD and interest rates, would not be good for gold
viewtopic.php?f=33&t=7589&p=202084#p202084
4. Silver - Higher. US$17.96 from US$17.52 from US$17.15. Range High: 49
a. Solar Panels, Data Storage, Antibacterial products, Silver Coins, Jewelery etc
b. Demand: 1.2b ounces in 2015
c. Supply: 0.9b ounces in 2015
d. 35% (7700 metric tons) for Electronics
e. 25% (5500 metric tons) for bullions & coins
f. India imports more Silver than the US
viewtopic.php?f=33&t=7589&p=202084#p202084
5. Coffee (Arabica Mar 17th) - Flat. US$146 from US$146 from US$152
L US$135; US$120; H US$175; US$300 (2011). Not vested
a. 150m Americans drink coffee daily (400m cups)
b. America imports US$4b of coffee yearly
c. Supply: 152m bags; US$19b trade; Deficit 3.5m bags;
d. Demand 155m bags. By 2030, rising to 200m bags; 5% growth pa
e. Arabica, grown in Brazil (50m bags), is used in premium oulets. At risk from higher temperatures and more resilient pests. 60% of Production
f. Robusta, grown in Vietnam; Used in Instant Coffee; 40% more caffeine
g. What would be the breaking price for coffee ? In 2011, it touched US$300
h. Coffee Rust Disease in Central America lowered supply by 30% over past 3 yrs
i. By 2050, suitable land will halved and demand would have doubled
j. Farmers in Central America replacing coffee with cocoa due to climate change
k. Over 2.25 billion cups of coffee are consumed in the world every day
l. Growth: USA +1.5%; China +5%; India +4%
m. Bumper crops in Brazil, Colombia and Honduras
n. Record Arabica crop in 2016-2017; Pricce +30% in US for 2016
o. Robusta crop down 6% yoy; Price +60% in London for 2016
p. Ily: No deficit in 2017
q. Brazil is the biggest coffee producer, producing 1/3 of world’s coffee
r. Europe is the largest importer, accounting for 1/3 of world’s consumption.
s. Coffee is the most traded commodity in the world, following crude oil.
viewtopic.php?f=33&t=3812&start=80
6. Uranium (U3O8 UXC) - Higher. US$26.00 (Feb 06) from US$24.50 (Jan 30) from US$23.00 (Jan 23). Vested in Cameco (CCJ)
a. Breakeven: US$40 per lb
b. High US$136 (2008); $20 (2005) to $136 (2007), 580% rise in two years
c. Global production: 158m lbs pa; 15% of Supply from decommisioned weapons
d. Stockpile: 1b lbs ( till 2022) ; Companies normally store 5-7 years supply
e. Japanese Demand: 13 lbs pa; Starting 21/54 reactors ?
f. Global Demand: 160m lbs pa to 225m lbs pa (2025)
g. Number of Nuclear plants: +8 pa for next 20 years, from 440 to 595
h. 61 new reactors under construction; 149 new reactors planned
i. China: 35 existing nuclear plants; Currently, building 20; To build 177 more
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more
k. 25% long-term supply contracts expiring in 2017-18; 75% between 2017-2025;
l. Russia withdrew from Nuclear deal in Oct 2016; With Trump, would there be another deal or would there be another arms race ?
m. Paris Climate Deal - implemented in November 2016;
n. China's air pollution worsening so nuclear energy maybe expanding
o. Some buyers are locking in long term contracts at US$40, twice the spot rates
p. Kazakhtan reducing supply by 10% (40% of global production)
q. Risk: Can Natural Gas, Solar, Wind, Wave etc replace Nuclear ?
r. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons etc;
viewtopic.php?f=33&t=705&start=80
7. Lithium - not vested
a. Global Lithium Demand: 185 ktpa; In 2025: 500 ktpa; Growth: 11% pa
b. Batteries: 40% demand now rising to 70% in 2025; Growth 45% yoy
c. 81% Global Supply: Chile, Australia and Argentina
d. 83% Global Suppy: Turning Around? Albemarle, SQM, FMC and Sichuan Tianqi
e. Cost of lithium-ion battery [b] fell 65% to around $350 per kwh
f. Vehicle: LIT (not vested)
viewtopic.php?f=33&t=1667&start=20
8. Palladium (Mar 17) - Higher; US$784 from US$750 from US$741
a. Support: US$600; US$500; US$200; Resistance: US$800; US$900;
b. Used in Catalytic Converters, Electronics, Dentistry, Medicine, Hydrogen Purification, Chemicals, Groundwater Treatment, Jewelry and Fuel Cells
c. Auto industry consumes 80% of supply
d. Demand by Auto industry doubled in past 10 years
e. Growth Demand: 3% a year for next 4 years
f. Russia and South Africa produced 3/4 of the world's mined palladium supply.
g. Heading toward its 8th annual supply deficit in 2017; 650,000 ounces in 2016
h. Vehicle: PALL (not vested)
viewtopic.php?f=33&t=7070
9. Zinc; Higher - US$2935 from US$2784 from US$2750
a. Supply Deficit 1.2m tons;
b. High US$4400 (2007); Low $1600 (Jan 2016)
c. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer,
d. Producers: Glencore (GLEN.L), Trevali (TV.TO), Nevsun Resources (NEV)
10. Sugar (#11); US$20.68
a. 5m tonnes deficit
b. Droughts in Thailand, Brazil and India
11. If there's a crash, Commodities would not be spared.
12. The High USD is not good for Commodities
13. Global economy is worsening eg. potential trade wars etc
Equities - Risk-On ( Data as of Saturday every week )
1. US Equities - Higher. 2316 from 2308 last week from 2295 two weeks ago. No Trade.
viewtopic.php?f=11&t=7643&start=200
2. HK Equities - Higher. 23575 from 23129 from 23361; No Trade
a. Support 21575; Resistance 24100;
viewtopic.php?f=10&t=7470&start=120
3. Shanghai Equities - Higher. 3197 from 3140 from 3159; Support at 2450; No Trade
viewtopic.php?f=10&t=7190&start=210
4. Spore Equities - No Trade.
5. Japan Equities - Higher. 19379 from 18918 from 19467
6. Malaysian Equities - Bought OSK. Traded MBSB
7. Australian Equities - No Trade.
Currencies- Mixed
1. USD to JPY - JPY Weaker. 113.21 from 112.58 last week from 115.08 two weeks ago
a. 52 week range is 76 to 126
viewtopic.php?f=32&t=4205&start=180
2. SGD to MYR - SGD Weaker; 3.1262 from 3.1463 from 3.0963
a. Oversold ?
3. AUD to USD - AUD Weaker. 0.7686 from 0.7694 from 0.7557
a. The range is 0.70 (2016) to 1.10 (2011)
viewtopic.php?f=32&t=5256&start=130
4. AUD to SGD - AUD Stronger. 1.0921 from 1.0823 from 1.0812
a. The range is 0.98 (2016) to 1.36 (2012).
b. Am concerned that the spat between the US and China will affect the AUD
5. AUD to MYR - AUD Stronger. 3.4140 from 3.4054 from 3.3476
a. The range is 2.20 (2008) to 3.41 (2017)
b. Converted some AUD to MYR
6. EUR to USD - EUR Weaker. 1.0643 from 1.0786 from 1.0700
a. Will not be investing in the EUR as I think that it's in a multi-year decline
viewtopic.php?f=32&t=5523&start=100
7. USD to HKD - HKD Flat. 7.7564 from 7.7563 from 7.7549
a. 52 week range is 7.7452 - 7.8296.
b. Will they remove the peg to the USD during a crisis ?
viewtopic.php?f=32&t=3529&start=40
8. USD to MYR:- MYR Weaker. 4.4420 from 4.4260 from 4.4296
a. 52 Week Range is 3.27 to 4.54.
b. Lowest: 4.885 (1998)
c. Decoupling of the MYR and Oil ?
d. Macquarie: 4.90 (Dec 31, 2017)
e. UOB: 4.35 (July 2017)
viewtopic.php?f=32&t=397&start=60
9. USD to SGD:- SGD Weaker; 1.4209 from 1.4067 from 1.4306
a. High 1.70 (2004); Low 1.20 (2011)
b. Expecting the SGD to drop against the USD
viewtopic.php?f=32&t=136&start=100
10. USD to CNY:- CNY Weaker; 6.8774 from 6.8649 from 6.8760
a. Expecting the CNY to continue dropping against the USD
viewtopic.php?f=32&t=7720&start=90
11. GBP to USD:- GBP Flat. 1.2488 from 1.2487 from 1.2547
a. Will not be investing in the GBP versus the USD, as I think that it's in a multi-year decline
viewtopic.php?f=32&t=333&start=80
12. GBP to MYR:- GBP Stronger. 5.5472 from 5.5267 from 5.5584
a. Which has more effect ? Article 50 or Malaysian Election ?
13. Dollar Index - USD Stronger. 100.80 from 99.87 from 100.53
viewtopic.php?f=32&t=7616&start=60
Others
1. Sentiment - Complacent ?
2. Headwinds - Global Derivatives (US$700t); Global Debts (US$225t, 225% Global GDP); Global Corporate Debt (US$50t); China Debts (US$23t); Chinese Corporate Debts (US$18t); Chinese Local Government Debts (US$3t); China Bad Debts (US$1.5t); US Unfunded Debts (US$170t); US Bank Debts (US$60t); StockMarket Cap/GDP(200%); US Corporate Debt (US$5.5t); US Household Debt (US$12t); Emerging Markets US$ Debts (US$10t); US$ Oil Bad Debts (US$0.2t /US$2.5t); Foreigners Holding of US Treasuries (US$6.3t); US Students Loan (US$1.4t, +20% pa, 40% default); European NPLs (US$1.3t); Italian NPLs (US$0.4t); Junk Bonds Maturing (2017-2021) - US$1.5t; US Feds Leverage (113 to 1);
3. Tailwinds - Low Interest Rates, Cash Sidelines (US$60t); QE Programs US$18t - US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t); Negative Yield Bonds (US$10t); US Foreign Funds Repatriation (US$2.5t); Cash US Corps (US$1.3t); Cash Japanese Corp (US$2t); Buybacks, US Household Net Worth (US$89t); EM Consumption;
4. Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
5. Properties
a. Spore Properties
i) Prices declined by 11% since 2013; Sales dropped by half since 2013
ii) About 24,000 private homes are vacant
iii) Developers sold 8,000 homes in 2016 compared to 7400 in 2015;
iv) Supply: 13,000 in 2017; 9300 in 2018; 7300 in 2019
v) The existing stock of unsold homes may take three years to sell
vi) Americans became the 2nd most frequent buyers of high-end homes
vii) More than 800 condo units were resold at a loss in 2016 as economy slows
viii) Prices fell 3% in 2016 for third straight yearly decline
viewtopic.php?f=10&t=7750&start=40
b. Malaysia Properties
i) Knight Frank: Supply of about 44,000 high end condos in KL as of 1H 2016
ii) NAPIC: About 23% (19000/ 82,000) of residential & commercial properties from 1Q 2016 unsold
iii) Volume and Value of transactions declined 14% and 11%, in the first 9 months
viewtopic.php?f=10&t=4220&start=150
c. China Properties
i) About 4 years supply at Tier 3 & 4 cities
ii) Various new curbs in more than 20 cities
iii) Beijing is + 23.5% yoy
iv) Shanghai is + 31.2% yoy
v) Shenzhen is +36.8% yoy
vi) Guangzhou is +21.1% yoy
viewtopic.php?f=10&t=8150&start=30
d. HK Properies
i) Price has surged almost 370% from 2003 to Sep 2015
ii) 18,000 new units completed in 2016. 94,000 units in next 3-4 years (up 40%)
iii) About 19,000 people left HK last year
iv) Margins have decreased to 25% from 40%
v) DB: Prices to drop 11% in 2017
vi) CS: Prices to drop 22% by end 2018
vii) Bocom: Prices to drop 20% to 30%, by end 2017
viii) Centaline: Mainland Chinese made up 16% of buyers during quarter
ix) DTZ: Prices to increase 5-10% by July 1, 2017
x) Citi: Prices to drop 15% in 2017
xi) 34,000 flats in pipeline for 2017
viewtopic.php?f=10&t=7785&p=202051#p202051
e. London Properties
i) Savills: 9% drop for luxury properties in 2016 and will not rise until 2019
ii) Hard Brexit: 5,000 jobs axed immediately? (1.1m jobs in Financial Services)
iii) London's population @ 8.7m. New households @ 50k pa. Supply 20k pa
iv) CEBR: Property prices in London to fall 6% in 2017
v) Molior: Homes built without buyer secured - 10,829, a 24% rise yoy
vi) Molior: 2 years to sell homes under construction
vii) Rightmove: Decline of 5% by end 2017
viewtopic.php?f=11&t=3673&start=70
6. Yield on 10 Year US Treasuries - Lower. 2.41% from 2.46% from 2.48%
Low 1.32%; High 2.69%.
a. The new regulation on Money Market Funds would probably be decreasing the yield for US Treasuries
7. Interest Rates:-
a. Expecting interest rates to rise slowly over next two years
b. About US$10t or about 1/4 of the world’s bonds now have negative yields
c. US Feds: Three rate hikes in 2017? Four rate hikes in 2018 ?
8. JNK (SPDR Barclays High Yield Bond ETF) - Higher. 36.90 from 36.88 from 37.00
9. Baltic Dry Index - Lower; 702 from 752 from 827; Low 290; High 1257; 2330 (2013)
The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Please use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments
Please Note:-
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viewtopic.php?f=26&t=3168
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It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston - Billionaire Boss
- Posts: 111129
- Joined: Wed May 07, 2008 9:28 am
Re: Winston's Investment Ideas 04 (Oct 15 - Dec 17)
by winston » Sun Feb 19, 2017 9:15 am
TOL as of Feb 19, 2017
Uncharted Territory
The US markets have been touching record highs.
So can the euphoria continue or would the bubble be pricked soon?
Intuitively, I think that we should be touching Resistance soon. The people who are sitting on some nice profits are waiting to get out. And all they need now is a Excuse.
Could that Excuse be coming from the European Elections or the US Debt Ceiling's Discussions ?
At the same time, there are others who have missed this rally. So whenever there's a dip, these people may be buying.
So this to and fro may go on for a while, until there's a breakout, either on the upside or downside.
Anyway, my Strategy has not changed. I'm still trading the markets whenever I see any opportunity. At the same time, I'm not making any big bets at this late stage in the rally.
Commodities:- Risk-Off[b] (Data as of Saturday)
1. Oil - Lower. US$53.37 from US$53.85 last week from US$53.85 two weeks ago. Vested in RH Petrogas
a. Glut 1m bpd - rebalancing in 2017? Supply 98.03m bpd; Demand 98.09m bpd
b. Global Stockpiles: 2b barrels ? US has 518m barrels
c. US SPR: 700m barrels; To sell 190m barrels from 2017-2025
d. Iran targetting to export 4m bpd by Mar 2017; Used to have 40m in storage
e. US Oil Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells
f. US Supply expected to increase by 250,000 bpd
g. China (4th largest producer) - Reserve life fallen from 10 years to 6 years
h. China Supply: Down 7% (300,000 bpd)
i. Saudi Aramco's IPO in 2018. Incentive for Saudis to maintain high oil prices ?
j. China: SPR reached 51/90 days; 2017 Imports to decrease?
k. Russia: ramping drilling activities in existing brownfields
l. OPEC: Cutting Production by 1.2m bpd
m. Libya: 700k bpd from 200k bpd (+0.5m bpd ); Used to produce 1.6m bpd
n. Fracking: Additional 0.5m bpd @ US$60; +1m bpd @ US$70 ?
o. Trump's deregulation may increase supply ?
p. How will the new sanctions on Iran affect Oil?
viewtopic.php?f=33&t=7550&start=210
2. Natural Gas - Lower: US$2.84 from US$3.04 from US$3.05. Not vested
a. Support 2.85; 1.70; Resistance $4.00
b. Uses: Heating, Cooking, Transportation (CNG), Ammonia (Fertiliser), Hydrogen (Chemical Industry), Fabrics, Glass, Steel, Plastics Paint etc
c. High: US$13.69 (2008); Low: US$1.61 (March 2015)
d. Natural gas rigs: Dropped from 1,606 (2008) to low of 81. Now at 129
e. LNG are being exported from US to Latin America and AsiaTrade
f. Trade war with Mexico will bring prices down
g. Suppy increasing by 4% pa; Demand growing by 7% pa
h. Trump's deregulation may increase supply ?
i. Storage levels, which typically fall during winter months, have declined only modestly. That could result in another bout of oversupply as winter comes to an end.
viewtopic.php?f=33&t=1863&start=130
3. Gold - Flat. US$1236 from US$1235 from US$1222. Record US$1920. Vested - Physical Gold Coins
a. Electronics, Gold Coins, Central Banks, Jewellery etc.
b. 250 oz of paper contract for every oz of physical gold holding on Comex ?
c. Output fell by 100 metric tons (3%), from 3,150 in 2015 to 3,050 in 2016
d. Demand increasing in Muslim countries as Gold is now a halal investment
e. Indians are supposedly paying 2 times spot due to their cash issues
f. Rising USD and interest rates, would not be good for gold
viewtopic.php?f=33&t=7589&p=202084#p202084
4. Silver - Flat. US$17.98 from US$17.96 from US$17.52. Range High: 49
a. Solar Panels, Data Storage, Antibacterial products, Silver Coins, Jewelery etc
b. Demand: 1.2b ounces in 2015
c. Supply: 0.9b ounces in 2015
d. 35% (7700 metric tons) for Electronics
e. 25% (5500 metric tons) for bullions & coins
f. India imports more Silver than the US
viewtopic.php?f=33&t=7589&p=202084#p202084
5. Coffee (Arabica Mar 17th) - Higher. US$149 from US$146 from US$146
L US$135; US$120; H US$175; US$300 (2011). Not vested
a. 150m Americans drink coffee daily (400m cups)
b. USA imports US$4b of coffee yearly
c. Supply: 152m bags; US$19b trade; Deficit 3.5m bags;
d. Demand 155m bags. By 2030, rising to 200m bags; 5% growth pa
e. Arabica, grown in Brazil (50m bags), is used in premium oulets. At risk from higher temperatures and more resilient pests. 60% of Production
f. Robusta, grown in Vietnam; Used in Instant Coffee; 40% more caffeine
g. What would be the breaking price for coffee ? In 2011, it touched US$300
h. Coffee Rust Disease in Central America lowered supply by 30% over past 3 yrs
i. By 2050, suitable land will halved and demand would have doubled
j. Farmers in Central America replacing coffee with cocoa due to climate change
k. Over 2.25 billion cups of coffee are consumed in the world every day
l. Growth: USA +1.5%; China +5%; India +4%
m. Bumper crops in Brazil, Colombia and Honduras
n. Record Arabica crop in 2016-2017; Price +30% in US for 2016
o. Robusta crop down 6% yoy; Price +60% in London for 2016
p. Illy: Rebalancing in 2017
q. Brazil is the biggest coffee producer, producing 1/3 of world’s coffee
r. Europe is the largest importer, accounting for 1/3 of world’s consumption.
s. Coffee is the most traded commodity in the world, following crude oil.
viewtopic.php?f=33&t=3812&start=80
6. Uranium (U3O8 UXC) - Higher. US$26.50 (Feb 13) from US$26.00 (Feb 06) from US$24.50 (Jan 30). Vested in Cameco (CCJ)
a. Breakeven: US$40 per lb
b. High US$136 (2008); $20 (2005) to $136 (2007), 580% rise in two years
c. Global production: 158m lbs pa; 15% of Supply from decommisioned weapons
d. Stockpile: 1b lbs ( till 2022) ; Companies normally store 5-7 years supply
e. Japanese Demand: 13 lbs pa; Starting 21/54 reactors ?
f. Global Demand: 160m lbs pa to 225m lbs pa (2025)
g. Number of Nuclear plants: +8 pa for next 20 years, from 440 to 595
h. 61 new reactors under construction; 149 new reactors planned
i. China: 35 existing nuclear plants; Currently, building 20; To build 177 more
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more
k. 25% long-term supply contracts expiring in 2017-18; 75% between 2017-2025;
l. Russia withdrew from Nuclear deal in Oct 2016; With Trump, would there be another deal or would there be another arms race ?
m. Paris Climate Deal - implemented in November 2016;
n. China's air pollution worsening so nuclear energy maybe expanding
o. Some buyers are locking in long term contracts at US$40, twice the spot rates
p. Kazakhtan reducing supply by 10% (40% of global production)
q. Risk: Can Natural Gas, Solar, Wind, Wave etc replace Nuclear ?
r. Nuclear power accounts for about 20% of the electricity generated in the U.S
s. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons etc;
viewtopic.php?f=33&t=705&start=80
7. Lithium - not vested
a. Global Lithium Demand: 185 ktpa; In 2025: 500 ktpa; Growth: 11% pa
b. Batteries: 40% demand now rising to 70% in 2025; Growth 45% yoy
c. 81% Global Supply: Chile, Australia and Argentina
d. 83% Global Suppy: Turning Around? Albemarle, SQM, FMC and Sichuan Tianqi
e. Cost of lithium-ion battery [b] fell 65% to around $350 per kwh
f. Vehicle: LIT (not vested)
viewtopic.php?f=33&t=1667&start=20
8. Palladium (Mar 17) - Lower; US$777 from US$784 from US$750
a. Support: US$600; US$500; US$200; Resistance: US$800; US$900;
b. Used in Catalytic Converters, Electronics, Dentistry, Medicine, Hydrogen Purification, Chemicals, Groundwater Treatment, Jewelry and Fuel Cells
c. Auto industry consumes 80% of supply
d. Demand by Auto industry doubled in past 10 years
e. Growth Demand: 3% a year for next 4 years
f. Russia and South Africa produced 3/4 of the world's mined palladium supply.
g. Heading toward its 8th annual supply deficit in 2017; 650,000 ounces in 2016
h. Vehicle: PALL (not vested)
viewtopic.php?f=33&t=7070
9. Zinc; Lower - US$2809 from US$2935 from US$2784
a. Supply Deficit 1.2m tons;
b. High US$4400 (2007); Low $1600 (Jan 2016)
c. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer,
d. Producers: Glencore (GLEN.L), Trevali (TV.TO), Nevsun Resources (NEV)
10. Sugar (#11); Lower - US$20.63 from US$20.68
a. 5m tonnes deficit
b. Droughts in Thailand, Brazil and India
11. Nickel; US$11065
a. Used in Construction, Cars, Cookware, Jets, Appliances, Lithium Ion Batteries etc
b. Phillippines: 1/4 of Global Supply; 30 mines closed (1/2 PI Output)
c. Indonesia: Allowed exports but requires 51% ownership by locals
d. Chinese Stainless Steel: +12% yoy
e. Global Demand: +6% pa
f. Battery Demand for Nickel: +20% in 2016
g. Demand for Lithium Ion Batteries: +14% pa
h. Deficit: Rising from 67k tonnes in 2016 to 93k tonnes in 2017
i. Vehicle: JJN (iPath Bloomberg Nickel)
viewtopic.php?f=33&t=969
11. If there's a crash, Commodities would not be spared.
12. The High USD is not good for Commodities
13. Global economy is worsening eg. potential trade wars etc
Equities - Risk-On ( Data as of Saturday every week )
1. US Equities - Higher. 2351 from 2316 last week from 2308 two weeks ago. Sold 2/3 Cameco CCJ
viewtopic.php?f=11&t=7643&start=200
2. HK Equities - Higher. 24034 from 23575 from 23129; No Trade
a. Support 21575; Resistance 24100;
viewtopic.php?f=10&t=7470&start=120
3. Shanghai Equities - Flat. 3202 from 3197 from 3140; Support at 2450; No Trade
viewtopic.php?f=10&t=7190&start=210
4. Spore Equities - No Trade.
5. Japan Equities - Higher. 19235 from 19379 from 18918
6. Malaysian Equities - Added to OSK
7. Australian Equities - No Trade.
Medical Marijuana Industry
a. Trump's new AG, Jefferson Beauregard Sessions III hates marijuana
b. Trump's Health and Human Services secretary, Tom Price, also hates marijuana
c. The American marijuana industry employs 100,000 to 150,000 people
d. In comparison, the American coal industry employs only 85,000 Americans
e. Last year, legal marijuana spending was $6.9b. By 2021, it should reach $21.6b
f. Both legal and illegal sales in USA is $53b last year. Illegal sales took 85% of sales
Currencies- Mixed
1. USD to JPY - JPY Stronger. 112.84 from 113.21 last week from 112.58 two weeks ago
a. 52 week range is 76 to 126
viewtopic.php?f=32&t=4205&start=180
2. SGD to MYR - SGD Stronger; 3.1401 from 3.1262 from 3.1463
3. AUD to USD - AUD Weaker. 0.7679 from 0.7686 from 0.7694
a. The range is 0.70 (2016) to 1.10 (2011)
viewtopic.php?f=32&t=5256&start=130
4. AUD to SGD - AUD Weaker. 1.0884 from 1.0921 from 1.0823
a. The range is 0.98 (2016) to 1.36 (2012).
b. Am concerned that the spat between the US and China will affect the AUD
5. AUD to MYR - AUD Stronger. 3.4178 from 3.4140 from 3.4054
a. The range is 2.20 (2008) to 3.41 (2017)
b. Waiting to convert AUD to MYR
6. EUR to USD - EUR Weaker. 1.0619 from 1.0643 from 1.0786
a. Will not be investing in the EUR as I think that it's in a multi-year decline
viewtopic.php?f=32&t=5523&start=100
7. USD to HKD - HKD Weaker. 7.7600 from 7.7564 from 7.7563
a. 52 week range is 7.7452 - 7.8296.
b. Will they remove the peg to the USD during a crisis ?
viewtopic.php?f=32&t=3529&start=40
8. USD to MYR:- MYR Weaker. 4.4510 from 4.4420 from 4.4260
a. 52 Week Range is 3.27 to 4.54.
b. Lowest: 4.885 (1998)
c. Decoupling of the MYR and Oil ?
d. Macquarie: 4.90 (Dec 31, 2017)
e. UOB: 4.35 (July 2017)
viewtopic.php?f=32&t=397&start=60
9. USD to SGD:- SGD Stronger; 1.4174 from 1.4209 from 1.4067
a. High 1.70 (2004); Low 1.20 (2011)
b. Expecting the SGD to drop against the USD
viewtopic.php?f=32&t=136&start=100
10. USD to CNY:- CNY Stronger; 6.8639 from 6.8774 from 6.8649
a. Expecting the CNY to continue dropping against the USD
viewtopic.php?f=32&t=7720&start=90
11. GBP to USD:- GBP Weaker. 1.2407 from 1.2488 from 1.2487
a. Will not be investing in the GBP versus the USD, as I think that it's in a multi-year decline
viewtopic.php?f=32&t=333&start=80
12. GBP to MYR:- GBP Weaker. 5.5230 from 5.5472 from 5.5267
a. Which has more effect ? Article 50 or Malaysian Election ?
13. Dollar Index - USD Stronger. 100.95 from 100.80 from 99.87
viewtopic.php?f=32&t=7616&start=60
Others
1. Sentiment - Complacent ?
2. Headwinds - Global Derivatives (US$700t); Global Debts (US$225t, 225% Global GDP); Global Corporate Debt (US$50t); China Debts (US$23t); Chinese Corporate Debts (US$18t); Chinese Local Government Debts (US$3t); China Bad Debts (US$1.5t); US Unfunded Debts (US$170t); US Bank Debts (US$60t); StockMarket Cap/GDP(200%); US Corporate Debt (US$5.5t); US Household Debt (US$12t); Emerging Markets US$ Debts (US$10t); US$ Oil Bad Debts (US$0.2t /US$2.5t); Foreigners Holding of US Treasuries (US$6.3t); US Students Loan (US$1.4t, +20% pa, 40% default); European NPLs (US$1.3t); Italian NPLs (US$0.4t); Junk Bonds Maturing (2017-2021) - US$1.5t; US Feds Leverage (113 to 1);
3. Tailwinds - Low Interest Rates, Cash Sidelines (US$60t); QE Programs US$18t - US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t); Negative Yield Bonds (US$10t); US Foreign Funds Repatriation (US$2.5t); Cash US Corps (US$1.3t); Cash Japanese Corp (US$2t); Buybacks, US Household Net Worth (US$89t); EM Consumption;
4. Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
5. Properties
a. Spore Properties
i) Prices declined by 11% since 2013; Sales dropped by half since 2013
ii) About 24,000 private homes are vacant
iii) Developers sold 8,000 homes in 2016 compared to 7400 in 2015;
iv) Supply: 13,000 in 2017; 9300 in 2018; 7300 in 2019
v) The existing stock of unsold homes may take three years to sell
vi) Americans became the 2nd most frequent buyers of high-end homes
vii) More than 800 condo units were resold at a loss in 2016 as economy slows
viii) Prices fell 3% in 2016 for third straight yearly decline
ix) When would they be relaxing the housing curbs ?
viewtopic.php?f=10&t=7750&start=40
b. Malaysia Properties
i) Knight Frank: Supply of about 44,000 high end condos in KL as of 1H 2016
ii) NAPIC: About 23% of residential & commercial properties from 1Q 2016 unsold
iii) Volume and Value of transactions declined 14% and 11%, in the first 9 mths of 2016
viewtopic.php?f=10&t=4220&start=150
c. China Properties
i) About 4 years supply at Tier 3 & 4 cities
ii) Various new curbs in more than 20 cities
iii) Beijing is + 23.5% yoy
iv) Shanghai is + 31.2% yoy
v) Shenzhen is +36.8% yoy
vi) Guangzhou is +21.1% yoy
viewtopic.php?f=10&t=8150&start=30
d. HK Properies
i) Price has surged almost 370% from 2003 to Sep 2015
ii) 18,000 new units completed in 2016. 94,000 units in next 3-4 years (up 40%)
iii) About 19,000 people left HK last year
iv) Margins have decreased to 25% from 40%
v) DB: Prices to drop 11% in 2017
vi) CS: Prices to drop 22% by end 2018
vii) Bocom: Prices to drop 20% to 30%, by end 2017
viii) Centaline: Mainland Chinese made up 16% of buyers during quarter
ix) DTZ: Prices to increase 5-10% by July 1, 2017
x) Citi: Prices to drop 15% in 2017
xi) 34,000 flats in pipeline for 2017
xii) Cushman & Wakefield: Prices to rise 5-10% in 1H 2017
xiii) Annual Supply of 20,000 from 8000
viewtopic.php?f=10&t=7785&p=202051#p202051
e. London Properties
i) Savills: 9% drop for luxury properties in 2016 and will not rise until 2019
ii) Hard Brexit: 5,000 jobs axed immediately? (1.1m jobs in Financial Services)
iii) London's population @ 8.7m. New households @ 50k pa. Supply 20k pa
iv) CEBR: Property prices in London to fall 6% in 2017
v) Molior: Homes built without buyer secured - 10,829, a 24% rise yoy
vi) Molior: 2 years to sell homes under construction
vii) Rightmove: Decline of 5% by end 2017
viewtopic.php?f=11&t=3673&start=70
6. Yield on 10 Year US Treasuries - Flat. 2.41% from 2.41% from 2.46%
Low 1.32%; High 2.69%.
a. New regulation on Money Markets would be decreasing yield for US Treasuries
7. Interest Rates:-
a. Expecting interest rates to rise slowly over next two years
b. About US$10t or about 1/4 of the world’s bonds now have negative yields
c. US Feds: Three rate hikes in 2017? Four rate hikes in 2018 ?
8. JNK (SPDR Barclays High Yield Bond ETF) - Higher. 36.96 from 36.90 from 36.88
9. Baltic Dry Index - Higher; 741 from 702 from 752; Low 290; High 1257; 2330 (2013)
The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Please use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments
Please Note:-
Support the forum button - If you have benefited from the ideas in the forum but have not participated in the discussions, we would appreciate your kind support to defray the expenses of maintaining the forum.
Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.
viewtopic.php?f=26&t=3168
Active Topics - Do you know that there's an "Active Topics" button? It's located on the top left hand corner of the Index Page:-
search.php?search_id=active_topics
Uncharted Territory
The US markets have been touching record highs.
So can the euphoria continue or would the bubble be pricked soon?
Intuitively, I think that we should be touching Resistance soon. The people who are sitting on some nice profits are waiting to get out. And all they need now is a Excuse.
Could that Excuse be coming from the European Elections or the US Debt Ceiling's Discussions ?
At the same time, there are others who have missed this rally. So whenever there's a dip, these people may be buying.
So this to and fro may go on for a while, until there's a breakout, either on the upside or downside.
Anyway, my Strategy has not changed. I'm still trading the markets whenever I see any opportunity. At the same time, I'm not making any big bets at this late stage in the rally.
Commodities:- Risk-Off[b] (Data as of Saturday)
1. Oil - Lower. US$53.37 from US$53.85 last week from US$53.85 two weeks ago. Vested in RH Petrogas
a. Glut 1m bpd - rebalancing in 2017? Supply 98.03m bpd; Demand 98.09m bpd
b. Global Stockpiles: 2b barrels ? US has 518m barrels
c. US SPR: 700m barrels; To sell 190m barrels from 2017-2025
d. Iran targetting to export 4m bpd by Mar 2017; Used to have 40m in storage
e. US Oil Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells
f. US Supply expected to increase by 250,000 bpd
g. China (4th largest producer) - Reserve life fallen from 10 years to 6 years
h. China Supply: Down 7% (300,000 bpd)
i. Saudi Aramco's IPO in 2018. Incentive for Saudis to maintain high oil prices ?
j. China: SPR reached 51/90 days; 2017 Imports to decrease?
k. Russia: ramping drilling activities in existing brownfields
l. OPEC: Cutting Production by 1.2m bpd
m. Libya: 700k bpd from 200k bpd (+0.5m bpd ); Used to produce 1.6m bpd
n. Fracking: Additional 0.5m bpd @ US$60; +1m bpd @ US$70 ?
o. Trump's deregulation may increase supply ?
p. How will the new sanctions on Iran affect Oil?
viewtopic.php?f=33&t=7550&start=210
2. Natural Gas - Lower: US$2.84 from US$3.04 from US$3.05. Not vested
a. Support 2.85; 1.70; Resistance $4.00
b. Uses: Heating, Cooking, Transportation (CNG), Ammonia (Fertiliser), Hydrogen (Chemical Industry), Fabrics, Glass, Steel, Plastics Paint etc
c. High: US$13.69 (2008); Low: US$1.61 (March 2015)
d. Natural gas rigs: Dropped from 1,606 (2008) to low of 81. Now at 129
e. LNG are being exported from US to Latin America and AsiaTrade
f. Trade war with Mexico will bring prices down
g. Suppy increasing by 4% pa; Demand growing by 7% pa
h. Trump's deregulation may increase supply ?
i. Storage levels, which typically fall during winter months, have declined only modestly. That could result in another bout of oversupply as winter comes to an end.
viewtopic.php?f=33&t=1863&start=130
3. Gold - Flat. US$1236 from US$1235 from US$1222. Record US$1920. Vested - Physical Gold Coins
a. Electronics, Gold Coins, Central Banks, Jewellery etc.
b. 250 oz of paper contract for every oz of physical gold holding on Comex ?
c. Output fell by 100 metric tons (3%), from 3,150 in 2015 to 3,050 in 2016
d. Demand increasing in Muslim countries as Gold is now a halal investment
e. Indians are supposedly paying 2 times spot due to their cash issues
f. Rising USD and interest rates, would not be good for gold
viewtopic.php?f=33&t=7589&p=202084#p202084
4. Silver - Flat. US$17.98 from US$17.96 from US$17.52. Range High: 49
a. Solar Panels, Data Storage, Antibacterial products, Silver Coins, Jewelery etc
b. Demand: 1.2b ounces in 2015
c. Supply: 0.9b ounces in 2015
d. 35% (7700 metric tons) for Electronics
e. 25% (5500 metric tons) for bullions & coins
f. India imports more Silver than the US
viewtopic.php?f=33&t=7589&p=202084#p202084
5. Coffee (Arabica Mar 17th) - Higher. US$149 from US$146 from US$146
L US$135; US$120; H US$175; US$300 (2011). Not vested
a. 150m Americans drink coffee daily (400m cups)
b. USA imports US$4b of coffee yearly
c. Supply: 152m bags; US$19b trade; Deficit 3.5m bags;
d. Demand 155m bags. By 2030, rising to 200m bags; 5% growth pa
e. Arabica, grown in Brazil (50m bags), is used in premium oulets. At risk from higher temperatures and more resilient pests. 60% of Production
f. Robusta, grown in Vietnam; Used in Instant Coffee; 40% more caffeine
g. What would be the breaking price for coffee ? In 2011, it touched US$300
h. Coffee Rust Disease in Central America lowered supply by 30% over past 3 yrs
i. By 2050, suitable land will halved and demand would have doubled
j. Farmers in Central America replacing coffee with cocoa due to climate change
k. Over 2.25 billion cups of coffee are consumed in the world every day
l. Growth: USA +1.5%; China +5%; India +4%
m. Bumper crops in Brazil, Colombia and Honduras
n. Record Arabica crop in 2016-2017; Price +30% in US for 2016
o. Robusta crop down 6% yoy; Price +60% in London for 2016
p. Illy: Rebalancing in 2017
q. Brazil is the biggest coffee producer, producing 1/3 of world’s coffee
r. Europe is the largest importer, accounting for 1/3 of world’s consumption.
s. Coffee is the most traded commodity in the world, following crude oil.
viewtopic.php?f=33&t=3812&start=80
6. Uranium (U3O8 UXC) - Higher. US$26.50 (Feb 13) from US$26.00 (Feb 06) from US$24.50 (Jan 30). Vested in Cameco (CCJ)
a. Breakeven: US$40 per lb
b. High US$136 (2008); $20 (2005) to $136 (2007), 580% rise in two years
c. Global production: 158m lbs pa; 15% of Supply from decommisioned weapons
d. Stockpile: 1b lbs ( till 2022) ; Companies normally store 5-7 years supply
e. Japanese Demand: 13 lbs pa; Starting 21/54 reactors ?
f. Global Demand: 160m lbs pa to 225m lbs pa (2025)
g. Number of Nuclear plants: +8 pa for next 20 years, from 440 to 595
h. 61 new reactors under construction; 149 new reactors planned
i. China: 35 existing nuclear plants; Currently, building 20; To build 177 more
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more
k. 25% long-term supply contracts expiring in 2017-18; 75% between 2017-2025;
l. Russia withdrew from Nuclear deal in Oct 2016; With Trump, would there be another deal or would there be another arms race ?
m. Paris Climate Deal - implemented in November 2016;
n. China's air pollution worsening so nuclear energy maybe expanding
o. Some buyers are locking in long term contracts at US$40, twice the spot rates
p. Kazakhtan reducing supply by 10% (40% of global production)
q. Risk: Can Natural Gas, Solar, Wind, Wave etc replace Nuclear ?
r. Nuclear power accounts for about 20% of the electricity generated in the U.S
s. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons etc;
viewtopic.php?f=33&t=705&start=80
7. Lithium - not vested
a. Global Lithium Demand: 185 ktpa; In 2025: 500 ktpa; Growth: 11% pa
b. Batteries: 40% demand now rising to 70% in 2025; Growth 45% yoy
c. 81% Global Supply: Chile, Australia and Argentina
d. 83% Global Suppy: Turning Around? Albemarle, SQM, FMC and Sichuan Tianqi
e. Cost of lithium-ion battery [b] fell 65% to around $350 per kwh
f. Vehicle: LIT (not vested)
viewtopic.php?f=33&t=1667&start=20
8. Palladium (Mar 17) - Lower; US$777 from US$784 from US$750
a. Support: US$600; US$500; US$200; Resistance: US$800; US$900;
b. Used in Catalytic Converters, Electronics, Dentistry, Medicine, Hydrogen Purification, Chemicals, Groundwater Treatment, Jewelry and Fuel Cells
c. Auto industry consumes 80% of supply
d. Demand by Auto industry doubled in past 10 years
e. Growth Demand: 3% a year for next 4 years
f. Russia and South Africa produced 3/4 of the world's mined palladium supply.
g. Heading toward its 8th annual supply deficit in 2017; 650,000 ounces in 2016
h. Vehicle: PALL (not vested)
viewtopic.php?f=33&t=7070
9. Zinc; Lower - US$2809 from US$2935 from US$2784
a. Supply Deficit 1.2m tons;
b. High US$4400 (2007); Low $1600 (Jan 2016)
c. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer,
d. Producers: Glencore (GLEN.L), Trevali (TV.TO), Nevsun Resources (NEV)
10. Sugar (#11); Lower - US$20.63 from US$20.68
a. 5m tonnes deficit
b. Droughts in Thailand, Brazil and India
11. Nickel; US$11065
a. Used in Construction, Cars, Cookware, Jets, Appliances, Lithium Ion Batteries etc
b. Phillippines: 1/4 of Global Supply; 30 mines closed (1/2 PI Output)
c. Indonesia: Allowed exports but requires 51% ownership by locals
d. Chinese Stainless Steel: +12% yoy
e. Global Demand: +6% pa
f. Battery Demand for Nickel: +20% in 2016
g. Demand for Lithium Ion Batteries: +14% pa
h. Deficit: Rising from 67k tonnes in 2016 to 93k tonnes in 2017
i. Vehicle: JJN (iPath Bloomberg Nickel)
viewtopic.php?f=33&t=969
11. If there's a crash, Commodities would not be spared.
12. The High USD is not good for Commodities
13. Global economy is worsening eg. potential trade wars etc
Equities - Risk-On ( Data as of Saturday every week )
1. US Equities - Higher. 2351 from 2316 last week from 2308 two weeks ago. Sold 2/3 Cameco CCJ
viewtopic.php?f=11&t=7643&start=200
2. HK Equities - Higher. 24034 from 23575 from 23129; No Trade
a. Support 21575; Resistance 24100;
viewtopic.php?f=10&t=7470&start=120
3. Shanghai Equities - Flat. 3202 from 3197 from 3140; Support at 2450; No Trade
viewtopic.php?f=10&t=7190&start=210
4. Spore Equities - No Trade.
5. Japan Equities - Higher. 19235 from 19379 from 18918
6. Malaysian Equities - Added to OSK
7. Australian Equities - No Trade.
Medical Marijuana Industry
a. Trump's new AG, Jefferson Beauregard Sessions III hates marijuana
b. Trump's Health and Human Services secretary, Tom Price, also hates marijuana
c. The American marijuana industry employs 100,000 to 150,000 people
d. In comparison, the American coal industry employs only 85,000 Americans
e. Last year, legal marijuana spending was $6.9b. By 2021, it should reach $21.6b
f. Both legal and illegal sales in USA is $53b last year. Illegal sales took 85% of sales
Currencies- Mixed
1. USD to JPY - JPY Stronger. 112.84 from 113.21 last week from 112.58 two weeks ago
a. 52 week range is 76 to 126
viewtopic.php?f=32&t=4205&start=180
2. SGD to MYR - SGD Stronger; 3.1401 from 3.1262 from 3.1463
3. AUD to USD - AUD Weaker. 0.7679 from 0.7686 from 0.7694
a. The range is 0.70 (2016) to 1.10 (2011)
viewtopic.php?f=32&t=5256&start=130
4. AUD to SGD - AUD Weaker. 1.0884 from 1.0921 from 1.0823
a. The range is 0.98 (2016) to 1.36 (2012).
b. Am concerned that the spat between the US and China will affect the AUD
5. AUD to MYR - AUD Stronger. 3.4178 from 3.4140 from 3.4054
a. The range is 2.20 (2008) to 3.41 (2017)
b. Waiting to convert AUD to MYR
6. EUR to USD - EUR Weaker. 1.0619 from 1.0643 from 1.0786
a. Will not be investing in the EUR as I think that it's in a multi-year decline
viewtopic.php?f=32&t=5523&start=100
7. USD to HKD - HKD Weaker. 7.7600 from 7.7564 from 7.7563
a. 52 week range is 7.7452 - 7.8296.
b. Will they remove the peg to the USD during a crisis ?
viewtopic.php?f=32&t=3529&start=40
8. USD to MYR:- MYR Weaker. 4.4510 from 4.4420 from 4.4260
a. 52 Week Range is 3.27 to 4.54.
b. Lowest: 4.885 (1998)
c. Decoupling of the MYR and Oil ?
d. Macquarie: 4.90 (Dec 31, 2017)
e. UOB: 4.35 (July 2017)
viewtopic.php?f=32&t=397&start=60
9. USD to SGD:- SGD Stronger; 1.4174 from 1.4209 from 1.4067
a. High 1.70 (2004); Low 1.20 (2011)
b. Expecting the SGD to drop against the USD
viewtopic.php?f=32&t=136&start=100
10. USD to CNY:- CNY Stronger; 6.8639 from 6.8774 from 6.8649
a. Expecting the CNY to continue dropping against the USD
viewtopic.php?f=32&t=7720&start=90
11. GBP to USD:- GBP Weaker. 1.2407 from 1.2488 from 1.2487
a. Will not be investing in the GBP versus the USD, as I think that it's in a multi-year decline
viewtopic.php?f=32&t=333&start=80
12. GBP to MYR:- GBP Weaker. 5.5230 from 5.5472 from 5.5267
a. Which has more effect ? Article 50 or Malaysian Election ?
13. Dollar Index - USD Stronger. 100.95 from 100.80 from 99.87
viewtopic.php?f=32&t=7616&start=60
Others
1. Sentiment - Complacent ?
2. Headwinds - Global Derivatives (US$700t); Global Debts (US$225t, 225% Global GDP); Global Corporate Debt (US$50t); China Debts (US$23t); Chinese Corporate Debts (US$18t); Chinese Local Government Debts (US$3t); China Bad Debts (US$1.5t); US Unfunded Debts (US$170t); US Bank Debts (US$60t); StockMarket Cap/GDP(200%); US Corporate Debt (US$5.5t); US Household Debt (US$12t); Emerging Markets US$ Debts (US$10t); US$ Oil Bad Debts (US$0.2t /US$2.5t); Foreigners Holding of US Treasuries (US$6.3t); US Students Loan (US$1.4t, +20% pa, 40% default); European NPLs (US$1.3t); Italian NPLs (US$0.4t); Junk Bonds Maturing (2017-2021) - US$1.5t; US Feds Leverage (113 to 1);
3. Tailwinds - Low Interest Rates, Cash Sidelines (US$60t); QE Programs US$18t - US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t); Negative Yield Bonds (US$10t); US Foreign Funds Repatriation (US$2.5t); Cash US Corps (US$1.3t); Cash Japanese Corp (US$2t); Buybacks, US Household Net Worth (US$89t); EM Consumption;
4. Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
5. Properties
a. Spore Properties
i) Prices declined by 11% since 2013; Sales dropped by half since 2013
ii) About 24,000 private homes are vacant
iii) Developers sold 8,000 homes in 2016 compared to 7400 in 2015;
iv) Supply: 13,000 in 2017; 9300 in 2018; 7300 in 2019
v) The existing stock of unsold homes may take three years to sell
vi) Americans became the 2nd most frequent buyers of high-end homes
vii) More than 800 condo units were resold at a loss in 2016 as economy slows
viii) Prices fell 3% in 2016 for third straight yearly decline
ix) When would they be relaxing the housing curbs ?
viewtopic.php?f=10&t=7750&start=40
b. Malaysia Properties
i) Knight Frank: Supply of about 44,000 high end condos in KL as of 1H 2016
ii) NAPIC: About 23% of residential & commercial properties from 1Q 2016 unsold
iii) Volume and Value of transactions declined 14% and 11%, in the first 9 mths of 2016
viewtopic.php?f=10&t=4220&start=150
c. China Properties
i) About 4 years supply at Tier 3 & 4 cities
ii) Various new curbs in more than 20 cities
iii) Beijing is + 23.5% yoy
iv) Shanghai is + 31.2% yoy
v) Shenzhen is +36.8% yoy
vi) Guangzhou is +21.1% yoy
viewtopic.php?f=10&t=8150&start=30
d. HK Properies
i) Price has surged almost 370% from 2003 to Sep 2015
ii) 18,000 new units completed in 2016. 94,000 units in next 3-4 years (up 40%)
iii) About 19,000 people left HK last year
iv) Margins have decreased to 25% from 40%
v) DB: Prices to drop 11% in 2017
vi) CS: Prices to drop 22% by end 2018
vii) Bocom: Prices to drop 20% to 30%, by end 2017
viii) Centaline: Mainland Chinese made up 16% of buyers during quarter
ix) DTZ: Prices to increase 5-10% by July 1, 2017
x) Citi: Prices to drop 15% in 2017
xi) 34,000 flats in pipeline for 2017
xii) Cushman & Wakefield: Prices to rise 5-10% in 1H 2017
xiii) Annual Supply of 20,000 from 8000
viewtopic.php?f=10&t=7785&p=202051#p202051
e. London Properties
i) Savills: 9% drop for luxury properties in 2016 and will not rise until 2019
ii) Hard Brexit: 5,000 jobs axed immediately? (1.1m jobs in Financial Services)
iii) London's population @ 8.7m. New households @ 50k pa. Supply 20k pa
iv) CEBR: Property prices in London to fall 6% in 2017
v) Molior: Homes built without buyer secured - 10,829, a 24% rise yoy
vi) Molior: 2 years to sell homes under construction
vii) Rightmove: Decline of 5% by end 2017
viewtopic.php?f=11&t=3673&start=70
6. Yield on 10 Year US Treasuries - Flat. 2.41% from 2.41% from 2.46%
Low 1.32%; High 2.69%.
a. New regulation on Money Markets would be decreasing yield for US Treasuries
7. Interest Rates:-
a. Expecting interest rates to rise slowly over next two years
b. About US$10t or about 1/4 of the world’s bonds now have negative yields
c. US Feds: Three rate hikes in 2017? Four rate hikes in 2018 ?
8. JNK (SPDR Barclays High Yield Bond ETF) - Higher. 36.96 from 36.90 from 36.88
9. Baltic Dry Index - Higher; 741 from 702 from 752; Low 290; High 1257; 2330 (2013)
The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Please use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments
Please Note:-
Support the forum button - If you have benefited from the ideas in the forum but have not participated in the discussions, we would appreciate your kind support to defray the expenses of maintaining the forum.
Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.
viewtopic.php?f=26&t=3168
Active Topics - Do you know that there's an "Active Topics" button? It's located on the top left hand corner of the Index Page:-
search.php?search_id=active_topics
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It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston - Billionaire Boss
- Posts: 111129
- Joined: Wed May 07, 2008 9:28 am
Re: Winston's Investment Ideas 04 (Oct 15 - Dec 17)
by winston » Sun Feb 26, 2017 11:18 am
TOL as of Feb 26, 2017
Warning Signs
As the US markets grind higher and move further into unchartered territories, the following is a long list of warning signs by the "experts":-
1. Consensus Inc. Bullish Sentiment: 75%
2. NYSE Put/Call Ratio: 0.80x
3. VIX: 11.5x — 65-day rolling volatility is at record low
4. Market Vane Bullish Sentiment: 68%
5. S&P P/E multiple: 26x
6. Investors Intelligence Sentiment: 61.8% bulls; 17.6% bears
7. The 14-day relative strength index: 77.4; > 70 level viewed as “overbought”
8. The S&P 500 has now gapped up nearly 8% above its 200 day moving average
9. Earnings expectations have significantly lagged market price action
10. S&P 500 climbed above year-end targets for over 1/2 Wall Street strategists
11. US Market / US Economy = 1.20
However, expensive can become more expensive, especially when there's a lot of liquidity in the system.
Intuitively, the US markets will continue to move higher, until it meets an unexpected strong opposite force.
However, all the current known headwinds out there, does not seemed to be strong enough to affect it's upward momentum.
In view of the above, it does hurt to be a bit careful but that does not mean that you should be too pessimistic.
Commodities:- Risk-Off[b] (Data as of Saturday)
1. Oil - Higher. US$54.02 from US$53.37 last week from US$53.85 two weeks ago. Vested in RH Petrogas
a. Glut 1m bpd - rebalancing in 2017? Supply 98.03m bpd; Demand 98.09m bpd
b. Global Stockpiles: 2b barrels ? US has 518m barrels
c. US SPR: 700m barrels; To sell 190m barrels from 2017-2025
d. Iran targetting to export 4m bpd by Mar 2017; Used to have 40m in storage
e. US Oil Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells
f. US Supply expected to increase by 250,000 bpd
g. China (4th largest producer) - Reserve life fallen from 10 years to 6 years
h. China Supply: Down 7% (300,000 bpd)
i. Saudi Aramco's IPO in 2018. Incentive for Saudis to maintain high oil prices ?
j. China: SPR reached 51/90 days; 2017 Imports to decrease?
k. Russia: ramping drilling activities in existing brownfields
l. OPEC: Cutting Production by 1.2m bpd
m. Libya: 700k bpd from 200k bpd (+0.5m bpd ); Used to produce 1.6m bpd
n. Fracking: Additional 0.5m bpd @ US$60; +1m bpd @ US$70 ?
o. Trump's deregulation may increase supply ?
p. How will the new sanctions on Iran affect Oil?
viewtopic.php?f=33&t=7550&start=210
2. Natural Gas - Lower: US$2.80 from US$2.84 from US$3.04. Not vested
a. Support 1.70; Resistance $4.00
b. Uses: Heating, Cooking, Transportation (CNG), Ammonia (Fertiliser), Hydrogen (Chemical Industry), Fabrics, Glass, Steel, Plastics Paint etc
c. High: US$13.69 (2008); Low: US$1.61 (March 2015)
d. Natural gas rigs: Dropped from 1,606 (2008) to low of 81. Now at 129
e. LNG are being exported from US to Latin America and AsiaTrade
f. Trade war with Mexico will bring prices down
g. Suppy increasing by 4% pa; Demand growing by 7% pa
h. Trump's deregulation may increase supply ?
i. Storage levels, which typically fall during winter months, have declined only modestly. That could result in another bout of oversupply as winter comes to an end
viewtopic.php?f=33&t=1863&start=130
3. Gold - Higher. US$1258 from US$1236 from US$1235. Record US$1920. Vested - Physical Gold Coins
a. Electronics, Gold Coins, Central Banks, Jewellery etc.
b. 250 oz of paper contract for every oz of physical gold holding on Comex ?
c. Output fell by 100 metric tons (3%), from 3,150 in 2015 to 3,050 in 2016
d. Demand increasing in Muslim countries as Gold is now a halal investment
e. Indians are supposedly paying 2 times spot due to their cash issues
f. Rising USD and interest rates, would not be good for gold
viewtopic.php?f=33&t=7589&p=202084#p202084
4. Silver - Higher. US$18.34 from US$17.98 from US$17.96. Range High: 49
a. Solar Panels, Data Storage, Antibacterial products, Silver Coins, Jewelery etc
b. Demand: 1.2b ounces in 2015
c. Supply: 0.9b ounces in 2015
d. 35% (7700 metric tons) for Electronics
e. 25% (5500 metric tons) for bullions & coins
f. India imports more Silver than the US
viewtopic.php?f=33&t=7589&p=202084#p202084
5. Coffee (Arabica Mar 17th) - Lower. US$142 from US$149 from US$146
L US$135; US$120; H US$175; US$300 (2011). Not vested
a. 150m Americans drink coffee daily (400m cups)
b. USA imports US$4b of coffee yearly
c. Supply: 152m bags; US$19b trade; Deficit 3.5m bags;
d. Demand 155m bags. By 2030, rising to 200m bags; 5% growth pa
e. Arabica, grown in Brazil (50m bags), is used in premium oulets. At risk from higher temperatures and more resilient pests. 60% of Production
f. Robusta, grown in Vietnam; Used in Instant Coffee; 40% more caffeine
g. What would be the breaking price for coffee ? In 2011, it touched US$300
h. Coffee Rust Disease in Central America lowered supply by 30% over past 3 yrs
i. By 2050, suitable land will halved and demand would have doubled
j. Farmers in Central America replacing coffee with cocoa due to climate change
k. Over 2.25 billion cups of coffee are consumed in the world every day
l. Growth: USA +1.5%; China +5%; India +4%
m. Bumper crops in Brazil, Colombia and Honduras
n. Record Arabica crop in 2016-2017; Price +30% in US for 2016
o. Robusta crop down 6% yoy; Price +60% in London for 2016
p. Illy: Rebalancing in 2017
q. Brazil is the biggest coffee producer, producing 1/3 of world’s coffee
r. Europe is the largest importer, accounting for 1/3 of world’s consumption.
s. Coffee is the most traded commodity in the world, following crude oil.
viewtopic.php?f=33&t=3812&start=80
6. Uranium (U3O8 UXC) - Lower. US$24.50 (Feb 20) from US$26.50 (Feb 13) from US$26.00 (Feb 06). Vested in Cameco (CCJ)
a. Breakeven: US$40 per lb
b. High US$136 (2008); $20 (2005) to $136 (2007), 580% rise in two years
c. Global production: 158m lbs pa; 15% of Supply from decommisioned weapons
d. Stockpile: 1b lbs ( till 2022) ; Companies normally store 5-7 years supply
e. Japanese Demand: 13 lbs pa; Starting 21/54 reactors ?
f. Global Demand: 160m lbs pa to 225m lbs pa (2025)
g. Number of Nuclear plants: +8 pa for next 20 years, from 440 to 595
h. 61 new reactors under construction; 149 planned; How many would actually be built ?
i. China: 35 existing nuclear plants; Currently, building 20; To build 177 more
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more
k. 25% long-term supply contracts expiring in 2017-18; 75% between 2017-2025;
l. Russia withdrew from Nuclear deal in Oct 2016; With Trump, would there be another deal or would there be another arms race ?
m. Paris Climate Deal - implemented in November 2016;
n. China's air pollution worsening so nuclear energy maybe expanding
o. Some buyers are locking in long term contracts at US$40, twice the spot rates
p. Kazakhtan reducing supply by 10% (40% of global production)
q. Risk: Can Natural Gas, Solar, Wind, Wave etc replace Nuclear ?
r. Nuclear power accounts for about 20% of the electricity generated in the U.S
s. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons etc;
viewtopic.php?f=33&t=705&start=80
7. Lithium - not vested
a. Global Lithium Demand: 185 ktpa; In 2025: 500 ktpa; Growth: 11% pa
b. Batteries: 40% demand now rising to 70% in 2025; Growth 45% yoy
c. 81% Global Supply: Chile, Australia and Argentina
d. 83% Global Suppy: Turning Around? Albemarle, SQM, FMC and Sichuan Tianqi
e. Cost of lithium-ion battery [b] fell 65% to around $350 per kwh
f. Vehicle: LIT (not vested)
viewtopic.php?f=33&t=1667&start=20
8. Palladium (Mar 17) - Lower; US$772 from US$777 from US$784
a. Support: US$600; US$500; US$200; Resistance: US$800; US$900;
b. Used in Catalytic Converters, Electronics, Dentistry, Medicine, Hydrogen Purification, Chemicals, Groundwater Treatment, Jewelry and Fuel Cells
c. Auto industry consumes 80% of supply
d. Demand by Auto industry doubled in past 10 years
e. Growth Demand: 3% a year for next 4 years
f. Russia and South Africa produced 3/4 of the world's mined palladium supply.
g. Heading toward its 8th annual supply deficit in 2017; 650,000 ounces in 2016
h. Vehicle: PALL (not vested)
viewtopic.php?f=33&t=7070
9. Zinc; Higher - US$2833 from US$2809 from US$2935
a. Supply Deficit 1.2m tons;
b. High US$4400 (2007); Low $1600 (Jan 2016)
c. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer,
d. Producers: Glencore (GLEN.L), Trevali (TV.TO), Nevsun Resources (NEV)
10. Sugar (#11); Lower - US$19.81 from US$20.63 from US$20.68
a. 5m tonnes deficit
b. Droughts in Thailand, Brazil and India
11. Nickel; Lower - US$10885 from US$11065
a. Used in Construction, Cars, Cookware, Jets, Appliances, Lithium Ion Batteries etc
b. Phillippines: 1/4 of Global Supply; 30 mines closed (1/2 PI Output)
c. Indonesia: Allowed exports but requires 51% ownership by locals
d. Chinese Stainless Steel: +12% yoy
e. Global Demand: +6% pa
f. Battery Demand for Nickel: +20% in 2016
g. Demand for Lithium Ion Batteries: +14% pa
h. Deficit: Rising from 67k tonnes in 2016 to 93k tonnes in 2017
i. Vehicle: JJN (iPath Bloomberg Nickel)
viewtopic.php?f=33&t=969
11. If there's a crash, Commodities would not be spared.
12. The High USD is not good for Commodities
13. Global economy is worsening eg. potential trade wars etc
Equities - Risk-On ( Data as of Saturday every week )
1. US Equities - Higher. 2367 from 2351 last week from 2316 two weeks ago. Sold Lockheed Martin
viewtopic.php?f=11&t=7643&start=200
2. HK Equities - Lower. 23966 from 24034 from 23575; No Trade
a. Support 21575; Resistance 24100;
viewtopic.php?f=10&t=7470&start=120
3. Shanghai Equities - Higher. 3253 from 3202 from 3197; Support at 2450; No Trade
viewtopic.php?f=10&t=7190&start=210
4. Spore Equities - No Trade.
5. Japan Equities - Higher. 19284 from 19235 from 19379
6. Malaysian Equities - Added to OSK. Sold IGB
7. Australian Equities - No Trade.
Medical Marijuana Industry
a. Trump's new AG, Jefferson Beauregard Sessions III hates marijuana
b. Trump's Health and Human Services secretary, Tom Price, also hates marijuana
c. The American marijuana industry employs 100,000 to 150,000 people
d. In comparison, the American coal industry employs only 85,000 Americans
e. Last year, legal marijuana spending was $7b. By 2021, it should reach $22b
f. Both legal and illegal sales in USA is $53b last year. Illegal sales took 85% of sales
g. Marijuana has been legalized for recreational use in 8 states including Washington, Colorado and California, as well as the District of Columbia.
viewtopic.php?f=63&t=7650&start=10
Currencies- Mixed
1. USD to JPY - JPY Stronger. 112.13 from 112.84 last week from 113.21 two weeks ago
a. 52 week range is 76 to 126
viewtopic.php?f=32&t=4205&start=180
2. SGD to MYR - SGD Stronger; 3.1603 from 3.1401 from 3.1262
3. AUD to USD - AUD Stronger. 0.7685 from 0.7679 from 0.7686
a. The range is 0.70 (2016) to 1.10 (2011)
viewtopic.php?f=32&t=5256&start=130
4. AUD to SGD - AUD Weaker. 1.0789 from 1.0884 from 1.0921
a. The range is 0.98 (2016) to 1.36 (2012).
b. Am concerned that the spat between the US and China will affect the AUD
5. AUD to MYR - AUD Weaker. 3.4097 from 3.4178 from 3.4140
a. The range is 2.20 (2008) to 3.41 (2017)
b. Waiting to convert AUD to MYR
6. EUR to USD - EUR Weaker. 1.0557 from 1.0619 from 1.0643
a. Will not be investing in the EUR as I think that it's in a multi-year decline
viewtopic.php?f=32&t=5523&start=100
7. USD to HKD - HKD Stronger. 7.7592 from 7.7600 from 7.7564
a. 52 week range is 7.7452 - 7.8296.
b. Will they remove the peg to the USD during a crisis ?
viewtopic.php?f=32&t=3529&start=40
8. USD to MYR:- MYR Stronger. 4.4370 from 4.4510 from 4.4420
a. 52 Week Range is 3.27 to 4.54.
b. Lowest: 4.885 (1998)
c. Decoupling of the MYR and Oil ?
d. Macquarie: 4.90 (Dec 31, 2017)
e. UOB: 4.35 (July 2017)
viewtopic.php?f=32&t=397&start=60
9. USD to SGD:- SGD Stronger; 1.4040 from 1.4174 from 1.4209
a. High 1.70 (2004); Low 1.20 (2011)
b. Expecting the SGD to drop against the USD
viewtopic.php?f=32&t=136&start=100
10. USD to CNY:- CNY Weaker; 6.8644 from 6.8639 from 6.8774
a. Expecting the CNY to continue dropping against the USD
viewtopic.php?f=32&t=7720&start=90
11. GBP to USD:- GBP Stronger. 1.2462 from 1.2407 from 1.2488
a. Will not be investing in the GBP versus the USD, as I think that it's in a multi-year decline
viewtopic.php?f=32&t=333&start=80
12. GBP to MYR:- GBP Stronger. 5.5295 from 5.5230 from 5.5472
a. Which has more effect ? Article 50 or Malaysian Election ?
13. Dollar Index - USD Stronger. 101.09 from 100.95 from 100.80
viewtopic.php?f=32&t=7616&start=60
Others
1. Sentiment - Complacent ?
2. Headwinds
a. Global
i) Derivatives (US$700t);
ii) Debts (US$225t, 225% GDP);
iii) Corporate Debt (US$50t);
b. China
i) Debts (US$23t);
ii) Corporate Debts (US$18t);
iii) Local Government Debts (US$3t);
iv) Bad Debts (US$1.5t);
c. US
i) Unfunded Debts (US$170t);
ii) Bank Debts (US$60t);
iii) Corporate Debts (US$5.5t);
iv) Oil Bad Debts (US$0.2t /US$2.5t);
v) Household Debts (US$12t);
vi) Auto Debts (US$1t);
vii) Mortgage Debts (US$8t);
viii) Foreigners Holding of US Treasuries (US$6.3t);
ix) Students Loan (US$1.4t, +20% pa, 40% default);
x) Junk Bonds Maturing (2017-2021) - US$1.5t;
xi) US Feds Leverage (113 to 1);
xii) StockMarket Cap/GDP (200%);
d. Europe
i) NPLs (US$1.3t);
ii) Italian NPLs (US$0.4t);
e. Emerging Markets:
i) US$ Debts (US$10t)
3. Tailwinds - Low Interest Rates, Cash Sidelines (US$60t); QE Programs US$18t - US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t); Negative Yield Bonds (US$4t from US$10t); US Foreign Funds Repatriation (US$2.5t); Cash US Corps (US$1.3t); Cash Japanese Corp (US$2t); Buybacks, US Household Net Worth (US$89t); EM Consumption;
4. Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
5. Properties
a. Spore Properties
i) Prices declined by 11% since 2013; Sales dropped by half since 2013
ii) About 24,000 private homes are vacant
iii) Developers sold 8,000 homes in 2016 compared to 7400 in 2015;
iv) Supply: 13,000 in 2017; 9300 in 2018; 7300 in 2019
v) The existing stock of unsold homes may take three years to sell
vi) Americans became the 2nd most frequent buyers of high-end homes
vii) More than 800 condo units were resold at a loss in 2016 as economy slows
viii) Prices fell 3% in 2016 for third straight yearly decline
ix) When would they be relaxing the housing curbs ?
x) >80% more homes being auctioned
viewtopic.php?f=10&t=7750&start=40
b. Malaysia Properties
i) Knight Frank: Supply of about 44,000 high end condos in KL as of 1H 2016
ii) NAPIC: About 23% of residential & commercial properties from 1Q 2016 unsold
iii) Volume and Value of transactions declined 14% and 11%, in the first 9 mths of 2016
viewtopic.php?f=10&t=4220&start=150
c. China Properties
i) About 4 years supply at Tier 3 & 4 cities
ii) Various new curbs in more than 20 cities
iii) Beijing is + 23.5% yoy
iv) Shanghai is + 31.2% yoy
v) Shenzhen is +36.8% yoy
vi) Guangzhou is +21.1% yoy
viewtopic.php?f=10&t=8150&start=30
d. HK Properies
i) Price has surged almost 370% from 2003 to Sep 2015
ii) 18,000 new units completed in 2016. 94,000 units in next 3-4 years (up 40%)
iii) About 19,000 people left HK last year
iv) Margins have decreased to 25% from 40%
v) DB: Prices to drop 11% in 2017
vi) CS: Prices to drop 22% by end 2018
vii) Bocom: Prices to drop 20% to 30%, by end 2017
viii) Centaline: Mainland Chinese made up 16% of buyers during quarter
ix) DTZ: Prices to increase 5-10% by July 1, 2017
x) Citi: Prices to drop 15% in 2017
xi) 34,000 flats in pipeline for 2017
xii) Cushman & Wakefield: Prices to rise 5-10% in 1H 2017
xiii) Annual Supply of 20,000 from 8000
viewtopic.php?f=10&t=7785&p=202051#p202051
e. London Properties
i) Savills: 9% drop for luxury properties in 2016 and will not rise until 2019
ii) Hard Brexit: 5,000 jobs axed immediately? (1.1m jobs in Financial Services)
iii) London's population @ 8.7m. New households @ 50k pa. Supply 20k pa
iv) CEBR: Property prices in London to fall 6% in 2017
v) Molior: Homes built without buyer secured - 10,829, a 24% rise yoy
vi) Molior: 2 years to sell homes under construction
vii) Rightmove: Decline of 5% by end 2017
viewtopic.php?f=11&t=3673&start=70
6. Yield on 10 Year US Treasuries - Flat. 2.31% from 2.41% from 2.41%
Low 1.32%; High 2.69%.
a. New regulation on Money Markets would be decreasing yield for US Treasuries
7. Interest Rates:-
a. Expecting interest rates to rise slowly over next two years
b. About US$10t or about 1/4 of the world’s bonds now have negative yields
c. US Feds: Three rate hikes in 2017? Four rate hikes in 2018 ?
d, Yield on 2-year German government bonds hit record lows, trading at negative 90 basis points
8. JNK (SPDR Barclays High Yield Bond ETF) - Higher. 37.15 from 36.96 from 36.90
9. Baltic Dry Index - Higher; 875 from 741 from 702; Low 290; High 1257; 2330 (2013)
The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Please use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments
Please Note:-
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Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.
viewtopic.php?f=26&t=3168
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search.php?search_id=active_topics
Warning Signs
As the US markets grind higher and move further into unchartered territories, the following is a long list of warning signs by the "experts":-
1. Consensus Inc. Bullish Sentiment: 75%
2. NYSE Put/Call Ratio: 0.80x
3. VIX: 11.5x — 65-day rolling volatility is at record low
4. Market Vane Bullish Sentiment: 68%
5. S&P P/E multiple: 26x
6. Investors Intelligence Sentiment: 61.8% bulls; 17.6% bears
7. The 14-day relative strength index: 77.4; > 70 level viewed as “overbought”
8. The S&P 500 has now gapped up nearly 8% above its 200 day moving average
9. Earnings expectations have significantly lagged market price action
10. S&P 500 climbed above year-end targets for over 1/2 Wall Street strategists
11. US Market / US Economy = 1.20
However, expensive can become more expensive, especially when there's a lot of liquidity in the system.
Intuitively, the US markets will continue to move higher, until it meets an unexpected strong opposite force.
However, all the current known headwinds out there, does not seemed to be strong enough to affect it's upward momentum.
In view of the above, it does hurt to be a bit careful but that does not mean that you should be too pessimistic.
Commodities:- Risk-Off[b] (Data as of Saturday)
1. Oil - Higher. US$54.02 from US$53.37 last week from US$53.85 two weeks ago. Vested in RH Petrogas
a. Glut 1m bpd - rebalancing in 2017? Supply 98.03m bpd; Demand 98.09m bpd
b. Global Stockpiles: 2b barrels ? US has 518m barrels
c. US SPR: 700m barrels; To sell 190m barrels from 2017-2025
d. Iran targetting to export 4m bpd by Mar 2017; Used to have 40m in storage
e. US Oil Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells
f. US Supply expected to increase by 250,000 bpd
g. China (4th largest producer) - Reserve life fallen from 10 years to 6 years
h. China Supply: Down 7% (300,000 bpd)
i. Saudi Aramco's IPO in 2018. Incentive for Saudis to maintain high oil prices ?
j. China: SPR reached 51/90 days; 2017 Imports to decrease?
k. Russia: ramping drilling activities in existing brownfields
l. OPEC: Cutting Production by 1.2m bpd
m. Libya: 700k bpd from 200k bpd (+0.5m bpd ); Used to produce 1.6m bpd
n. Fracking: Additional 0.5m bpd @ US$60; +1m bpd @ US$70 ?
o. Trump's deregulation may increase supply ?
p. How will the new sanctions on Iran affect Oil?
viewtopic.php?f=33&t=7550&start=210
2. Natural Gas - Lower: US$2.80 from US$2.84 from US$3.04. Not vested
a. Support 1.70; Resistance $4.00
b. Uses: Heating, Cooking, Transportation (CNG), Ammonia (Fertiliser), Hydrogen (Chemical Industry), Fabrics, Glass, Steel, Plastics Paint etc
c. High: US$13.69 (2008); Low: US$1.61 (March 2015)
d. Natural gas rigs: Dropped from 1,606 (2008) to low of 81. Now at 129
e. LNG are being exported from US to Latin America and AsiaTrade
f. Trade war with Mexico will bring prices down
g. Suppy increasing by 4% pa; Demand growing by 7% pa
h. Trump's deregulation may increase supply ?
i. Storage levels, which typically fall during winter months, have declined only modestly. That could result in another bout of oversupply as winter comes to an end
viewtopic.php?f=33&t=1863&start=130
3. Gold - Higher. US$1258 from US$1236 from US$1235. Record US$1920. Vested - Physical Gold Coins
a. Electronics, Gold Coins, Central Banks, Jewellery etc.
b. 250 oz of paper contract for every oz of physical gold holding on Comex ?
c. Output fell by 100 metric tons (3%), from 3,150 in 2015 to 3,050 in 2016
d. Demand increasing in Muslim countries as Gold is now a halal investment
e. Indians are supposedly paying 2 times spot due to their cash issues
f. Rising USD and interest rates, would not be good for gold
viewtopic.php?f=33&t=7589&p=202084#p202084
4. Silver - Higher. US$18.34 from US$17.98 from US$17.96. Range High: 49
a. Solar Panels, Data Storage, Antibacterial products, Silver Coins, Jewelery etc
b. Demand: 1.2b ounces in 2015
c. Supply: 0.9b ounces in 2015
d. 35% (7700 metric tons) for Electronics
e. 25% (5500 metric tons) for bullions & coins
f. India imports more Silver than the US
viewtopic.php?f=33&t=7589&p=202084#p202084
5. Coffee (Arabica Mar 17th) - Lower. US$142 from US$149 from US$146
L US$135; US$120; H US$175; US$300 (2011). Not vested
a. 150m Americans drink coffee daily (400m cups)
b. USA imports US$4b of coffee yearly
c. Supply: 152m bags; US$19b trade; Deficit 3.5m bags;
d. Demand 155m bags. By 2030, rising to 200m bags; 5% growth pa
e. Arabica, grown in Brazil (50m bags), is used in premium oulets. At risk from higher temperatures and more resilient pests. 60% of Production
f. Robusta, grown in Vietnam; Used in Instant Coffee; 40% more caffeine
g. What would be the breaking price for coffee ? In 2011, it touched US$300
h. Coffee Rust Disease in Central America lowered supply by 30% over past 3 yrs
i. By 2050, suitable land will halved and demand would have doubled
j. Farmers in Central America replacing coffee with cocoa due to climate change
k. Over 2.25 billion cups of coffee are consumed in the world every day
l. Growth: USA +1.5%; China +5%; India +4%
m. Bumper crops in Brazil, Colombia and Honduras
n. Record Arabica crop in 2016-2017; Price +30% in US for 2016
o. Robusta crop down 6% yoy; Price +60% in London for 2016
p. Illy: Rebalancing in 2017
q. Brazil is the biggest coffee producer, producing 1/3 of world’s coffee
r. Europe is the largest importer, accounting for 1/3 of world’s consumption.
s. Coffee is the most traded commodity in the world, following crude oil.
viewtopic.php?f=33&t=3812&start=80
6. Uranium (U3O8 UXC) - Lower. US$24.50 (Feb 20) from US$26.50 (Feb 13) from US$26.00 (Feb 06). Vested in Cameco (CCJ)
a. Breakeven: US$40 per lb
b. High US$136 (2008); $20 (2005) to $136 (2007), 580% rise in two years
c. Global production: 158m lbs pa; 15% of Supply from decommisioned weapons
d. Stockpile: 1b lbs ( till 2022) ; Companies normally store 5-7 years supply
e. Japanese Demand: 13 lbs pa; Starting 21/54 reactors ?
f. Global Demand: 160m lbs pa to 225m lbs pa (2025)
g. Number of Nuclear plants: +8 pa for next 20 years, from 440 to 595
h. 61 new reactors under construction; 149 planned; How many would actually be built ?
i. China: 35 existing nuclear plants; Currently, building 20; To build 177 more
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more
k. 25% long-term supply contracts expiring in 2017-18; 75% between 2017-2025;
l. Russia withdrew from Nuclear deal in Oct 2016; With Trump, would there be another deal or would there be another arms race ?
m. Paris Climate Deal - implemented in November 2016;
n. China's air pollution worsening so nuclear energy maybe expanding
o. Some buyers are locking in long term contracts at US$40, twice the spot rates
p. Kazakhtan reducing supply by 10% (40% of global production)
q. Risk: Can Natural Gas, Solar, Wind, Wave etc replace Nuclear ?
r. Nuclear power accounts for about 20% of the electricity generated in the U.S
s. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons etc;
viewtopic.php?f=33&t=705&start=80
7. Lithium - not vested
a. Global Lithium Demand: 185 ktpa; In 2025: 500 ktpa; Growth: 11% pa
b. Batteries: 40% demand now rising to 70% in 2025; Growth 45% yoy
c. 81% Global Supply: Chile, Australia and Argentina
d. 83% Global Suppy: Turning Around? Albemarle, SQM, FMC and Sichuan Tianqi
e. Cost of lithium-ion battery [b] fell 65% to around $350 per kwh
f. Vehicle: LIT (not vested)
viewtopic.php?f=33&t=1667&start=20
8. Palladium (Mar 17) - Lower; US$772 from US$777 from US$784
a. Support: US$600; US$500; US$200; Resistance: US$800; US$900;
b. Used in Catalytic Converters, Electronics, Dentistry, Medicine, Hydrogen Purification, Chemicals, Groundwater Treatment, Jewelry and Fuel Cells
c. Auto industry consumes 80% of supply
d. Demand by Auto industry doubled in past 10 years
e. Growth Demand: 3% a year for next 4 years
f. Russia and South Africa produced 3/4 of the world's mined palladium supply.
g. Heading toward its 8th annual supply deficit in 2017; 650,000 ounces in 2016
h. Vehicle: PALL (not vested)
viewtopic.php?f=33&t=7070
9. Zinc; Higher - US$2833 from US$2809 from US$2935
a. Supply Deficit 1.2m tons;
b. High US$4400 (2007); Low $1600 (Jan 2016)
c. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer,
d. Producers: Glencore (GLEN.L), Trevali (TV.TO), Nevsun Resources (NEV)
10. Sugar (#11); Lower - US$19.81 from US$20.63 from US$20.68
a. 5m tonnes deficit
b. Droughts in Thailand, Brazil and India
11. Nickel; Lower - US$10885 from US$11065
a. Used in Construction, Cars, Cookware, Jets, Appliances, Lithium Ion Batteries etc
b. Phillippines: 1/4 of Global Supply; 30 mines closed (1/2 PI Output)
c. Indonesia: Allowed exports but requires 51% ownership by locals
d. Chinese Stainless Steel: +12% yoy
e. Global Demand: +6% pa
f. Battery Demand for Nickel: +20% in 2016
g. Demand for Lithium Ion Batteries: +14% pa
h. Deficit: Rising from 67k tonnes in 2016 to 93k tonnes in 2017
i. Vehicle: JJN (iPath Bloomberg Nickel)
viewtopic.php?f=33&t=969
11. If there's a crash, Commodities would not be spared.
12. The High USD is not good for Commodities
13. Global economy is worsening eg. potential trade wars etc
Equities - Risk-On ( Data as of Saturday every week )
1. US Equities - Higher. 2367 from 2351 last week from 2316 two weeks ago. Sold Lockheed Martin
viewtopic.php?f=11&t=7643&start=200
2. HK Equities - Lower. 23966 from 24034 from 23575; No Trade
a. Support 21575; Resistance 24100;
viewtopic.php?f=10&t=7470&start=120
3. Shanghai Equities - Higher. 3253 from 3202 from 3197; Support at 2450; No Trade
viewtopic.php?f=10&t=7190&start=210
4. Spore Equities - No Trade.
5. Japan Equities - Higher. 19284 from 19235 from 19379
6. Malaysian Equities - Added to OSK. Sold IGB
7. Australian Equities - No Trade.
Medical Marijuana Industry
a. Trump's new AG, Jefferson Beauregard Sessions III hates marijuana
b. Trump's Health and Human Services secretary, Tom Price, also hates marijuana
c. The American marijuana industry employs 100,000 to 150,000 people
d. In comparison, the American coal industry employs only 85,000 Americans
e. Last year, legal marijuana spending was $7b. By 2021, it should reach $22b
f. Both legal and illegal sales in USA is $53b last year. Illegal sales took 85% of sales
g. Marijuana has been legalized for recreational use in 8 states including Washington, Colorado and California, as well as the District of Columbia.
viewtopic.php?f=63&t=7650&start=10
Currencies- Mixed
1. USD to JPY - JPY Stronger. 112.13 from 112.84 last week from 113.21 two weeks ago
a. 52 week range is 76 to 126
viewtopic.php?f=32&t=4205&start=180
2. SGD to MYR - SGD Stronger; 3.1603 from 3.1401 from 3.1262
3. AUD to USD - AUD Stronger. 0.7685 from 0.7679 from 0.7686
a. The range is 0.70 (2016) to 1.10 (2011)
viewtopic.php?f=32&t=5256&start=130
4. AUD to SGD - AUD Weaker. 1.0789 from 1.0884 from 1.0921
a. The range is 0.98 (2016) to 1.36 (2012).
b. Am concerned that the spat between the US and China will affect the AUD
5. AUD to MYR - AUD Weaker. 3.4097 from 3.4178 from 3.4140
a. The range is 2.20 (2008) to 3.41 (2017)
b. Waiting to convert AUD to MYR
6. EUR to USD - EUR Weaker. 1.0557 from 1.0619 from 1.0643
a. Will not be investing in the EUR as I think that it's in a multi-year decline
viewtopic.php?f=32&t=5523&start=100
7. USD to HKD - HKD Stronger. 7.7592 from 7.7600 from 7.7564
a. 52 week range is 7.7452 - 7.8296.
b. Will they remove the peg to the USD during a crisis ?
viewtopic.php?f=32&t=3529&start=40
8. USD to MYR:- MYR Stronger. 4.4370 from 4.4510 from 4.4420
a. 52 Week Range is 3.27 to 4.54.
b. Lowest: 4.885 (1998)
c. Decoupling of the MYR and Oil ?
d. Macquarie: 4.90 (Dec 31, 2017)
e. UOB: 4.35 (July 2017)
viewtopic.php?f=32&t=397&start=60
9. USD to SGD:- SGD Stronger; 1.4040 from 1.4174 from 1.4209
a. High 1.70 (2004); Low 1.20 (2011)
b. Expecting the SGD to drop against the USD
viewtopic.php?f=32&t=136&start=100
10. USD to CNY:- CNY Weaker; 6.8644 from 6.8639 from 6.8774
a. Expecting the CNY to continue dropping against the USD
viewtopic.php?f=32&t=7720&start=90
11. GBP to USD:- GBP Stronger. 1.2462 from 1.2407 from 1.2488
a. Will not be investing in the GBP versus the USD, as I think that it's in a multi-year decline
viewtopic.php?f=32&t=333&start=80
12. GBP to MYR:- GBP Stronger. 5.5295 from 5.5230 from 5.5472
a. Which has more effect ? Article 50 or Malaysian Election ?
13. Dollar Index - USD Stronger. 101.09 from 100.95 from 100.80
viewtopic.php?f=32&t=7616&start=60
Others
1. Sentiment - Complacent ?
2. Headwinds
a. Global
i) Derivatives (US$700t);
ii) Debts (US$225t, 225% GDP);
iii) Corporate Debt (US$50t);
b. China
i) Debts (US$23t);
ii) Corporate Debts (US$18t);
iii) Local Government Debts (US$3t);
iv) Bad Debts (US$1.5t);
c. US
i) Unfunded Debts (US$170t);
ii) Bank Debts (US$60t);
iii) Corporate Debts (US$5.5t);
iv) Oil Bad Debts (US$0.2t /US$2.5t);
v) Household Debts (US$12t);
vi) Auto Debts (US$1t);
vii) Mortgage Debts (US$8t);
viii) Foreigners Holding of US Treasuries (US$6.3t);
ix) Students Loan (US$1.4t, +20% pa, 40% default);
x) Junk Bonds Maturing (2017-2021) - US$1.5t;
xi) US Feds Leverage (113 to 1);
xii) StockMarket Cap/GDP (200%);
d. Europe
i) NPLs (US$1.3t);
ii) Italian NPLs (US$0.4t);
e. Emerging Markets:
i) US$ Debts (US$10t)
3. Tailwinds - Low Interest Rates, Cash Sidelines (US$60t); QE Programs US$18t - US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t); Negative Yield Bonds (US$4t from US$10t); US Foreign Funds Repatriation (US$2.5t); Cash US Corps (US$1.3t); Cash Japanese Corp (US$2t); Buybacks, US Household Net Worth (US$89t); EM Consumption;
4. Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
5. Properties
a. Spore Properties
i) Prices declined by 11% since 2013; Sales dropped by half since 2013
ii) About 24,000 private homes are vacant
iii) Developers sold 8,000 homes in 2016 compared to 7400 in 2015;
iv) Supply: 13,000 in 2017; 9300 in 2018; 7300 in 2019
v) The existing stock of unsold homes may take three years to sell
vi) Americans became the 2nd most frequent buyers of high-end homes
vii) More than 800 condo units were resold at a loss in 2016 as economy slows
viii) Prices fell 3% in 2016 for third straight yearly decline
ix) When would they be relaxing the housing curbs ?
x) >80% more homes being auctioned
viewtopic.php?f=10&t=7750&start=40
b. Malaysia Properties
i) Knight Frank: Supply of about 44,000 high end condos in KL as of 1H 2016
ii) NAPIC: About 23% of residential & commercial properties from 1Q 2016 unsold
iii) Volume and Value of transactions declined 14% and 11%, in the first 9 mths of 2016
viewtopic.php?f=10&t=4220&start=150
c. China Properties
i) About 4 years supply at Tier 3 & 4 cities
ii) Various new curbs in more than 20 cities
iii) Beijing is + 23.5% yoy
iv) Shanghai is + 31.2% yoy
v) Shenzhen is +36.8% yoy
vi) Guangzhou is +21.1% yoy
viewtopic.php?f=10&t=8150&start=30
d. HK Properies
i) Price has surged almost 370% from 2003 to Sep 2015
ii) 18,000 new units completed in 2016. 94,000 units in next 3-4 years (up 40%)
iii) About 19,000 people left HK last year
iv) Margins have decreased to 25% from 40%
v) DB: Prices to drop 11% in 2017
vi) CS: Prices to drop 22% by end 2018
vii) Bocom: Prices to drop 20% to 30%, by end 2017
viii) Centaline: Mainland Chinese made up 16% of buyers during quarter
ix) DTZ: Prices to increase 5-10% by July 1, 2017
x) Citi: Prices to drop 15% in 2017
xi) 34,000 flats in pipeline for 2017
xii) Cushman & Wakefield: Prices to rise 5-10% in 1H 2017
xiii) Annual Supply of 20,000 from 8000
viewtopic.php?f=10&t=7785&p=202051#p202051
e. London Properties
i) Savills: 9% drop for luxury properties in 2016 and will not rise until 2019
ii) Hard Brexit: 5,000 jobs axed immediately? (1.1m jobs in Financial Services)
iii) London's population @ 8.7m. New households @ 50k pa. Supply 20k pa
iv) CEBR: Property prices in London to fall 6% in 2017
v) Molior: Homes built without buyer secured - 10,829, a 24% rise yoy
vi) Molior: 2 years to sell homes under construction
vii) Rightmove: Decline of 5% by end 2017
viewtopic.php?f=11&t=3673&start=70
6. Yield on 10 Year US Treasuries - Flat. 2.31% from 2.41% from 2.41%
Low 1.32%; High 2.69%.
a. New regulation on Money Markets would be decreasing yield for US Treasuries
7. Interest Rates:-
a. Expecting interest rates to rise slowly over next two years
b. About US$10t or about 1/4 of the world’s bonds now have negative yields
c. US Feds: Three rate hikes in 2017? Four rate hikes in 2018 ?
d, Yield on 2-year German government bonds hit record lows, trading at negative 90 basis points
8. JNK (SPDR Barclays High Yield Bond ETF) - Higher. 37.15 from 36.96 from 36.90
9. Baltic Dry Index - Higher; 875 from 741 from 702; Low 290; High 1257; 2330 (2013)
The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Please use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments
Please Note:-
Support the forum button - If you have benefited from the ideas in the forum but have not participated in the discussions, we would appreciate your kind support to defray the expenses of maintaining the forum.
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viewtopic.php?f=26&t=3168
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It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston - Billionaire Boss
- Posts: 111129
- Joined: Wed May 07, 2008 9:28 am
Re: Winston's Investment Ideas 04 (Oct 15 - Dec 17)
by winston » Sun Mar 05, 2017 9:27 am
TOL as of March 05, 2017
New Money From the New Month
It's a new month and new money would be flowing into the markets again.
So was the 300 points rise in the Us markets on Thursday as a result of this money? Or are we expecting another spike in the markets next week from these new money?
Intuitively, I think that the new money has already being deployed. The rise last Thursday could be from Cash that has been set aside for redemption. And since they knew that new money would be coming in, they may have spent the existing Cash first.
Anyway, the US markets now does not seemed to have any more catalyst for it's upward momentum and it would not surprise me if it starts to dip a bit from here.
Whether we would have a crash is another story as the animal spirits have been unleashed. And there's no opposing force on the horizon that's enough to tame them for the time being.
Therefore, I need to remind myself that I can only short the markets aggresively after I see the "M" on the charts and not before. In addition, there's just too many optimists out there who believes in the hot air from Trump.
In the meantime, I need to raise Cash whenever possible and not to buy any more Equities unless the story is extremely convincing and that I'm willing to hold on to that counter for at least 3 years.
Commodities:- Risk-Off (Data as of Saturday)
1. Oil - Lower. US$53.20 from US$54.02 last week from US$53.37 two weeks ago. Vested in RH Petrogas
a. Glut 1m bpd - rebalancing in 2017? Supply 98.03m bpd; Demand 98.09m bpd
b. Global Stockpiles: 2b barrels ? US has 518m barrels
c. US SPR: 700m barrels; To sell 190m barrels from 2017-2025
d. Iran targetting to export 4m bpd by Mar 2017; Used to have 40m in storage
e. US Oil Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells
f. US Supply expected to increase by 250,000 bpd
g. China (4th largest producer) - Reserve life fallen from 10 years to 6 years
h. China Supply: Down 7% (300,000 bpd)
i. Saudi Aramco's IPO in 2018. Incentive for Saudis to maintain high oil prices
j. China: SPR reached 51/90 days; 2017 Imports to decrease?
k. Russia: ramping drilling activities in existing brownfields
l. OPEC: Cutting Production by 1.2m bpd
m. Libya: 700k bpd from 200k bpd (+0.5m bpd ); Used to produce 1.6m bpd
n. Fracking: Additional 0.5m bpd @ US$60; +1m bpd @ US$70 ?
o. Trump's deregulation may increase supply ?
p. How will the new sanctions on Iran affect Oil?
viewtopic.php?f=33&t=7550&start=210
2. Natural Gas - Flat: US$2.82 from US$2.80 from US$2.84. Not vested
a. Support 1.70; Resistance $4.00
b. Uses: Heating, Cooking, Transportation (CNG), Ammonia (Fertiliser), Hydrogen (Chemical Industry), Fabrics, Glass, Steel, Plastics Paint etc
c. High: US$13.69 (2008); Low: US$1.61 (March 2015)
d. Natural gas rigs: Dropped from 1,606 (2008) to low of 81. Now at 129
e. LNG are being exported from US to Latin America and AsiaTrade
f. Trade war with Mexico will bring prices dow8
g. Suppy increasing by 4% pa; Demand growing by 7% pa
h. Trump's deregulation may increase supply ?
i. Storage levels, which typically fall during winter months, have declined only modestly. That could result in another bout of oversupply as winter comes to an end
j. The increase of 7 Bcf puts gas stocks at 295 Bcf above the 5 year average for this time of year
viewtopic.php?f=33&t=1863&start=130
3. Gold - Lower. US$1235 from US$1258 from US$1236. Record US$1920.
Vested - Physical Gold Coins
a. Electronics, Gold Coins, Central Banks, Jewellery etc.
b. 250 oz of paper contract for every oz of physical gold holding on Comex ?
c. Output fell by 100 metric tons (3%), from 3,150 in 2015 to 3,050 in 2016
d. Demand increasing in Muslim countries as Gold is now a halal investment
e. Indians are supposedly paying 2 times spot due to their cash issues
f. Rising USD and interest rates, would not be good for gold
viewtopic.php?f=33&t=7589&p=202084#p202084
4. Silver - Lower. US$18.00 from US$18.34 from US$17.98. Range High: 49
a. Solar Panels, Data Storage, Antibacterial products, Silver Coins, Jewelery etc
b. Demand: 1.2b ounces in 2015
c. Supply: 0.9b ounces in 2015
d. 35% (7700 metric tons) for Electronics
e. 25% (5500 metric tons) for bullions & coins
f. India imports more Silver than the US
viewtopic.php?f=33&t=7589&p=202084#p202084
5. Coffee (Arabica Mar 17th) - Flat. US$143 from US$142 from US$149
L US$135; US$120; H US$175; US$300 (2011). Not vested
a. 150m Americans drink coffee daily (400m cups)
b. USA imports US$4b of coffee yearly
c. Supply: 152m bags; US$19b trade; Deficit 3.5m bags;
d. Demand 155m bags. By 2030, rising to 200m bags; 5% growth pa
e. Arabica, grown in Brazil (50m bags), is used in premium oulets. At risk from higher temperatures and more resilient pests. 60% of Production
f. Robusta, grown in Vietnam; Used in Instant Coffee; 40% more caffeine
g. What would be the breaking price for coffee ? In 2011, it touched US$300
h. Coffee Rust Disease in Central America lowered supply by 30% over past 3 yrs
i. By 2050, suitable land will halved and demand would have doubled
j. Farmers in Central America replacing coffee with cocoa due to climate change
k. Over 2.25 billion cups of coffee are consumed in the world every day
l. Growth: USA +1.5%; China +5%; India +4%
m. Bumper crops in Brazil, Colombia and Honduras
n. Record Arabica crop in 2016-2017; Price +30% in US for 2016
o. Robusta crop down 6% yoy; Price +60% in London for 2016
p. Illy: Rebalancing in 2017
q. Brazil is the biggest coffee producer, producing 1/3 of world’s coffee
r. Europe is the largest importer, accounting for 1/3 of world’s consumption.
s. Coffee is the most traded commodity in the world, following crude oil.
viewtopic.php?f=33&t=3812&start=80
6. Uranium (U3O8 UXC) - Lower. US$22.25 (Feb 27) from US$24.50 (Feb 20) from US$26.50 (Feb 13). Vested in Cameco (CCJ)
a. Breakeven: US$40 per lb
b. High US$136 (2008); $20 (2005) to $136 (2007), 580% rise in two years
c. Global production: 158m lbs pa; 15% of Supply from decommisioned weapons
d. Stockpile: 1b lbs ( till 2022) ; Companies normally store 5-7 years supply
e. Japanese Demand: 13 lbs pa; Starting 21/54 reactors ?
f. Global Demand: 160m lbs pa to 225m lbs pa (2025)
g. Number of Nuclear plants: +8 pa for next 20 years, from 440 to 595
h. 61 new reactors under construction; 149 planned; How many would actually be built ?
i. China: 35 existing nuclear plants; Currently, building 20; To build 177 more
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more
k. 25% long-term supply contracts expiring in 2017-18; 75% between 2017-2025;
l. Russia withdrew from Nuclear deal in Oct 2016; With Trump, would there be another deal or would there be another arms race ?
m. Paris Climate Deal - implemented in November 2016;
n. China's air pollution worsening so nuclear energy maybe expanding
o. Some buyers are locking in long term contracts at US$40, twice the spot rates
p. Kazakhtan reducing supply by 10% (40% of global production)
q. Risk: Can Natural Gas, Solar, Wind, Wave etc replace Nuclear ?
r. Nuclear power accounts for about 20% of the electricity generated in the U.S
s. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons etc;
viewtopic.php?f=33&t=705&start=80
7. Lithium - not vested
a. Global Lithium Demand: 185 ktpa; In 2025: 500 ktpa; Growth: 11% pa
b. Batteries: 40% demand now rising to 70% in 2025; Growth 45% yoy
c. 81% Global Supply: Chile, Australia and Argentina
d. 83% Global Suppy: Turning Around? Albemarle, SQM, FMC and Sichuan Tianqi
e. Cost of lithium-ion battery fell 65% to around $350 per kwh
f. Vehicle: LIT (not vested)
viewtopic.php?f=33&t=1667&start=20
8. Palladium (Mar 17) - Flat; US$774 from US$772 from US$777
a. Support: US$600; US$500; US$200; Resistance: US$800; US$900;
b. Used in Catalytic Converters, Electronics, Dentistry, Medicine, Hydrogen Purification, Chemicals, Groundwater Treatment, Jewelry and Fuel Cells
c. Auto industry consumes 80% of supply
d. Demand by Auto industry doubled in past 10 years
e. Growth Demand: 3% a year for next 4 years
f. Russia and South Africa produced 3/4 of the world's mined palladium supply.
g. Heading toward its 8th annual supply deficit in 2017; 650,000 ounces in 2016
h. Vehicle: PALL (not vested)
viewtopic.php?f=33&t=7070
9. Zinc; Lower - US$2786 from US$2833 from US$2809
a. Supply Deficit 1.2m tons;
b. High US$4400 (2007); Low $1600 (Jan 2016)
c. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer,
d. Producers: Glencore (GLEN.L), Trevali (TV.TO), Nevsun Resources (NEV)
10. Sugar (#11); Lower - US$19.57 from US$19.81 from US$20.63
a. 5m tonnes deficit
b. Droughts in Thailand, Brazil and India
11. Nickel; Higher - US$10978 from US$10885 from US$11065
a. Used in Construction, Cars, Cookware, Jets, Appliances, Lithium Ion Batteries etc
b. Phillippines: 1/4 of Global Supply; 30 mines closed (1/2 PI Output)
c. Indonesia: Allowed exports but requires 51% ownership by locals
d. Chinese Stainless Steel: +12% yoy
e. Global Demand: +6% pa
f. Battery Demand for Nickel: +20% in 2016
g. Demand for Lithium Ion Batteries: +14% pa
h. Deficit: Rising from 67k tonnes in 2016 to 93k tonnes in 2017
i. Vehicle: JJN (iPath Bloomberg Nickel)
viewtopic.php?f=33&t=969
11. If there's a crash, Commodities would not be spared.
12. The High USD is not good for Commodities
13. Global economy is worsening eg. potential trade wars etc
Equities - Risk-On ( Data as of Saturday every week )
1. US Equities - Higher. 2383 from 2367 last week from 2351 two weeks ago. No trade
viewtopic.php?f=11&t=7643&start=200
2. HK Equities - Lower. 23553 from 23966 from 24034; No Trade
a. Support 21575; Resistance 24100;
viewtopic.php?f=10&t=7470&start=120
3. Shanghai Equities - Lower. 3218 from 3253 from 3202; Support at 2450; No Trade
viewtopic.php?f=10&t=7190&start=210
4. Spore Equities - No Trade.
5. Japan Equities - Higher. 19469 from 19284 from 19235
6. Malaysian Equities - Added to OSK.
7. Australian Equities - No Trade.
Medical Marijuana Industry
a. Trump's new AG, Jefferson Beauregard Sessions III hates marijuana
b. Trump's Health and Human Services secretary, Tom Price, also hates marijuana
c. The American marijuana industry employs 100,000 to 150,000 people
d. In comparison, the American coal industry employs only 85,000 Americans
e. Last year, legal marijuana spending was $7b. By 2021, it should reach $22b
f. Both legal and illegal sales in USA is $53b last year. Illegal sales took 85% of sales
g. Marijuana has been legalized for recreational use in 8 states including Washington, Colorado and California, as well as the District of Columbia.
viewtopic.php?f=63&t=7650&start=10
Currencies- Mixed
1. USD to JPY - JPY Weaker. 114.01 from 112.13 last week from 112.84 two weeks ago
a. 52 week range is 76 to 126
viewtopic.php?f=32&t=4205&start=180
2. SGD to MYR - SGD Flat; 3.1607 from 3.1603 from 3.1401
3. AUD to USD - AUD Weaker. 0.7605 from 0.7685 from 0.7679
a. The range is 0.70 (2016) to 1.10 (2011)
viewtopic.php?f=32&t=5256&start=130
4. AUD to SGD - AUD Weaker. 1.0712 from 1.0789 from 1.0884
a. The range is 0.98 (2016) to 1.36 (2012).
b. Am concerned that the spat between the US and China will affect the AUD
5. AUD to MYR - AUD Weaker. 3.3858 from 3.4097 from 3.4178
a. The range is 2.20 (2008) to 3.41 (2017)
b. Waiting to convert AUD to MYR
6. EUR to USD - EUR Stronger. 1.0624 from 1.0557 from 1.0619
a. Will not be investing in the EUR as I think that it's in a multi-year decline
viewtopic.php?f=32&t=5523&start=100
7. USD to HKD - HKD Weaker. 7.7627 from 7.7592 from 7.7600
a. 52 week range is 7.7452 - 7.8296.
b. Will they remove the peg to the USD during a crisis ?
viewtopic.php?f=32&t=3529&start=40
8. USD to MYR:- MYR Weaker. 4.4520 from 4.4370 from 4.4510
a. 52 Week Range is 3.27 to 4.54.
b. Lowest: 4.885 (1998)
c. Decoupling of the MYR and Oil ?
d. Macquarie: 4.90 (Dec 31, 2017)
e. UOB: 4.35 (July 2017)
viewtopic.php?f=32&t=397&start=60
9. USD to SGD:- SGD Weaker; 1.4086 from 1.4040 from 1.4174
a. High 1.70 (2004); Low 1.20 (2011)
b. Expecting the SGD to drop against the USD
viewtopic.php?f=32&t=136&start=100
10. USD to CNY:- CNY Weaker; 6.8953 from 6.8644 from 6.8639
a. Expecting the CNY to continue dropping against the USD
viewtopic.php?f=32&t=7720&start=90
11. GBP to USD:- GBP Weaker. 1.2295 from 1.2462 from 1.2407
a. Will not be investing in the GBP versus the USD, as I think that it's in a multi-year decline
viewtopic.php?f=32&t=333&start=80
12. GBP to MYR:- GBP Weaker. 5.4737 from 5.5295 from 5.5230
a. Which has more effect ? Article 50 or Malaysian Election ?
13. Dollar Index - USD Stronger. 101.54 from 101.09 from 100.95
viewtopic.php?f=32&t=7616&start=60
Others
1. Sentiment - Complacent ?
2. Headwinds
a. Global
i) Derivatives (US$700t);
ii) Debts (US$225t, 225% GDP);
iii) Corporate Debt (US$50t);
b. China
i) Debts (US$23t)
ii) Debt / GDP = 277%
ii) Corporate Debts (US$18t)
iii) Local Government Debts (US$3t)
iv) Bad Debts (US$1.5t)
v) Mortgages: 1/4 Credit; 1/2 New Loans in 2016
c. US
i) Unfunded Debts (US$170t);
ii) Bank Debts (US$60t);
iii) Corporate Debts (US$5.5t);
iv) Oil Bad Debts (US$0.2t /US$2.5t);
v) Household Debts (US$12t);
vi) Auto Debts (US$1t);
vii) Mortgage Debts (US$8t);
viii) Foreigners Holding of US Treasuries (US$6.3t);
ix) Students Loan (US$1.4t, +20% pa, 40% default);
x) Junk Bonds Maturing (2017-2021) - US$1.5t;
xi) US Feds Leverage (113 to 1);
xii) StockMarket Cap/GDP (200%);
d. Europe
i) NPLs (US$1.3t)
ii) Italian NPLs (US$0.4t)
e. Emerging Markets:
i) US$ Debts (US$10t)
3. Tailwinds - Low Interest Rates, Cash Sidelines (US$60t); QE Programs US$18t - US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t); Negative Yield Bonds (US$4t from US$10t); US Foreign Funds Repatriation (US$2.5t); Cash US Corps (US$1.3t); Cash Japanese Corp (US$2t); Buybacks, US Household Net Worth (US$89t); EM Consumption;
4. Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
5. Properties
a. Spore Properties
i) Prices declined by 11% since 2013; Sales dropped by half since 2013
ii) About 24,000 private homes are vacant
iii) Developers sold 8,000 homes in 2016 compared to 7400 in 2015;
iv) Supply: 13,000 in 2017; 9300 in 2018; 7300 in 2019
v) The existing stock of unsold homes may take three years to sell
vi) Americans became the 2nd most frequent buyers of high-end homes
vii) More than 800 condo units were resold at a loss in 2016 as economy slows
viii) Prices fell 3% in 2016 for third straight yearly decline
ix) When would they be relaxing the housing curbs ?
x) >80% more homes being auctioned
viewtopic.php?f=10&t=7750&start=40
b. Malaysia Properties
i) Knight Frank: Supply of about 44,000 high end condos in KL as of 1H 2016
ii) NAPIC: About 23% of residential & commercial properties from 1Q 2016 unsold
iii) Volume and Value of transactions declined 14% and 11%, in the first 9 mths of 2016
viewtopic.php?f=10&t=4220&start=150
c. China Properties
i) About 4 years supply at Tier 3 & 4 cities
ii) Various new curbs in more than 20 cities
iii) Beijing is + 23.5% yoy
iv) Shanghai is + 31.2% yoy
v) Shenzhen is +36.8% yoy
vi) Guangzhou is +21.1% yoy
viewtopic.php?f=10&t=8150&start=30
d. HK Properies
i) Price has surged almost 370% from 2003 to Sep 2015
ii) 18,000 new units completed in 2016. 94,000 units in next 3-4 years (up 40%)
iii) About 19,000 people left HK last year
iv) Margins have decreased to 25% from 40%
v) DB: Prices to drop 11% in 2017
vi) CS: Prices to drop 22% by end 2018
vii) Bocom: Prices to drop 20% to 30%, by end 2017
viii) Centaline: Mainland Chinese made up 16% of buyers during quarter
ix) DTZ: Prices to increase 5-10% by July 1, 2017
x) Citi: Prices to drop 15% in 2017
xi) 34,000 flats in pipeline for 2017
xii) Cushman & Wakefield: Prices to rise 5-10% in 1H 2017
xiii) Annual Supply of 20,000 from 8000
viewtopic.php?f=10&t=7785&p=202051#p202051
e. London Properties
i) Savills: 9% drop for luxury properties in 2016 and will not rise until 2019
ii) Hard Brexit: 5,000 jobs axed immediately? (1.1m jobs in Financial Services)
iii) London's population @ 8.7m. New households @ 50k pa. Supply 20k pa
iv) CEBR: Property prices in London to fall 6% in 2017
v) Molior: Homes built without buyer secured - 10,829, a 24% rise yoy
vi) Molior: 2 years to sell homes under construction
vii) Rightmove: Decline of 5% by end 2017
viii) Prices have surged about 86% since 2009
ix) Knight Frank: Prices dropped 6% in 2016 and will prime prices will probably be flat for 2017
viewtopic.php?f=11&t=3673&start=70
6. Yield on 10 Year US Treasuries - Higher. 2.48% from 2.31% from 2.41%
Low 1.32%; High 2.69%.
a. New regulation on Money Markets would be decreasing yield for US Treasuries
7. Interest Rates:-
a. Expecting interest rates to rise slowly over next two years
b. About US$10t or about 1/4 of the world’s bonds now have negative yields
c. US Feds: Three rate hikes in 2017? Four rate hikes in 2018 ?
d, Yield on 2-year German government bonds hit record lows, trading at negative 90 basis points
8. JNK (SPDR Barclays High Yield Bond ETF) - Lower. 37.09 from 37.15 from 36.96
9. Baltic Dry Index - Higher; 939 from 875 from 741; Low 290; High 1257; 2330 (2013)
The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Please use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments
Please Note:-
Support the forum button - If you have benefited from the ideas in the forum but have not participated in the discussions, we would appreciate your kind support to defray the expenses of maintaining the forum.
Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.
viewtopic.php?f=26&t=3168
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New Money From the New Month
It's a new month and new money would be flowing into the markets again.
So was the 300 points rise in the Us markets on Thursday as a result of this money? Or are we expecting another spike in the markets next week from these new money?
Intuitively, I think that the new money has already being deployed. The rise last Thursday could be from Cash that has been set aside for redemption. And since they knew that new money would be coming in, they may have spent the existing Cash first.
Anyway, the US markets now does not seemed to have any more catalyst for it's upward momentum and it would not surprise me if it starts to dip a bit from here.
Whether we would have a crash is another story as the animal spirits have been unleashed. And there's no opposing force on the horizon that's enough to tame them for the time being.
Therefore, I need to remind myself that I can only short the markets aggresively after I see the "M" on the charts and not before. In addition, there's just too many optimists out there who believes in the hot air from Trump.
In the meantime, I need to raise Cash whenever possible and not to buy any more Equities unless the story is extremely convincing and that I'm willing to hold on to that counter for at least 3 years.
Commodities:- Risk-Off (Data as of Saturday)
1. Oil - Lower. US$53.20 from US$54.02 last week from US$53.37 two weeks ago. Vested in RH Petrogas
a. Glut 1m bpd - rebalancing in 2017? Supply 98.03m bpd; Demand 98.09m bpd
b. Global Stockpiles: 2b barrels ? US has 518m barrels
c. US SPR: 700m barrels; To sell 190m barrels from 2017-2025
d. Iran targetting to export 4m bpd by Mar 2017; Used to have 40m in storage
e. US Oil Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells
f. US Supply expected to increase by 250,000 bpd
g. China (4th largest producer) - Reserve life fallen from 10 years to 6 years
h. China Supply: Down 7% (300,000 bpd)
i. Saudi Aramco's IPO in 2018. Incentive for Saudis to maintain high oil prices
j. China: SPR reached 51/90 days; 2017 Imports to decrease?
k. Russia: ramping drilling activities in existing brownfields
l. OPEC: Cutting Production by 1.2m bpd
m. Libya: 700k bpd from 200k bpd (+0.5m bpd ); Used to produce 1.6m bpd
n. Fracking: Additional 0.5m bpd @ US$60; +1m bpd @ US$70 ?
o. Trump's deregulation may increase supply ?
p. How will the new sanctions on Iran affect Oil?
viewtopic.php?f=33&t=7550&start=210
2. Natural Gas - Flat: US$2.82 from US$2.80 from US$2.84. Not vested
a. Support 1.70; Resistance $4.00
b. Uses: Heating, Cooking, Transportation (CNG), Ammonia (Fertiliser), Hydrogen (Chemical Industry), Fabrics, Glass, Steel, Plastics Paint etc
c. High: US$13.69 (2008); Low: US$1.61 (March 2015)
d. Natural gas rigs: Dropped from 1,606 (2008) to low of 81. Now at 129
e. LNG are being exported from US to Latin America and AsiaTrade
f. Trade war with Mexico will bring prices dow8
g. Suppy increasing by 4% pa; Demand growing by 7% pa
h. Trump's deregulation may increase supply ?
i. Storage levels, which typically fall during winter months, have declined only modestly. That could result in another bout of oversupply as winter comes to an end
j. The increase of 7 Bcf puts gas stocks at 295 Bcf above the 5 year average for this time of year
viewtopic.php?f=33&t=1863&start=130
3. Gold - Lower. US$1235 from US$1258 from US$1236. Record US$1920.
Vested - Physical Gold Coins
a. Electronics, Gold Coins, Central Banks, Jewellery etc.
b. 250 oz of paper contract for every oz of physical gold holding on Comex ?
c. Output fell by 100 metric tons (3%), from 3,150 in 2015 to 3,050 in 2016
d. Demand increasing in Muslim countries as Gold is now a halal investment
e. Indians are supposedly paying 2 times spot due to their cash issues
f. Rising USD and interest rates, would not be good for gold
viewtopic.php?f=33&t=7589&p=202084#p202084
4. Silver - Lower. US$18.00 from US$18.34 from US$17.98. Range High: 49
a. Solar Panels, Data Storage, Antibacterial products, Silver Coins, Jewelery etc
b. Demand: 1.2b ounces in 2015
c. Supply: 0.9b ounces in 2015
d. 35% (7700 metric tons) for Electronics
e. 25% (5500 metric tons) for bullions & coins
f. India imports more Silver than the US
viewtopic.php?f=33&t=7589&p=202084#p202084
5. Coffee (Arabica Mar 17th) - Flat. US$143 from US$142 from US$149
L US$135; US$120; H US$175; US$300 (2011). Not vested
a. 150m Americans drink coffee daily (400m cups)
b. USA imports US$4b of coffee yearly
c. Supply: 152m bags; US$19b trade; Deficit 3.5m bags;
d. Demand 155m bags. By 2030, rising to 200m bags; 5% growth pa
e. Arabica, grown in Brazil (50m bags), is used in premium oulets. At risk from higher temperatures and more resilient pests. 60% of Production
f. Robusta, grown in Vietnam; Used in Instant Coffee; 40% more caffeine
g. What would be the breaking price for coffee ? In 2011, it touched US$300
h. Coffee Rust Disease in Central America lowered supply by 30% over past 3 yrs
i. By 2050, suitable land will halved and demand would have doubled
j. Farmers in Central America replacing coffee with cocoa due to climate change
k. Over 2.25 billion cups of coffee are consumed in the world every day
l. Growth: USA +1.5%; China +5%; India +4%
m. Bumper crops in Brazil, Colombia and Honduras
n. Record Arabica crop in 2016-2017; Price +30% in US for 2016
o. Robusta crop down 6% yoy; Price +60% in London for 2016
p. Illy: Rebalancing in 2017
q. Brazil is the biggest coffee producer, producing 1/3 of world’s coffee
r. Europe is the largest importer, accounting for 1/3 of world’s consumption.
s. Coffee is the most traded commodity in the world, following crude oil.
viewtopic.php?f=33&t=3812&start=80
6. Uranium (U3O8 UXC) - Lower. US$22.25 (Feb 27) from US$24.50 (Feb 20) from US$26.50 (Feb 13). Vested in Cameco (CCJ)
a. Breakeven: US$40 per lb
b. High US$136 (2008); $20 (2005) to $136 (2007), 580% rise in two years
c. Global production: 158m lbs pa; 15% of Supply from decommisioned weapons
d. Stockpile: 1b lbs ( till 2022) ; Companies normally store 5-7 years supply
e. Japanese Demand: 13 lbs pa; Starting 21/54 reactors ?
f. Global Demand: 160m lbs pa to 225m lbs pa (2025)
g. Number of Nuclear plants: +8 pa for next 20 years, from 440 to 595
h. 61 new reactors under construction; 149 planned; How many would actually be built ?
i. China: 35 existing nuclear plants; Currently, building 20; To build 177 more
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more
k. 25% long-term supply contracts expiring in 2017-18; 75% between 2017-2025;
l. Russia withdrew from Nuclear deal in Oct 2016; With Trump, would there be another deal or would there be another arms race ?
m. Paris Climate Deal - implemented in November 2016;
n. China's air pollution worsening so nuclear energy maybe expanding
o. Some buyers are locking in long term contracts at US$40, twice the spot rates
p. Kazakhtan reducing supply by 10% (40% of global production)
q. Risk: Can Natural Gas, Solar, Wind, Wave etc replace Nuclear ?
r. Nuclear power accounts for about 20% of the electricity generated in the U.S
s. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons etc;
viewtopic.php?f=33&t=705&start=80
7. Lithium - not vested
a. Global Lithium Demand: 185 ktpa; In 2025: 500 ktpa; Growth: 11% pa
b. Batteries: 40% demand now rising to 70% in 2025; Growth 45% yoy
c. 81% Global Supply: Chile, Australia and Argentina
d. 83% Global Suppy: Turning Around? Albemarle, SQM, FMC and Sichuan Tianqi
e. Cost of lithium-ion battery fell 65% to around $350 per kwh
f. Vehicle: LIT (not vested)
viewtopic.php?f=33&t=1667&start=20
8. Palladium (Mar 17) - Flat; US$774 from US$772 from US$777
a. Support: US$600; US$500; US$200; Resistance: US$800; US$900;
b. Used in Catalytic Converters, Electronics, Dentistry, Medicine, Hydrogen Purification, Chemicals, Groundwater Treatment, Jewelry and Fuel Cells
c. Auto industry consumes 80% of supply
d. Demand by Auto industry doubled in past 10 years
e. Growth Demand: 3% a year for next 4 years
f. Russia and South Africa produced 3/4 of the world's mined palladium supply.
g. Heading toward its 8th annual supply deficit in 2017; 650,000 ounces in 2016
h. Vehicle: PALL (not vested)
viewtopic.php?f=33&t=7070
9. Zinc; Lower - US$2786 from US$2833 from US$2809
a. Supply Deficit 1.2m tons;
b. High US$4400 (2007); Low $1600 (Jan 2016)
c. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer,
d. Producers: Glencore (GLEN.L), Trevali (TV.TO), Nevsun Resources (NEV)
10. Sugar (#11); Lower - US$19.57 from US$19.81 from US$20.63
a. 5m tonnes deficit
b. Droughts in Thailand, Brazil and India
11. Nickel; Higher - US$10978 from US$10885 from US$11065
a. Used in Construction, Cars, Cookware, Jets, Appliances, Lithium Ion Batteries etc
b. Phillippines: 1/4 of Global Supply; 30 mines closed (1/2 PI Output)
c. Indonesia: Allowed exports but requires 51% ownership by locals
d. Chinese Stainless Steel: +12% yoy
e. Global Demand: +6% pa
f. Battery Demand for Nickel: +20% in 2016
g. Demand for Lithium Ion Batteries: +14% pa
h. Deficit: Rising from 67k tonnes in 2016 to 93k tonnes in 2017
i. Vehicle: JJN (iPath Bloomberg Nickel)
viewtopic.php?f=33&t=969
11. If there's a crash, Commodities would not be spared.
12. The High USD is not good for Commodities
13. Global economy is worsening eg. potential trade wars etc
Equities - Risk-On ( Data as of Saturday every week )
1. US Equities - Higher. 2383 from 2367 last week from 2351 two weeks ago. No trade
viewtopic.php?f=11&t=7643&start=200
2. HK Equities - Lower. 23553 from 23966 from 24034; No Trade
a. Support 21575; Resistance 24100;
viewtopic.php?f=10&t=7470&start=120
3. Shanghai Equities - Lower. 3218 from 3253 from 3202; Support at 2450; No Trade
viewtopic.php?f=10&t=7190&start=210
4. Spore Equities - No Trade.
5. Japan Equities - Higher. 19469 from 19284 from 19235
6. Malaysian Equities - Added to OSK.
7. Australian Equities - No Trade.
Medical Marijuana Industry
a. Trump's new AG, Jefferson Beauregard Sessions III hates marijuana
b. Trump's Health and Human Services secretary, Tom Price, also hates marijuana
c. The American marijuana industry employs 100,000 to 150,000 people
d. In comparison, the American coal industry employs only 85,000 Americans
e. Last year, legal marijuana spending was $7b. By 2021, it should reach $22b
f. Both legal and illegal sales in USA is $53b last year. Illegal sales took 85% of sales
g. Marijuana has been legalized for recreational use in 8 states including Washington, Colorado and California, as well as the District of Columbia.
viewtopic.php?f=63&t=7650&start=10
Currencies- Mixed
1. USD to JPY - JPY Weaker. 114.01 from 112.13 last week from 112.84 two weeks ago
a. 52 week range is 76 to 126
viewtopic.php?f=32&t=4205&start=180
2. SGD to MYR - SGD Flat; 3.1607 from 3.1603 from 3.1401
3. AUD to USD - AUD Weaker. 0.7605 from 0.7685 from 0.7679
a. The range is 0.70 (2016) to 1.10 (2011)
viewtopic.php?f=32&t=5256&start=130
4. AUD to SGD - AUD Weaker. 1.0712 from 1.0789 from 1.0884
a. The range is 0.98 (2016) to 1.36 (2012).
b. Am concerned that the spat between the US and China will affect the AUD
5. AUD to MYR - AUD Weaker. 3.3858 from 3.4097 from 3.4178
a. The range is 2.20 (2008) to 3.41 (2017)
b. Waiting to convert AUD to MYR
6. EUR to USD - EUR Stronger. 1.0624 from 1.0557 from 1.0619
a. Will not be investing in the EUR as I think that it's in a multi-year decline
viewtopic.php?f=32&t=5523&start=100
7. USD to HKD - HKD Weaker. 7.7627 from 7.7592 from 7.7600
a. 52 week range is 7.7452 - 7.8296.
b. Will they remove the peg to the USD during a crisis ?
viewtopic.php?f=32&t=3529&start=40
8. USD to MYR:- MYR Weaker. 4.4520 from 4.4370 from 4.4510
a. 52 Week Range is 3.27 to 4.54.
b. Lowest: 4.885 (1998)
c. Decoupling of the MYR and Oil ?
d. Macquarie: 4.90 (Dec 31, 2017)
e. UOB: 4.35 (July 2017)
viewtopic.php?f=32&t=397&start=60
9. USD to SGD:- SGD Weaker; 1.4086 from 1.4040 from 1.4174
a. High 1.70 (2004); Low 1.20 (2011)
b. Expecting the SGD to drop against the USD
viewtopic.php?f=32&t=136&start=100
10. USD to CNY:- CNY Weaker; 6.8953 from 6.8644 from 6.8639
a. Expecting the CNY to continue dropping against the USD
viewtopic.php?f=32&t=7720&start=90
11. GBP to USD:- GBP Weaker. 1.2295 from 1.2462 from 1.2407
a. Will not be investing in the GBP versus the USD, as I think that it's in a multi-year decline
viewtopic.php?f=32&t=333&start=80
12. GBP to MYR:- GBP Weaker. 5.4737 from 5.5295 from 5.5230
a. Which has more effect ? Article 50 or Malaysian Election ?
13. Dollar Index - USD Stronger. 101.54 from 101.09 from 100.95
viewtopic.php?f=32&t=7616&start=60
Others
1. Sentiment - Complacent ?
2. Headwinds
a. Global
i) Derivatives (US$700t);
ii) Debts (US$225t, 225% GDP);
iii) Corporate Debt (US$50t);
b. China
i) Debts (US$23t)
ii) Debt / GDP = 277%
ii) Corporate Debts (US$18t)
iii) Local Government Debts (US$3t)
iv) Bad Debts (US$1.5t)
v) Mortgages: 1/4 Credit; 1/2 New Loans in 2016
c. US
i) Unfunded Debts (US$170t);
ii) Bank Debts (US$60t);
iii) Corporate Debts (US$5.5t);
iv) Oil Bad Debts (US$0.2t /US$2.5t);
v) Household Debts (US$12t);
vi) Auto Debts (US$1t);
vii) Mortgage Debts (US$8t);
viii) Foreigners Holding of US Treasuries (US$6.3t);
ix) Students Loan (US$1.4t, +20% pa, 40% default);
x) Junk Bonds Maturing (2017-2021) - US$1.5t;
xi) US Feds Leverage (113 to 1);
xii) StockMarket Cap/GDP (200%);
d. Europe
i) NPLs (US$1.3t)
ii) Italian NPLs (US$0.4t)
e. Emerging Markets:
i) US$ Debts (US$10t)
3. Tailwinds - Low Interest Rates, Cash Sidelines (US$60t); QE Programs US$18t - US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t); Negative Yield Bonds (US$4t from US$10t); US Foreign Funds Repatriation (US$2.5t); Cash US Corps (US$1.3t); Cash Japanese Corp (US$2t); Buybacks, US Household Net Worth (US$89t); EM Consumption;
4. Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
5. Properties
a. Spore Properties
i) Prices declined by 11% since 2013; Sales dropped by half since 2013
ii) About 24,000 private homes are vacant
iii) Developers sold 8,000 homes in 2016 compared to 7400 in 2015;
iv) Supply: 13,000 in 2017; 9300 in 2018; 7300 in 2019
v) The existing stock of unsold homes may take three years to sell
vi) Americans became the 2nd most frequent buyers of high-end homes
vii) More than 800 condo units were resold at a loss in 2016 as economy slows
viii) Prices fell 3% in 2016 for third straight yearly decline
ix) When would they be relaxing the housing curbs ?
x) >80% more homes being auctioned
viewtopic.php?f=10&t=7750&start=40
b. Malaysia Properties
i) Knight Frank: Supply of about 44,000 high end condos in KL as of 1H 2016
ii) NAPIC: About 23% of residential & commercial properties from 1Q 2016 unsold
iii) Volume and Value of transactions declined 14% and 11%, in the first 9 mths of 2016
viewtopic.php?f=10&t=4220&start=150
c. China Properties
i) About 4 years supply at Tier 3 & 4 cities
ii) Various new curbs in more than 20 cities
iii) Beijing is + 23.5% yoy
iv) Shanghai is + 31.2% yoy
v) Shenzhen is +36.8% yoy
vi) Guangzhou is +21.1% yoy
viewtopic.php?f=10&t=8150&start=30
d. HK Properies
i) Price has surged almost 370% from 2003 to Sep 2015
ii) 18,000 new units completed in 2016. 94,000 units in next 3-4 years (up 40%)
iii) About 19,000 people left HK last year
iv) Margins have decreased to 25% from 40%
v) DB: Prices to drop 11% in 2017
vi) CS: Prices to drop 22% by end 2018
vii) Bocom: Prices to drop 20% to 30%, by end 2017
viii) Centaline: Mainland Chinese made up 16% of buyers during quarter
ix) DTZ: Prices to increase 5-10% by July 1, 2017
x) Citi: Prices to drop 15% in 2017
xi) 34,000 flats in pipeline for 2017
xii) Cushman & Wakefield: Prices to rise 5-10% in 1H 2017
xiii) Annual Supply of 20,000 from 8000
viewtopic.php?f=10&t=7785&p=202051#p202051
e. London Properties
i) Savills: 9% drop for luxury properties in 2016 and will not rise until 2019
ii) Hard Brexit: 5,000 jobs axed immediately? (1.1m jobs in Financial Services)
iii) London's population @ 8.7m. New households @ 50k pa. Supply 20k pa
iv) CEBR: Property prices in London to fall 6% in 2017
v) Molior: Homes built without buyer secured - 10,829, a 24% rise yoy
vi) Molior: 2 years to sell homes under construction
vii) Rightmove: Decline of 5% by end 2017
viii) Prices have surged about 86% since 2009
ix) Knight Frank: Prices dropped 6% in 2016 and will prime prices will probably be flat for 2017
viewtopic.php?f=11&t=3673&start=70
6. Yield on 10 Year US Treasuries - Higher. 2.48% from 2.31% from 2.41%
Low 1.32%; High 2.69%.
a. New regulation on Money Markets would be decreasing yield for US Treasuries
7. Interest Rates:-
a. Expecting interest rates to rise slowly over next two years
b. About US$10t or about 1/4 of the world’s bonds now have negative yields
c. US Feds: Three rate hikes in 2017? Four rate hikes in 2018 ?
d, Yield on 2-year German government bonds hit record lows, trading at negative 90 basis points
8. JNK (SPDR Barclays High Yield Bond ETF) - Lower. 37.09 from 37.15 from 36.96
9. Baltic Dry Index - Higher; 939 from 875 from 741; Low 290; High 1257; 2330 (2013)
The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Please use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments
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It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston - Billionaire Boss
- Posts: 111129
- Joined: Wed May 07, 2008 9:28 am
Re: Winston's Investment Ideas 04 (Oct 15 - Dec 17)
by winston » Sun Mar 12, 2017 2:09 pm
TOL as of March 12, 2017
Higher Interest Rates?
Everyone is waiting for the Feds to raise interest rates next week. And if they dont, it would not be too good for the markets.
In addition, if they raise it by 50 bps instead of 25bps, it wouldn't be too good either.
Going forward, can they really continue on this path of rising interest rates for the next two years? And if do, wouldn't interest rates be touching about 5% on the 10 years?
Intuitively, I think that the Feds may be able to hike interest rates for maybe another year or so, before a slow-down or stock market crash, would force them to abandon the tightening.
In addition to the Interest Rates risk, there are a few other risks on the horizon:-
1. US Debt Ceiling Debate
2. European Elections (Contagion)
3. Brexit - Article 50
4. Trumps's Execution Risk
5. Trade War - Mexico, China etc
6. War - South China Sea, North Korea, Iran etc
In view of the above, I have been more careful than usual and have been trying the manage my risk as best as I can.
Commodities:- Risk-Off (Data as of Saturday)
1. Oil - Lower. US$48.39 from US$53.20 last week from US$54.02 two weeks ago. Vested in RH Petrogas; Support: US$42
a. Glut 1m bpd - rebalancing in 2017? Supply 98.03m bpd; Demand 98.09m bpd
b. Global Stockpiles: 2b barrels? US has 518m barrels
c. US SPR: 700m barrels; To sell 190m barrels from 2017-2025
d. Iran targeting to export 4m bpd by Mar 2017; Used to have 40m in storage
e. US Oil Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells
f. US Supply expected to increase by 250,000 bpd
g. China (4th largest producer) - Reserve life fallen from 10 years to 6 years
h. China Supply: Down 7% (300,000 bpd)
i. Saudi Aramco's IPO in 2018. Incentive for Saudis to maintain high oil prices?
j. China: SPR reached 51/90 days; 2017 Imports to decrease?
k. Russia: ramping drilling activities in existing brownfields
l. OPEC: Cutting 1.2m bpd; Will they cut more until the IPO of Saudi Aramco ?
m. Libya: 620k from 200k bpd (+0.5m bpd ); Used to produce 1.6m bpd
n. Fracking: Additional 0.5m bpd @ US$60; +1m bpd @ US$70 ?
o. Trump's deregulation may increase supply ?
p. How will the new sanctions on Iran affect Oil?
viewtopic.php?f=33&t=7550&start=210
2. Natural Gas - Higher: US$3.04 from US$2.82 from US$2.80. Not vested
a. Support 1.70; Resistance $4.00
b. Uses: Heating, Cooking, Transportation (CNG), Ammonia (Fertiliser), Hydrogen (Chemical Industry), Fabrics, Glass, Steel, Plastics Paint etc
c. High: US$13.69 (2008); Low: US$1.61 (March 2015)
d. Natural gas rigs: Dropped from 1,606 (2008) to low of 81. Now at 129
e. LNG are being exported from US to Latin America and AsiaTrade
f. Trade war with Mexico will bring prices down
g. Suppy increasing by 4% pa; Demand growing by 7% pa
h. Trump's deregulation may increase supply ?
i. Storage levels, which typically fall during winter months, have declined only modestly. That could result in another bout of oversupply as winter comes to an end
j. The increase of 7 Bcf puts gas stocks at 295 Bcf above the 5 year average for this time of year
viewtopic.php?f=33&t=1863&start=130
3. Gold - Lower. US$1205 from US$1235 from US$1258. Record US$1920.
Vested - Physical Gold Coins
a. Global Gold: 33,000 tons; US - 8000 tons; IMF - 3000 tons; Germany - 3000 tons
b. Electronics, Gold Coins, Central Banks, Jewellery etc.
c. 250 oz of paper contract for every oz of physical gold holding on Comex ?
d. Output fell by 100 metric tons (3%), from 3,150 in 2015 to 3,050 in 2016
e. Demand increasing in Muslim countries as Gold is now a halal investment
f. Indians are supposedly paying 2 times spot due to their cash issues
g. Rising USD and interest rates, would not be good for gold
viewtopic.php?f=33&t=7589&p=202084#p202084
4. Silver - Lower. US$17.06 from US$18.00 from US$18.34. Range High: 49
a. Solar Panels, Data Storage, Antibacterial products, Silver Coins, Jewelery etc
b. Demand: 1.2b ounces in 2015
c. Supply: 0.9b ounces in 2015
d. 35% (7700 metric tons) for Electronics
e. 25% (5500 metric tons) for bullions & coins
f. India imports more Silver than the US
viewtopic.php?f=33&t=7589&p=202084#p202084
5. Coffee (Arabica May 17) - Lower. US$141 from US$143 from US$142
L US$135; US$120; H US$175; US$300 (2011). Not vested
a. 150m Americans drink coffee daily (400m cups)
b. USA imports US$4b of coffee yearly
c. Supply: 152m bags; US$19b trade; Deficit 3.5m bags;
d. Demand 155m bags. By 2030, rising to 200m bags; 5% growth pa
e. Arabica, grown in Brazil (50m bags), is used in premium oulets. At risk from higher temperatures and more resilient pests. 60% of Production
f. Robusta, grown in Vietnam; Used in Instant Coffee; 40% more caffeine
g. What would be the breaking price for coffee ? In 2011, it touched US$300
h. Coffee Rust Disease in Central America lowered supply by 30% over past 3 yrs
i. By 2050, suitable land will halved and demand would have doubled
j. Farmers in Central America replacing coffee with cocoa due to climate change
k. Over 2.25 billion cups of coffee are consumed in the world every day
l. Growth: USA +1.5%; China +5%; India +4%
m. Bumper crops in Brazil, Colombia and Honduras
n. Record Arabica crop 2017? Price +30% in US for 2016
o. Robusta crop down 6% yoy; Price +60% in London for 2016
p. Illy: Rebalancing in 2017
q. Brazil is the biggest coffee producer, producing 1/3 of world’s coffee
r. Europe is the largest importer, accounting for 1/3 of world’s consumption.
s. Coffee is the most traded commodity in the world, following crude oil.
viewtopic.php?f=33&t=3812&start=80
6. Uranium (U3O8 UXC) - Higher. US$25.50 (Mar 06) from US$22.25 (Feb 27) from US$24.50 (Feb 20). Vested in Cameco (CCJ)
a. Breakeven: US$40 per lb
b. High US$136 (2008); $20 (2005) to $136 (2007), 580% rise in two years
c. Global production: 158m lbs pa; 15% of Supply from decommisioned weapons
d. Stockpile: 1b lbs ( till 2022) ; Companies normally store 5-7 years supply
e. Japanese Demand: 13 lbs pa; Starting 21/54 reactors ?
f. Global Demand: 160m lbs pa to 225m lbs pa (2025)
g. Number of Nuclear plants: +8 pa for next 20 years, from 440 to 595
h. 61 new reactors under construction; 149 planned; How many would be built ?
i. China: 35 existing nuclear plants; Currently, building 20; To build 177 more?
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more?
k. 25% long-term supply contracts expiring in 2017-18; 75% between 2017-2025;
l. Russia withdrew from Nuclear deal in Oct 2016; With Trump, would there be another deal or would there be another arms race ?
m. Paris Climate Deal - implemented in November 2016;
n. China's air pollution worsening so nuclear energy maybe expanding
o. Some buyers are locking in long term contracts at US$40, twice the spot rates
p. Kazakhtan reducing supply by 10% (40% of global production)
q. Competition: Natural Gas, Solar, Wind, Wave etc
r. Nuclear power accounts for about 20% of the electricity generated in the U.S
s. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons etc;
viewtopic.php?f=33&t=705&start=80
7. Lithium - not vested
a. Global Lithium Demand: 185 ktpa; In 2025: 500 ktpa; Growth: 11% pa
b. Batteries: 40% demand now rising to 70% in 2025; Growth 45% yoy
c. 81% Global Supply: Chile, Australia and Argentina
d. 83% Global Suppy: Turning Around? Albemarle, SQM, FMC and Sichuan Tianqi
e. Cost of lithium-ion battery fell 65% to around $350 per kwh
f. Vehicle: LIT (not vested)
viewtopic.php?f=33&t=1667&start=20
8. Palladium (Jun 17) - Lower; US$747 from US$774 from US$772
a. Support: US$600; US$500; US$200; Resistance: US$800; US$900;
b. Used in Catalytic Converters, Electronics, Dentistry, Medicine, Hydrogen Purification, Chemicals, Groundwater Treatment, Jewelry and Fuel Cells
c. Auto industry consumes 80% of supply
d. Demand by Auto industry doubled in past 10 years
e. Growth Demand: 3% a year for next 4 years
f. Russia and South Africa produced 3/4 of the world's mined palladium supply.
g. Heading toward its 8th annual supply deficit in 2017; 650,000 ounces in 2016
h. Vehicle: PALL (not vested)
viewtopic.php?f=33&t=7070
9. Zinc; Lower - US$2712 from US$2786 from US$2833
a. Supply Deficit 1.2m tons;
b. High US$4400 (2007); Low $1600 (Jan 2016)
c. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer,
d. Producers: Glencore (GLEN.L), Trevali (TV.TO), Nevsun Resources (NEV)
10. Sugar (#11); Lower - US$18.29 from US$19.57 from US$19.81
a. 5m tonnes deficit
b. Droughts in Thailand, Brazil and India
11. Nickel; Lower - US$9918 from US$10978 from US$10885
a. Used in Construction, Cars, Cookware, Jets, Appliances, Lithium Ion Batteries etc
b. Phillippines: 1/4 of Global Supply; 30 mines closed (1/2 PI Output)
c. Indonesia: Allowed exports but requires 51% ownership by locals
d. Chinese Stainless Steel: +12% yoy
e. Global Demand: +6% pa
f. Battery Demand for Nickel: +20% in 2016
g. Demand for Lithium Ion Batteries: +14% pa
h. Deficit: Rising from 67k tonnes in 2016 to 93k tonnes in 2017
i. Vehicle: JJN (iPath Bloomberg Nickel)
viewtopic.php?f=33&t=969
11. If there's a crash, Commodities would not be spared.
12. The High USD is not good for Commodities
13. Global economy may worsening eg. potential trade wars etc
Equities - Risk-On ( Data as of Saturday every week )
1. US Equities - Higher. 2373 from 2367 last week from 2351 two weeks ago. No trade
viewtopic.php?f=11&t=7643&start=200
2. HK Equities - Flat. 23562 from 23553 from 23966; Traded Cofco Meat 1610 and Nine Dragons Paper 2689.
a. Support 21575; Resistance 24100;
viewtopic.php?f=10&t=7470&start=120
3. Shanghai Equities - Lower. 3214 from 3218 from 3253; Support at 2450; No Trade
viewtopic.php?f=10&t=7190&start=210
4. Spore Equities - No Trade.
5. Japan Equities - Higher. 19605 from 19469 from 19284
6. Malaysian Equities - No trade
7. Australian Equities - No Trade.
Medical Marijuana Industry
a. Trump's AG, Jefferson Beauregard Sessions III hates marijuana
b. Trump's Health and Human Services secretary, Tom Price, also hates marijuana
c. The American marijuana industry now employs 100,000 to 150,000 people
d. In comparison, the American coal industry employs only 85,000 Americans
e. Last year, legal marijuana spending was $7b. By 2021, it should reach $22b
f. Both legal and illegal USA sales was $53b last year. Illegal sales was 85% of sales
g. Marijuana has been legalized for recreational use in 8 states including Washington, Colorado, California and the District of Columbia.
viewtopic.php?f=63&t=7650&start=10
Currencies- Mixed
1. USD to JPY - JPY Weaker. 114.77 from 114.01 last week from 112.13 two now weeks ago
a. 52 week range is 76 to 126
viewtopic.php?f=32&t=4205&start=180
2. SGD to MYR - SGD Weaker; 3.1528 from 3.1607 from 3.1603
3. AUD to USD - AUD Weaker. 0.7555 from 0.7605 from 0.7685
a. The range is 0.70 (2016) to 1.10 (2011)
viewtopic.php?f=32&t=5256&start=130
4. AUD to SGD - AUD Weaker. 1.0661 from 1.0712 from 1.0789
a. The range is 0.98 (2016) to 1.36 (2012).
b. Am concerned that the spat between the US and China will affect the AUD
5. AUD to MYR - AUD Weaker. 3.3631 from 3.3858 from 3.4097
a. The range is 2.20 (2008) to 3.41 (2017)
b. Waiting to convert more AUD to MYR
6. EUR to USD - EUR Stronger. 1.0676 from 1.0624 from 1.0557
a. Will not be investing in the EUR as I think that it's in a multi-year decline
viewtopic.php?f=32&t=5523&start=100
7. USD to HKD - HKD Flat. 7.7628 from 7.7627 from 7.7592
a. 52 week range is 7.7452 - 7.8296.
b. Will they remove the peg to the USD during a crisis ?
viewtopic.php?f=32&t=3529&start=40
8. USD to MYR:- MYR Stronger. 4.4490 from 4.4520 from 4.4370
a. 52 Week Range is 3.27 to 4.54.
b. Lowest: 4.885 (1998)
c. Decoupling of the MYR and Oil ?
d. Macquarie: 4.90 (Dec 31, 2017)
e. UOB: 4.35 (July 2017)
viewtopic.php?f=32&t=397&start=60
9. USD to SGD:- SGD Weaker; 1.4111 from 1.4086 from 1.4040
a. High 1.70 (2004); Low 1.20 (2011)
b. Expecting the SGD to drop against the USD
viewtopic.php?f=32&t=136&start=100
10. USD to CNY:- CNY Weaker; 6.9049 from 6.8953 from 6.8644
a. Expecting the CNY to continue dropping against the USD
viewtopic.php?f=32&t=7720&start=90
11. GBP to USD:- GBP Weaker. 1.2164 from 1.2295 from 1.2462
a. Will not be investing in the GBP versus the USD, as I think that it's in a multi-year decline
viewtopic.php?f=32&t=333&start=80
12. GBP to MYR:- GBP Weaker. 5.4118 from 5.4737 from 5.5295
a. Which has more effect ? Article 50 or Malaysian Election ?
13. Dollar Index - USD Weaker. 101.25 from 101.54 from 101.09
viewtopic.php?f=32&t=7616&start=60
Others
1. Sentiment - Complacent ?
2. Headwinds
a. Global
i) Derivatives (US$700t);
ii) Debts (US$225t, 225% GDP);
iii) Corporate Debt (US$50t);
b. China
i) Debts (US$23t)
ii) Debt / GDP = 277%
ii) Corporate Debts (US$18t)
iii) Local Government Debts (US$3t; >30% GDP)
iv) Bad Debts (US$2t)
v) Mortgages: 1/4 Credit; 1/2 New Loans in 2016
c. US
i) Unfunded Debts (US$170t);
ii) Bank Debts (US$60t);
iii) Corporate Debts (US$5.5t);
iv) Oil Bad Debts (US$0.2t /US$2.5t);
v) Household Debts (US$12t);
vi) Auto Debts (US$1t);
vii) Mortgage Debts (US$8t);
viii) Foreigners Holding of US Treasuries (US$6.3t);
ix) Students Loan (US$1.4t, +20% pa, 40% default);
x) Junk Bonds Maturing (2017-2021) - US$1.5t;
xi) US Feds Leverage (113 to 1);
xii) StockMarket Cap/GDP (200%);
d. Europe
i) NPLs (US$1.3t)
ii) Italian NPLs: 18%; US$0.4t
e. Emerging Markets:
i) US$ Debts (US$10t)
3. Tailwinds - Low Interest Rates, Cash Sidelines (US$60t); QE Programs US$18t - US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t); Negative Yield Bonds (US$4t from US$10t); US Foreign Funds Repatriation (US$2.5t); Cash US Corps (US$1.3t); Cash Japanese Corp (US$2t); Buybacks, US Household Net Worth (US$89t); EM Consumption;
4. Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
5. Properties
a. Spore Properties
i) Prices declined by 11% since 2013; Sales dropped by half since 2013
ii) About 24,000 private homes are vacant
iii) Developers sold 8,000 homes in 2016 compared to 7400 in 2015;
iv) Supply: 13,000 in 2017; 9300 in 2018; 7300 in 2019
v) The existing stock of unsold homes may take three years to sell
vi) Americans became the 2nd most frequent buyers of high-end homes
vii) More than 800 condo units were resold at a loss in 2016 as economy slows
viii) Prices fell 3% in 2016 for third straight yearly decline
ix) When would they be relaxing the housing curbs ?
x) >80% more homes being auctioned
xi) Unexpected relaxation of the curbs implies market is weaker than expected?
viewtopic.php?f=10&t=7750&start=40
b. Malaysia Properties
i) Knight Frank: Supply of about 44,000 high end condos in KL as of 1H 2016
ii) NAPIC: About 23% of residential & commercial properties from 1Q 2016 unsold
iii) Volume and Value of transactions declined 14% and 11%, in the first 9 mths of 2016
viewtopic.php?f=10&t=4220&start=150
c. China Properties
i) About 4 years supply at Tier 3 & 4 cities
ii) Various new curbs in more than 20 cities
iii) Beijing is + 23.5% yoy
iv) Shanghai is + 31.2% yoy
v) Shenzhen is +36.8% yoy
vi) Guangzhou is +21.1% yoy
viewtopic.php?f=10&t=8150&start=30
d. HK Properies
i) Price has surged almost 370% from 2003 to Sep 2015
ii) 18,000 new units completed in 2016. 94,000 units in next 3-4 years (up 40%)
iii) About 19,000 people left HK last year
iv) Margins have decreased to 25% from 40%
v) DB: Prices to drop 11% in 2017
vi) CS: Prices to drop 22% by end 2018
vii) Bocom: Prices to drop 20% to 30%, by end 2017
viii) Centaline: Mainland Chinese made up 16% of buyers during quarter
ix) DTZ: Prices to increase 5-10% by July 1, 2017
x) Citi: Prices to drop 15% in 2017
xi) 34,000 flats in pipeline for 2017
xii) Cushman & Wakefield: Prices to rise 5-10% in 1H 2017
xiii) Annual Supply of 20,000 from 8000%
Xiv) Centaline: Prices to increase 20% by Dec 2019
viewtopic.php?f=10&t=7785&p=202051#p202051
e. London Properties
i) Savills: 9% drop for luxury properties in 2016 and will not rise until 2019
ii) Hard Brexit: 5,000 jobs axed immediately? (1.1m jobs in Financial Services)
iii) London's population @ 8.7m. New households @ 50k pa. Supply 20k pa
iv) CEBR: Property prices in London to fall 6% in 2017
v) Molior: Homes built without buyer secured - 10,829, a 24% rise yoy
vi) Molior: 2 years to sell homes under construction
vii) Rightmove: Decline of 5% by end 2017
viii) Prices have surged about 86% since 2009
ix) Knight Frank: Prices dropped 6% in 2016 and will prime prices will probably be flat for 2017
viewtopic.php?f=11&t=3673&start=70
6. Yield on 10 Year US Treasuries - Higher. 2.58% from 2.48% from 2.31%
a. Low 1.32%; High 2.69%.
b. New regulations on Money Markets decreasing yield for US Treasuries
7. Interest Rates:-
a. Expecting interest rates to rise slowly over next two years
b. About US$9t or about 20% of the world’s bonds now have negative yields
c. US Feds: Three rate hikes in 2017? Four rate hikes in 2018 ?
d, Yield on 2-year German government bonds hit record lows, trading at negative 90 basis points
8. JNK (SPDR Barclays High Yield Bond ETF) - Lower. 36.33 from 37.09 from 37.15
9. Baltic Dry Index - Higher; 1086 from 939 from 875; Low 290; High 1257; 2330 (2013)
The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Please use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments
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Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.
viewtopic.php?f=26&t=3168
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search.php?search_id=active_topics
Higher Interest Rates?
Everyone is waiting for the Feds to raise interest rates next week. And if they dont, it would not be too good for the markets.
In addition, if they raise it by 50 bps instead of 25bps, it wouldn't be too good either.
Going forward, can they really continue on this path of rising interest rates for the next two years? And if do, wouldn't interest rates be touching about 5% on the 10 years?
Intuitively, I think that the Feds may be able to hike interest rates for maybe another year or so, before a slow-down or stock market crash, would force them to abandon the tightening.
In addition to the Interest Rates risk, there are a few other risks on the horizon:-
1. US Debt Ceiling Debate
2. European Elections (Contagion)
3. Brexit - Article 50
4. Trumps's Execution Risk
5. Trade War - Mexico, China etc
6. War - South China Sea, North Korea, Iran etc
In view of the above, I have been more careful than usual and have been trying the manage my risk as best as I can.
Commodities:- Risk-Off (Data as of Saturday)
1. Oil - Lower. US$48.39 from US$53.20 last week from US$54.02 two weeks ago. Vested in RH Petrogas; Support: US$42
a. Glut 1m bpd - rebalancing in 2017? Supply 98.03m bpd; Demand 98.09m bpd
b. Global Stockpiles: 2b barrels? US has 518m barrels
c. US SPR: 700m barrels; To sell 190m barrels from 2017-2025
d. Iran targeting to export 4m bpd by Mar 2017; Used to have 40m in storage
e. US Oil Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells
f. US Supply expected to increase by 250,000 bpd
g. China (4th largest producer) - Reserve life fallen from 10 years to 6 years
h. China Supply: Down 7% (300,000 bpd)
i. Saudi Aramco's IPO in 2018. Incentive for Saudis to maintain high oil prices?
j. China: SPR reached 51/90 days; 2017 Imports to decrease?
k. Russia: ramping drilling activities in existing brownfields
l. OPEC: Cutting 1.2m bpd; Will they cut more until the IPO of Saudi Aramco ?
m. Libya: 620k from 200k bpd (+0.5m bpd ); Used to produce 1.6m bpd
n. Fracking: Additional 0.5m bpd @ US$60; +1m bpd @ US$70 ?
o. Trump's deregulation may increase supply ?
p. How will the new sanctions on Iran affect Oil?
viewtopic.php?f=33&t=7550&start=210
2. Natural Gas - Higher: US$3.04 from US$2.82 from US$2.80. Not vested
a. Support 1.70; Resistance $4.00
b. Uses: Heating, Cooking, Transportation (CNG), Ammonia (Fertiliser), Hydrogen (Chemical Industry), Fabrics, Glass, Steel, Plastics Paint etc
c. High: US$13.69 (2008); Low: US$1.61 (March 2015)
d. Natural gas rigs: Dropped from 1,606 (2008) to low of 81. Now at 129
e. LNG are being exported from US to Latin America and AsiaTrade
f. Trade war with Mexico will bring prices down
g. Suppy increasing by 4% pa; Demand growing by 7% pa
h. Trump's deregulation may increase supply ?
i. Storage levels, which typically fall during winter months, have declined only modestly. That could result in another bout of oversupply as winter comes to an end
j. The increase of 7 Bcf puts gas stocks at 295 Bcf above the 5 year average for this time of year
viewtopic.php?f=33&t=1863&start=130
3. Gold - Lower. US$1205 from US$1235 from US$1258. Record US$1920.
Vested - Physical Gold Coins
a. Global Gold: 33,000 tons; US - 8000 tons; IMF - 3000 tons; Germany - 3000 tons
b. Electronics, Gold Coins, Central Banks, Jewellery etc.
c. 250 oz of paper contract for every oz of physical gold holding on Comex ?
d. Output fell by 100 metric tons (3%), from 3,150 in 2015 to 3,050 in 2016
e. Demand increasing in Muslim countries as Gold is now a halal investment
f. Indians are supposedly paying 2 times spot due to their cash issues
g. Rising USD and interest rates, would not be good for gold
viewtopic.php?f=33&t=7589&p=202084#p202084
4. Silver - Lower. US$17.06 from US$18.00 from US$18.34. Range High: 49
a. Solar Panels, Data Storage, Antibacterial products, Silver Coins, Jewelery etc
b. Demand: 1.2b ounces in 2015
c. Supply: 0.9b ounces in 2015
d. 35% (7700 metric tons) for Electronics
e. 25% (5500 metric tons) for bullions & coins
f. India imports more Silver than the US
viewtopic.php?f=33&t=7589&p=202084#p202084
5. Coffee (Arabica May 17) - Lower. US$141 from US$143 from US$142
L US$135; US$120; H US$175; US$300 (2011). Not vested
a. 150m Americans drink coffee daily (400m cups)
b. USA imports US$4b of coffee yearly
c. Supply: 152m bags; US$19b trade; Deficit 3.5m bags;
d. Demand 155m bags. By 2030, rising to 200m bags; 5% growth pa
e. Arabica, grown in Brazil (50m bags), is used in premium oulets. At risk from higher temperatures and more resilient pests. 60% of Production
f. Robusta, grown in Vietnam; Used in Instant Coffee; 40% more caffeine
g. What would be the breaking price for coffee ? In 2011, it touched US$300
h. Coffee Rust Disease in Central America lowered supply by 30% over past 3 yrs
i. By 2050, suitable land will halved and demand would have doubled
j. Farmers in Central America replacing coffee with cocoa due to climate change
k. Over 2.25 billion cups of coffee are consumed in the world every day
l. Growth: USA +1.5%; China +5%; India +4%
m. Bumper crops in Brazil, Colombia and Honduras
n. Record Arabica crop 2017? Price +30% in US for 2016
o. Robusta crop down 6% yoy; Price +60% in London for 2016
p. Illy: Rebalancing in 2017
q. Brazil is the biggest coffee producer, producing 1/3 of world’s coffee
r. Europe is the largest importer, accounting for 1/3 of world’s consumption.
s. Coffee is the most traded commodity in the world, following crude oil.
viewtopic.php?f=33&t=3812&start=80
6. Uranium (U3O8 UXC) - Higher. US$25.50 (Mar 06) from US$22.25 (Feb 27) from US$24.50 (Feb 20). Vested in Cameco (CCJ)
a. Breakeven: US$40 per lb
b. High US$136 (2008); $20 (2005) to $136 (2007), 580% rise in two years
c. Global production: 158m lbs pa; 15% of Supply from decommisioned weapons
d. Stockpile: 1b lbs ( till 2022) ; Companies normally store 5-7 years supply
e. Japanese Demand: 13 lbs pa; Starting 21/54 reactors ?
f. Global Demand: 160m lbs pa to 225m lbs pa (2025)
g. Number of Nuclear plants: +8 pa for next 20 years, from 440 to 595
h. 61 new reactors under construction; 149 planned; How many would be built ?
i. China: 35 existing nuclear plants; Currently, building 20; To build 177 more?
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more?
k. 25% long-term supply contracts expiring in 2017-18; 75% between 2017-2025;
l. Russia withdrew from Nuclear deal in Oct 2016; With Trump, would there be another deal or would there be another arms race ?
m. Paris Climate Deal - implemented in November 2016;
n. China's air pollution worsening so nuclear energy maybe expanding
o. Some buyers are locking in long term contracts at US$40, twice the spot rates
p. Kazakhtan reducing supply by 10% (40% of global production)
q. Competition: Natural Gas, Solar, Wind, Wave etc
r. Nuclear power accounts for about 20% of the electricity generated in the U.S
s. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons etc;
viewtopic.php?f=33&t=705&start=80
7. Lithium - not vested
a. Global Lithium Demand: 185 ktpa; In 2025: 500 ktpa; Growth: 11% pa
b. Batteries: 40% demand now rising to 70% in 2025; Growth 45% yoy
c. 81% Global Supply: Chile, Australia and Argentina
d. 83% Global Suppy: Turning Around? Albemarle, SQM, FMC and Sichuan Tianqi
e. Cost of lithium-ion battery fell 65% to around $350 per kwh
f. Vehicle: LIT (not vested)
viewtopic.php?f=33&t=1667&start=20
8. Palladium (Jun 17) - Lower; US$747 from US$774 from US$772
a. Support: US$600; US$500; US$200; Resistance: US$800; US$900;
b. Used in Catalytic Converters, Electronics, Dentistry, Medicine, Hydrogen Purification, Chemicals, Groundwater Treatment, Jewelry and Fuel Cells
c. Auto industry consumes 80% of supply
d. Demand by Auto industry doubled in past 10 years
e. Growth Demand: 3% a year for next 4 years
f. Russia and South Africa produced 3/4 of the world's mined palladium supply.
g. Heading toward its 8th annual supply deficit in 2017; 650,000 ounces in 2016
h. Vehicle: PALL (not vested)
viewtopic.php?f=33&t=7070
9. Zinc; Lower - US$2712 from US$2786 from US$2833
a. Supply Deficit 1.2m tons;
b. High US$4400 (2007); Low $1600 (Jan 2016)
c. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer,
d. Producers: Glencore (GLEN.L), Trevali (TV.TO), Nevsun Resources (NEV)
10. Sugar (#11); Lower - US$18.29 from US$19.57 from US$19.81
a. 5m tonnes deficit
b. Droughts in Thailand, Brazil and India
11. Nickel; Lower - US$9918 from US$10978 from US$10885
a. Used in Construction, Cars, Cookware, Jets, Appliances, Lithium Ion Batteries etc
b. Phillippines: 1/4 of Global Supply; 30 mines closed (1/2 PI Output)
c. Indonesia: Allowed exports but requires 51% ownership by locals
d. Chinese Stainless Steel: +12% yoy
e. Global Demand: +6% pa
f. Battery Demand for Nickel: +20% in 2016
g. Demand for Lithium Ion Batteries: +14% pa
h. Deficit: Rising from 67k tonnes in 2016 to 93k tonnes in 2017
i. Vehicle: JJN (iPath Bloomberg Nickel)
viewtopic.php?f=33&t=969
11. If there's a crash, Commodities would not be spared.
12. The High USD is not good for Commodities
13. Global economy may worsening eg. potential trade wars etc
Equities - Risk-On ( Data as of Saturday every week )
1. US Equities - Higher. 2373 from 2367 last week from 2351 two weeks ago. No trade
viewtopic.php?f=11&t=7643&start=200
2. HK Equities - Flat. 23562 from 23553 from 23966; Traded Cofco Meat 1610 and Nine Dragons Paper 2689.
a. Support 21575; Resistance 24100;
viewtopic.php?f=10&t=7470&start=120
3. Shanghai Equities - Lower. 3214 from 3218 from 3253; Support at 2450; No Trade
viewtopic.php?f=10&t=7190&start=210
4. Spore Equities - No Trade.
5. Japan Equities - Higher. 19605 from 19469 from 19284
6. Malaysian Equities - No trade
7. Australian Equities - No Trade.
Medical Marijuana Industry
a. Trump's AG, Jefferson Beauregard Sessions III hates marijuana
b. Trump's Health and Human Services secretary, Tom Price, also hates marijuana
c. The American marijuana industry now employs 100,000 to 150,000 people
d. In comparison, the American coal industry employs only 85,000 Americans
e. Last year, legal marijuana spending was $7b. By 2021, it should reach $22b
f. Both legal and illegal USA sales was $53b last year. Illegal sales was 85% of sales
g. Marijuana has been legalized for recreational use in 8 states including Washington, Colorado, California and the District of Columbia.
viewtopic.php?f=63&t=7650&start=10
Currencies- Mixed
1. USD to JPY - JPY Weaker. 114.77 from 114.01 last week from 112.13 two now weeks ago
a. 52 week range is 76 to 126
viewtopic.php?f=32&t=4205&start=180
2. SGD to MYR - SGD Weaker; 3.1528 from 3.1607 from 3.1603
3. AUD to USD - AUD Weaker. 0.7555 from 0.7605 from 0.7685
a. The range is 0.70 (2016) to 1.10 (2011)
viewtopic.php?f=32&t=5256&start=130
4. AUD to SGD - AUD Weaker. 1.0661 from 1.0712 from 1.0789
a. The range is 0.98 (2016) to 1.36 (2012).
b. Am concerned that the spat between the US and China will affect the AUD
5. AUD to MYR - AUD Weaker. 3.3631 from 3.3858 from 3.4097
a. The range is 2.20 (2008) to 3.41 (2017)
b. Waiting to convert more AUD to MYR
6. EUR to USD - EUR Stronger. 1.0676 from 1.0624 from 1.0557
a. Will not be investing in the EUR as I think that it's in a multi-year decline
viewtopic.php?f=32&t=5523&start=100
7. USD to HKD - HKD Flat. 7.7628 from 7.7627 from 7.7592
a. 52 week range is 7.7452 - 7.8296.
b. Will they remove the peg to the USD during a crisis ?
viewtopic.php?f=32&t=3529&start=40
8. USD to MYR:- MYR Stronger. 4.4490 from 4.4520 from 4.4370
a. 52 Week Range is 3.27 to 4.54.
b. Lowest: 4.885 (1998)
c. Decoupling of the MYR and Oil ?
d. Macquarie: 4.90 (Dec 31, 2017)
e. UOB: 4.35 (July 2017)
viewtopic.php?f=32&t=397&start=60
9. USD to SGD:- SGD Weaker; 1.4111 from 1.4086 from 1.4040
a. High 1.70 (2004); Low 1.20 (2011)
b. Expecting the SGD to drop against the USD
viewtopic.php?f=32&t=136&start=100
10. USD to CNY:- CNY Weaker; 6.9049 from 6.8953 from 6.8644
a. Expecting the CNY to continue dropping against the USD
viewtopic.php?f=32&t=7720&start=90
11. GBP to USD:- GBP Weaker. 1.2164 from 1.2295 from 1.2462
a. Will not be investing in the GBP versus the USD, as I think that it's in a multi-year decline
viewtopic.php?f=32&t=333&start=80
12. GBP to MYR:- GBP Weaker. 5.4118 from 5.4737 from 5.5295
a. Which has more effect ? Article 50 or Malaysian Election ?
13. Dollar Index - USD Weaker. 101.25 from 101.54 from 101.09
viewtopic.php?f=32&t=7616&start=60
Others
1. Sentiment - Complacent ?
2. Headwinds
a. Global
i) Derivatives (US$700t);
ii) Debts (US$225t, 225% GDP);
iii) Corporate Debt (US$50t);
b. China
i) Debts (US$23t)
ii) Debt / GDP = 277%
ii) Corporate Debts (US$18t)
iii) Local Government Debts (US$3t; >30% GDP)
iv) Bad Debts (US$2t)
v) Mortgages: 1/4 Credit; 1/2 New Loans in 2016
c. US
i) Unfunded Debts (US$170t);
ii) Bank Debts (US$60t);
iii) Corporate Debts (US$5.5t);
iv) Oil Bad Debts (US$0.2t /US$2.5t);
v) Household Debts (US$12t);
vi) Auto Debts (US$1t);
vii) Mortgage Debts (US$8t);
viii) Foreigners Holding of US Treasuries (US$6.3t);
ix) Students Loan (US$1.4t, +20% pa, 40% default);
x) Junk Bonds Maturing (2017-2021) - US$1.5t;
xi) US Feds Leverage (113 to 1);
xii) StockMarket Cap/GDP (200%);
d. Europe
i) NPLs (US$1.3t)
ii) Italian NPLs: 18%; US$0.4t
e. Emerging Markets:
i) US$ Debts (US$10t)
3. Tailwinds - Low Interest Rates, Cash Sidelines (US$60t); QE Programs US$18t - US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t); Negative Yield Bonds (US$4t from US$10t); US Foreign Funds Repatriation (US$2.5t); Cash US Corps (US$1.3t); Cash Japanese Corp (US$2t); Buybacks, US Household Net Worth (US$89t); EM Consumption;
4. Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
5. Properties
a. Spore Properties
i) Prices declined by 11% since 2013; Sales dropped by half since 2013
ii) About 24,000 private homes are vacant
iii) Developers sold 8,000 homes in 2016 compared to 7400 in 2015;
iv) Supply: 13,000 in 2017; 9300 in 2018; 7300 in 2019
v) The existing stock of unsold homes may take three years to sell
vi) Americans became the 2nd most frequent buyers of high-end homes
vii) More than 800 condo units were resold at a loss in 2016 as economy slows
viii) Prices fell 3% in 2016 for third straight yearly decline
ix) When would they be relaxing the housing curbs ?
x) >80% more homes being auctioned
xi) Unexpected relaxation of the curbs implies market is weaker than expected?
viewtopic.php?f=10&t=7750&start=40
b. Malaysia Properties
i) Knight Frank: Supply of about 44,000 high end condos in KL as of 1H 2016
ii) NAPIC: About 23% of residential & commercial properties from 1Q 2016 unsold
iii) Volume and Value of transactions declined 14% and 11%, in the first 9 mths of 2016
viewtopic.php?f=10&t=4220&start=150
c. China Properties
i) About 4 years supply at Tier 3 & 4 cities
ii) Various new curbs in more than 20 cities
iii) Beijing is + 23.5% yoy
iv) Shanghai is + 31.2% yoy
v) Shenzhen is +36.8% yoy
vi) Guangzhou is +21.1% yoy
viewtopic.php?f=10&t=8150&start=30
d. HK Properies
i) Price has surged almost 370% from 2003 to Sep 2015
ii) 18,000 new units completed in 2016. 94,000 units in next 3-4 years (up 40%)
iii) About 19,000 people left HK last year
iv) Margins have decreased to 25% from 40%
v) DB: Prices to drop 11% in 2017
vi) CS: Prices to drop 22% by end 2018
vii) Bocom: Prices to drop 20% to 30%, by end 2017
viii) Centaline: Mainland Chinese made up 16% of buyers during quarter
ix) DTZ: Prices to increase 5-10% by July 1, 2017
x) Citi: Prices to drop 15% in 2017
xi) 34,000 flats in pipeline for 2017
xii) Cushman & Wakefield: Prices to rise 5-10% in 1H 2017
xiii) Annual Supply of 20,000 from 8000%
Xiv) Centaline: Prices to increase 20% by Dec 2019
viewtopic.php?f=10&t=7785&p=202051#p202051
e. London Properties
i) Savills: 9% drop for luxury properties in 2016 and will not rise until 2019
ii) Hard Brexit: 5,000 jobs axed immediately? (1.1m jobs in Financial Services)
iii) London's population @ 8.7m. New households @ 50k pa. Supply 20k pa
iv) CEBR: Property prices in London to fall 6% in 2017
v) Molior: Homes built without buyer secured - 10,829, a 24% rise yoy
vi) Molior: 2 years to sell homes under construction
vii) Rightmove: Decline of 5% by end 2017
viii) Prices have surged about 86% since 2009
ix) Knight Frank: Prices dropped 6% in 2016 and will prime prices will probably be flat for 2017
viewtopic.php?f=11&t=3673&start=70
6. Yield on 10 Year US Treasuries - Higher. 2.58% from 2.48% from 2.31%
a. Low 1.32%; High 2.69%.
b. New regulations on Money Markets decreasing yield for US Treasuries
7. Interest Rates:-
a. Expecting interest rates to rise slowly over next two years
b. About US$9t or about 20% of the world’s bonds now have negative yields
c. US Feds: Three rate hikes in 2017? Four rate hikes in 2018 ?
d, Yield on 2-year German government bonds hit record lows, trading at negative 90 basis points
8. JNK (SPDR Barclays High Yield Bond ETF) - Lower. 36.33 from 37.09 from 37.15
9. Baltic Dry Index - Higher; 1086 from 939 from 875; Low 290; High 1257; 2330 (2013)
The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Please use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments
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It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston - Billionaire Boss
- Posts: 111129
- Joined: Wed May 07, 2008 9:28 am
Re: Winston's Investment Ideas 04 (Oct 15 - Dec 17)
by winston » Sun Mar 19, 2017 12:38 pm
TOL as of March 19, 2017
Market Timing
As the US markets have not gone anywhere for the past two weeks, the number of bears are starting to grow as well as becoming louder.
Before, we start to sell everything and head for the hills, it may be also useful to hear what some of the bulls are saying:-
Recessions: Since WWII, every U.S. recession has begun with job losses. Today, the economy is adding about 200,000 jobs per month. “Jobs are up, wages are up, corporate earnings are strong, and consumer confidence is up”. “There’s no recession in the offing.”
Financial Crisis: “Banks are healthy, cash reserves are up, bank profits are up.” Financials is the best-performing sector since the election. In short, we “don’t seem to be on the edge” of a financial crisis.
Extreme Valuations and Sentiment: U.S. Stock valuations are “definitely more expensive than average,” but “maybe the stock market deserves a higher [than average] valuation” given rock-bottom interest rates, low energy prices, low inflation, an improving economy and rising corporate profits.
On the sentiment front, the amount of money going into bond funds since the market bottom in 2009 has dwarfed the amount going into stock funds: $1.5 trillion vs. just $256 billion. That’s a sign individual investors still haven’t embraced the bull market.
( You can read more on the above at:- viewtopic.php?f=16&t=5910&start=140 )
In view of the above, isn't it better to have a balanced approach and to listen to both sides of the story, instead of being too pessimistic ?
Being "catiously bullish" may still be the right way to go, until we see a "M" on the charts.
Commodities:- Risk-Off (Data as of Saturday)
1. Oil - Higher. US$48.72 from US$48.39 last week from US$53.20 two weeks ago. Vested in RH Petrogas; Support: US$42
a. Glut 1m bpd - rebalancing in 2017? Supply 98.03m bpd; Demand 98.09m bpd
b. Global Stockpiles: 2b barrels? US has 518m barrels
c. US SPR: 700m barrels; To sell 190m barrels from 2017-2025
d. Iran targeting to export 4m bpd by Mar 2017; Used to have 40m in storage
e. US Oil Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells
f. US Supply expected to increase by 250,000 bpd
g. China (4th largest producer) - Reserve life fallen from 10 years to 6 years
h. China Supply: Down 7% (300,000 bpd)
i. Saudi Aramco's IPO in 2018. Incentive for Saudis to maintain high oil prices
j. China: SPR reached 51/90 days; 2017 Imports to decrease?
k. Russia: ramping drilling activities in existing brownfields
l. OPEC: Cutting 1.2m bpd; Will they cut more until the IPO of Saudi Aramco?
m. Libya: 700k to 600k from 200k bpd (+0.5m bpd ); Used to produce 1.6m bpd
n. Fracking: Additional 0.5m bpd @ US$60; +1m bpd @ US$70 ?
o. Trump's deregulation may increase supply?
p. How will the new sanctions on Iran affect Oil?
q. Iraq increasing production to 5m bpd from 4.5m bpd
r. More than 30 oil supertankers are sitting off the coast of Singapore
viewtopic.php?f=33&t=7550&start=210
2. Natural Gas - Lower: US$2.96 from US$3.04 from US$2.82. Not vested
a. Support 1.70; Resistance $4.00
b. Heating, Cooking, Transportation (CNG), Ammonia (Fertiliser), Hydrogen (Chemical Industry), Fabrics, Glass, Steel, Plastics Paint etc
c. High: US$13.69 (2008); Low: US$1.61 (March 2015)
d. Natural gas rigs: Dropped from 1,606 (2008) to low of 81. Now at 129
e. LNG are being exported from US to Latin America and AsiaTrade
f. Trade war with Mexico will bring prices down
g. Suppy increasing by 4% pa; Demand growing by 7% pa
h. Trump's deregulation may increase supply?
i. Winter storage declined modestly; Oversupply as winter ends?
viewtopic.php?f=33&t=1863&start=130
3. Gold - Higher. US$1229 from US$1205 from US$1235. Record US$1920.
Vested - Physical Gold Coins
a. Global Gold: 33,000 tons; US - 8000 tons; IMF - 3000 tons; Germany - 3000 tons
b. Electronics, Coins, Central Banks Reserve, Jewellery etc.
c. 250 oz of paper contract for every oz of physical gold holding on Comex?
d. Output fell by 100 metric tons (3%), from 3,150 in 2015 to 3,050 in 2016
e. Demand increasing in Muslim countries as Gold is now a halal investment
f. Indians are supposedly paying 2 times spot due to their cash issues
g. Rising USD & interest rates, would not be good for gold
viewtopic.php?f=33&t=7589&p=202084#p202084
4. Silver - Higher. US$17.41 from US$17.06 from US$18.00. Range High: 49
a. Solar Panels, Data Storage, Antibacterial products, Silver Coins, Jewelery etc
b. Demand: 1.2b ounces in 2015
c. Supply: 0.9b ounces in 2015
d. 35% (7700 metric tons) for Electronics
e. 25% (5500 metric tons) for bullions & coins
f. India imports more Silver than the US
viewtopic.php?f=33&t=7589&p=202084#p202084
5. Coffee (Arabica May 17) - Higher. US$142 from US$141 from US$143
Low: US$135; US$120; High: US$175; US$300 (2011). Not vested
a. 150m Americans drink coffee daily (400m cups)
b. USA imports US$4b of coffee yearly
c. Supply: 152m bags; US$19b trade; Deficit 3.5m bags;
d. Demand 155m bags. By 2030, rising to 200m bags; 5% growth pa
e. Arabica, grown in Brazil (50m bags), is used in premium oulets. At risk from higher temperatures and more resilient pests. 60% of Production
f. Robusta, grown in Vietnam; Used in Instant Coffee; 40% more caffeine
g. What would be the breaking price for coffee ? In 2011, it touched US$300
h. Coffee Rust Disease in Central America lowered supply by 30% over past 3 yrs
i. By 2050, suitable land will halved and demand would have doubled
j. Farmers in Central America replacing coffee with cocoa due to climate change
k. Over 2.25 billion cups of coffee are consumed in the world every day
l. Growth: USA +1.5%; China +5%; India +4%
m. Bumper crops in Brazil, Colombia and Honduras
n. Record Arabica crop 2017? Price +30% in US for 2016
o. Robusta crop down 6% yoy; Price +60% in London for 2016
p. Illy: Rebalancing in 2017
q. Brazil is the biggest coffee producer, producing 1/3 of world’s coffee
r. Europe is the largest importer, accounting for 1/3 of world’s consumption.
s. Coffee is the most traded commodity in the world, following crude oil.
viewtopic.php?f=33&t=3812&start=80
6. Uranium (U3O8 UXC) - Lower. US$24.50 (Mar 13) from US$25.50 (Mar 06) from US$22.25 (Feb 27). Vested in Cameco (CCJ)
a. Breakeven: US$40 per lb
b. High US$136 (2008); $20 (2005) to $136 (2007), 580% rise in two years
c. Global production: 158m lbs pa; 15% of Supply from decommisioned weapons
d. Stockpile: 1b lbs ( till 2022) ; Companies normally store 5-7 years supply
e. Japanese Demand: 13 lbs pa; Starting 21/54 reactors ?
f. Global Demand: 160m lbs pa to 225m lbs pa (2025)
g. Number of Nuclear plants: +8 pa for next 20 years, from 440 to 595
h. 61 new reactors under construction; 149 planned; How many would be built ?
i. China: 35 existing nuclear plants; Currently, building 20; To build 177 more?
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more?
k. 25% long-term supply contracts expiring in 2017-18; 75% between 2017-2025;
l. Russia withdrew from Nuclear deal in Oct 2016; With Trump, would there be another deal or would there be another arms race ?
m. Paris Climate Deal - implemented in November 2016;
n. China's air pollution worsening so nuclear energy maybe expanding
o. Some buyers are locking in long term contracts at US$40, twice the spot rates
p. Kazakhtan reducing supply by 10% (40% of global production)
q. Competition: Natural Gas, Solar, Wind, Wave etc
r. Nuclear power accounts for about 20% of the electricity generated in the U.S
s. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons etc;
viewtopic.php?f=33&t=705&start=80
7. Lithium - not vested
a. Global Lithium Demand: 185 ktpa; In 2025: 500 ktpa; Growth: 11% pa
b. Batteries: 40% demand now rising to 70% in 2025; Growth 45% yoy
c. 81% Global Supply: Chile, Australia and Argentina
d. 83% Global Suppy: Turning Around? Albemarle, SQM, FMC and Sichuan Tianqi
e. Cost of lithium-ion battery fell 65% to around $350 per kwh
f. Vehicle: LIT (not vested)
viewtopic.php?f=33&t=1667&start=20
8. Palladium (Jun 17) - Higher; US$777 from US$747 from US$774
a. Support: US$600; US$500; US$200; Resistance: US$800; US$900;
b. Catalytic Converters, Electronics, Dentistry, Medicine, Hydrogen Purification, Chemicals, Groundwater Treatment, Jewelry and Fuel Cells
c. Auto industry consumes 80% of supply
d. Demand by Auto industry doubled in past 10 years
e. Growth Demand: 3% a year for next 4 years
f. Russia and South Africa produced 3/4 of the world's mined palladium supply.
g. Heading toward its 8th annual supply deficit in 2017; 650,000 ounces in 2016
h. Vehicle: PALL (not vested)
viewtopic.php?f=33&t=7070
9. Zinc; Higher - US$2892 from US$2712 from US$2786
a. Supply Deficit 1.2m tons;
b. High US$4400 (2007); Low $1600 (Jan 2016)
c. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer,
d. Producers: Glencore (GLEN.L), Trevali (TV.TO), Nevsun Resources (NEV)
viewtopic.php?f=33&t=367&start=20
10. Sugar (#11 May 17); Lower - US$18.26 from US$18.29 from US$19.57
a. 5m tonnes deficit
b. Droughts in Thailand, Brazil and India
viewtopic.php?f=33&t=2136&start=150
11. Nickel; Higher - US$10273 from US$9918 from US$10978
a. Used in Construction, Cars, Cookware, Jets, Appliances, Lithium Ion Batteries etc
b. Phillippines: 1/4 of Global Supply; 30 mines closed (1/2 PI Output)
c. Indonesia: Allowed exports but requires 51% ownership by locals
d. Chinese Stainless Steel: +12% yoy
e. Global Demand: +6% pa
f. Battery Demand for Nickel: +20% in 2016
g. Demand for Lithium Ion Batteries: +14% pa
h. Deficit: Rising from 67k tonnes in 2016 to 93k tonnes in 2017
i. Vehicle: JJN (iPath Bloomberg Nickel)
viewtopic.php?f=33&t=969
11. If there's a crash, Commodities would not be spared.
12. The High USD is not good for Commodities
13. Global economy may worsening eg. potential trade wars etc
Equities - Risk-On ( Data as of Saturday every week )
1. US Equities - Higher. 2378 from 2373 last week from 2367 two weeks ago. No trade
viewtopic.php?f=11&t=7643&start=200
2. HK Equities - Higher. 24310 from 23562 from 23553;
Support 23250; Resistance 24650; No trade;
a. Support 21575; Resistance 24100;
viewtopic.php?f=10&t=7470&start=120
3. Shanghai Equities - Higher. 3237 from 3214 from 3218;
Support at 2450; Resistance 3450; No Trade
viewtopic.php?f=10&t=7190&start=210
4. Spore Equities - No Trade.
5. Japan Equities - Lower. 19522 from 19605 from 19469
6. Malaysian Equities - No trade
7. Australian Equities - No Trade.
Medical Marijuana Industry
a. Trump's AG, Jefferson Beauregard Sessions III hates marijuana
b. Trump's Health and Human Services secretary, Tom Price, also hates marijuana
c. The American marijuana industry now employs 100,000 to 150,000 people
d. In comparison, the American coal industry employs only 85,000 Americans
e. Last year, legal marijuana spending was $7b. By 2021, it should reach $22b
f. Both legal and illegal USA sales was $53b last year. Illegal sales was 85% of sales
g. Marijuana has been legalized for recreational use in 8 states including Washington, Colorado, California and the District of Columbia.
viewtopic.php?f=63&t=7650&start=10
Currencies- Mixed
1. USD to JPY - JPY Stronger. 112.69 from 114.77 last week from 114.01 two weeks ago
a. 52 week range is 76 to 126
viewtopic.php?f=32&t=4205&start=180
2. SGD to MYR - SGD Stronger; 3.1638 from 3.1528 from 3.1607
3. AUD to USD - AUD Stronger. 0.7716 from 0.7555 from 0.7605
a. The range is 0.70 (2016) to 1.10 (2011)
viewtopic.php?f=32&t=5256&start=130
4. AUD to SGD - AUD Stronger. 1.0814 from 1.0661 from 1.0712
a. The range is 0.98 (2016) to 1.36 (2012).
b. Am concerned that the spat between the US and China will affect the AUD
5. AUD to MYR - AUD Stronger. 3.4213 from 3.3631 from 3.3858
a. The range is 2.20 (2008) to 3.41 (2017)
b. Waiting to convert more AUD to MYR
6. EUR to USD - EUR Stronger. 1.0747 from 1.0676 from 1.0624
a. Will not be investing in the EUR as I think that it's in a multi-year decline
viewtopic.php?f=32&t=5523&start=100
7. USD to HKD - HKD Stronger. 7.7599 from 7.7628 from 7.7627
a. 52 week range is 7.7452 - 7.8296.
b. Will they remove the peg to the USD during a crisis ?
viewtopic.php?f=32&t=3529&start=40
8. USD to MYR:- MYR Stronger. 4.4340 from 4.4490 from 4.4520
a. 52 Week Range is 3.27 to 4.54.
b. Lowest: 4.885 (1998)
c. Decoupling of the MYR and Oil ?
d. Macquarie: 4.90 (Dec 31, 2017)
e. UOB: 4.35 (July 2017)
viewtopic.php?f=32&t=397&start=60
9. USD to SGD:- SGD Stronger; 1.4015 from 1.4111 from 1.4086
a. High 1.70 (2004); Low 1.20 (2011)
b. Expecting the SGD to drop against the USD
viewtopic.php?f=32&t=136&start=100
10. USD to CNY:- CNY Stronger; 6.8999 from 6.9049 from 6.8953
a. Expecting the CNY to continue dropping against the USD
viewtopic.php?f=32&t=7720&start=90
11. GBP to USD:- GBP Stronger. 1.2399 from 1.2164 from 1.2295
a. Will not be investing in the GBP versus the USD, as I think that it's in a multi-year decline
viewtopic.php?f=32&t=333&start=80
12. GBP to MYR:- GBP Stronger. 5.4978 from 5.4118 from 5.4737
a. Which has more effect ? Article 50 or Malaysian Election ?
13. Dollar Index - USD Weaker. 100.30 from 101.25 from 101.54
viewtopic.php?f=32&t=7616&start=60
Others
1. Sentiment - Complacent ?
2. Headwinds
a. Global
i) Derivatives (US$700t);
ii) Debts (US$225t, 225% GDP);
iii) Corporate Debt (US$50t);
b. China
i) Debts (US$23t)
ii) Debt / GDP = 277%
ii) Corporate Debts (US$18t)
iii) Local Government Debts (US$3t; >30% GDP)
iv) Bad Debts (US$2t)
v) Mortgages: 1/4 Credit; 1/2 New Loans in 2016
c. US
i) Unfunded Debts (US$170t);
ii) Bank Debts (US$60t);
iii) Corporate Debts (US$5.5t);
iv) Oil Bad Debts (US$0.2t /US$2.5t);
v) Household Debts (US$12t);
vi) Auto Debts (US$1t);
vii) Mortgage Debts (US$8t);
viii) Foreigners Holding of US Treasuries (US$6.3t);
ix) Students Loan (US$1.4t, +20% pa, 4.2m people, 40% default);
x) Junk Bonds Maturing (2017-2021) - US$1.5t;
xi) US Feds Leverage (113 to 1);
xii) StockMarket Cap/GDP (200%);
d. Europe
i) NPLs (US$1.3t)
ii) Italian NPLs: 18%; US$0.4t
e. Emerging Markets:
i) US$ Debts (US$10t)
3. Tailwinds - Low Interest Rates, Cash Sidelines (US$50t); QE Programs US$18t - US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t); Negative Yield Bonds (US$4t from US$10t); US Foreign Funds Repatriation (US$2.5t); Cash US Corps (US$1t); Cash Japanese Corp (US$2t); Buybacks, US Household Net Worth (US$90t); EM Consumption;
4. Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
5. Properties
a. Spore Properties
i) Prices declined by 11% since 2013; Sales dropped by half since 2013
ii) About 24,000 private homes are vacant
iii) Developers sold 8,000 homes in 2016 compared to 7400 in 2015;
iv) Supply: 13,000 in 2017; 9300 in 2018; 7300 in 2019
v) The existing stock of unsold homes may take three years to sell
vi) Americans became the 2nd most frequent buyers of high-end homes
vii) More than 800 condo units were resold at a loss in 2016 as economy slows
viii) Prices fell 3% in 2016 for third straight yearly decline
ix) When would they be relaxing the housing curbs ?
x) >80% more homes being auctioned
xi) Unexpected relaxation of the curbs implies market is weaker than expected?
xii) Developers sold 977 units in Feb 2017, compared with a 382 units in Jan 2017
viewtopic.php?f=10&t=7750&start=40
b. Malaysia Properties
i) Knight Frank: Supply of about 44,000 high end condos in KL as of 1H 2016
ii) NAPIC: About 23% of residential & commercial properties from 1Q 2016 unsold
iii) Volume and Value of transactions declined 14% and 11%, in the first 9 mths of 2016
viewtopic.php?f=10&t=4220&start=150
c. China Properties
i) About 4 years supply at Tier 3 & 4 cities
ii) Various new curbs in more than 20 cities
iii) Beijing is + 23.5% yoy
iv) Shanghai is + 31.2% yoy
v) Shenzhen is +36.8% yoy
vi) Guangzhou is +21.1% yoy
vii) Sales grew 25% in first 2 months of 2017 vs Dec 2016′s 11.8%
viii) 40% of smaller cities saw their housing investories drop to < 12 mths
ix) Sales by volume for the first 2 months of 2017, were up 26% yoy vs 34.8% for 2016
x) Sales in value terms grew 25.1 per cent in the first 2 months of 2017 vs 22.5% in 2016, suggesting home prices continue to race ahead.
viewtopic.php?f=10&t=8150&start=30
d. HK Properies
i) Price has surged almost 370% from 2003 to Sep 2015
ii) 18,000 new units completed in 2016. 94,000 units in next 3-4 years (up 40%)
iii) About 19,000 people left HK last year
iv) Margins have decreased to 25% from 40%
v) DB: Prices to drop 11% in 2017
vi) CS: Prices to drop 22% by end 2018
vii) Bocom: Prices to drop 20% to 30%, by end 2017
viii) Centaline: Mainland Chinese made up 16% of buyers during quarter
ix) DTZ: Prices to increase 5-10% by July 1, 2017
x) Citi: Prices to drop 15% in 2017
xi) 34,000 flats in pipeline for 2017
xii) Cushman & Wakefield: Prices to rise 5-10% in 1H 2017
xiii) Annual Supply of 20,000 from 8000%
Xiv) Centaline: Prices to increase 20% by Dec 2019
viewtopic.php?f=10&t=7785&p=202051#p202051
e. London Properties
i) Savills: 9% drop for luxury properties in 2016 and will not rise until 2019
ii) Hard Brexit: 5,000 jobs axed immediately? (1.1m jobs in Financial Services)
iii) London's population @ 8.7m. New households @ 50k pa. Supply 20k pa
iv) CEBR: Property prices in London to fall 6% in 2017
v) Molior: Homes built without buyer secured - 10,829, a 24% rise yoy
vi) Molior: 2 years to sell homes under construction
vii) Rightmove: Decline of 5% by end 2017
viii) Prices have surged about 86% since 2009
ix) Knight Frank: Prices dropped 6% in 2016 and will prime prices will probably be flat for 2017
viewtopic.php?f=11&t=3673&start=70
6. Yield on 10 Year US Treasuries - Lower. 2.50% from 2.58% from 2.48%
a. Low 1.32%; High 2.69%.
b. New regulations on Money Markets decreasing yield for US Treasuries
7. Interest Rates:-
a. Expecting interest rates to rise slowly over next two years
b. About US$9t or about 20% of the world’s bonds now have negative yields
c. US Feds: Three rate hikes in 2017? Four rate hikes in 2018 ?
d, Yield on 2-year German government bonds hit record lows, trading at negative 90 basis points
8. JNK (SPDR Barclays High Yield Bond ETF) - Higher. 36.63 from 36.33 from 37.09
9. Baltic Dry Index - Higher; 1196 from 1086 from 939; Low 290; High 1257; 2330 (2013)
The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Please use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments
Please Note:-
Support the forum button - If you have benefited from the ideas in the forum but have not participated in the discussions, we would appreciate your kind support to defray the expenses of maintaining the forum.
Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.
viewtopic.php?f=26&t=3168
Active Topics - Do you know that there's an "Active Topics" button? It's located on the top left hand corner of the Index Page:-
search.php?search_id=active_topics
Market Timing
As the US markets have not gone anywhere for the past two weeks, the number of bears are starting to grow as well as becoming louder.
Before, we start to sell everything and head for the hills, it may be also useful to hear what some of the bulls are saying:-
Recessions: Since WWII, every U.S. recession has begun with job losses. Today, the economy is adding about 200,000 jobs per month. “Jobs are up, wages are up, corporate earnings are strong, and consumer confidence is up”. “There’s no recession in the offing.”
Financial Crisis: “Banks are healthy, cash reserves are up, bank profits are up.” Financials is the best-performing sector since the election. In short, we “don’t seem to be on the edge” of a financial crisis.
Extreme Valuations and Sentiment: U.S. Stock valuations are “definitely more expensive than average,” but “maybe the stock market deserves a higher [than average] valuation” given rock-bottom interest rates, low energy prices, low inflation, an improving economy and rising corporate profits.
On the sentiment front, the amount of money going into bond funds since the market bottom in 2009 has dwarfed the amount going into stock funds: $1.5 trillion vs. just $256 billion. That’s a sign individual investors still haven’t embraced the bull market.
( You can read more on the above at:- viewtopic.php?f=16&t=5910&start=140 )
In view of the above, isn't it better to have a balanced approach and to listen to both sides of the story, instead of being too pessimistic ?
Being "catiously bullish" may still be the right way to go, until we see a "M" on the charts.
Commodities:- Risk-Off (Data as of Saturday)
1. Oil - Higher. US$48.72 from US$48.39 last week from US$53.20 two weeks ago. Vested in RH Petrogas; Support: US$42
a. Glut 1m bpd - rebalancing in 2017? Supply 98.03m bpd; Demand 98.09m bpd
b. Global Stockpiles: 2b barrels? US has 518m barrels
c. US SPR: 700m barrels; To sell 190m barrels from 2017-2025
d. Iran targeting to export 4m bpd by Mar 2017; Used to have 40m in storage
e. US Oil Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells
f. US Supply expected to increase by 250,000 bpd
g. China (4th largest producer) - Reserve life fallen from 10 years to 6 years
h. China Supply: Down 7% (300,000 bpd)
i. Saudi Aramco's IPO in 2018. Incentive for Saudis to maintain high oil prices
j. China: SPR reached 51/90 days; 2017 Imports to decrease?
k. Russia: ramping drilling activities in existing brownfields
l. OPEC: Cutting 1.2m bpd; Will they cut more until the IPO of Saudi Aramco?
m. Libya: 700k to 600k from 200k bpd (+0.5m bpd ); Used to produce 1.6m bpd
n. Fracking: Additional 0.5m bpd @ US$60; +1m bpd @ US$70 ?
o. Trump's deregulation may increase supply?
p. How will the new sanctions on Iran affect Oil?
q. Iraq increasing production to 5m bpd from 4.5m bpd
r. More than 30 oil supertankers are sitting off the coast of Singapore
viewtopic.php?f=33&t=7550&start=210
2. Natural Gas - Lower: US$2.96 from US$3.04 from US$2.82. Not vested
a. Support 1.70; Resistance $4.00
b. Heating, Cooking, Transportation (CNG), Ammonia (Fertiliser), Hydrogen (Chemical Industry), Fabrics, Glass, Steel, Plastics Paint etc
c. High: US$13.69 (2008); Low: US$1.61 (March 2015)
d. Natural gas rigs: Dropped from 1,606 (2008) to low of 81. Now at 129
e. LNG are being exported from US to Latin America and AsiaTrade
f. Trade war with Mexico will bring prices down
g. Suppy increasing by 4% pa; Demand growing by 7% pa
h. Trump's deregulation may increase supply?
i. Winter storage declined modestly; Oversupply as winter ends?
viewtopic.php?f=33&t=1863&start=130
3. Gold - Higher. US$1229 from US$1205 from US$1235. Record US$1920.
Vested - Physical Gold Coins
a. Global Gold: 33,000 tons; US - 8000 tons; IMF - 3000 tons; Germany - 3000 tons
b. Electronics, Coins, Central Banks Reserve, Jewellery etc.
c. 250 oz of paper contract for every oz of physical gold holding on Comex?
d. Output fell by 100 metric tons (3%), from 3,150 in 2015 to 3,050 in 2016
e. Demand increasing in Muslim countries as Gold is now a halal investment
f. Indians are supposedly paying 2 times spot due to their cash issues
g. Rising USD & interest rates, would not be good for gold
viewtopic.php?f=33&t=7589&p=202084#p202084
4. Silver - Higher. US$17.41 from US$17.06 from US$18.00. Range High: 49
a. Solar Panels, Data Storage, Antibacterial products, Silver Coins, Jewelery etc
b. Demand: 1.2b ounces in 2015
c. Supply: 0.9b ounces in 2015
d. 35% (7700 metric tons) for Electronics
e. 25% (5500 metric tons) for bullions & coins
f. India imports more Silver than the US
viewtopic.php?f=33&t=7589&p=202084#p202084
5. Coffee (Arabica May 17) - Higher. US$142 from US$141 from US$143
Low: US$135; US$120; High: US$175; US$300 (2011). Not vested
a. 150m Americans drink coffee daily (400m cups)
b. USA imports US$4b of coffee yearly
c. Supply: 152m bags; US$19b trade; Deficit 3.5m bags;
d. Demand 155m bags. By 2030, rising to 200m bags; 5% growth pa
e. Arabica, grown in Brazil (50m bags), is used in premium oulets. At risk from higher temperatures and more resilient pests. 60% of Production
f. Robusta, grown in Vietnam; Used in Instant Coffee; 40% more caffeine
g. What would be the breaking price for coffee ? In 2011, it touched US$300
h. Coffee Rust Disease in Central America lowered supply by 30% over past 3 yrs
i. By 2050, suitable land will halved and demand would have doubled
j. Farmers in Central America replacing coffee with cocoa due to climate change
k. Over 2.25 billion cups of coffee are consumed in the world every day
l. Growth: USA +1.5%; China +5%; India +4%
m. Bumper crops in Brazil, Colombia and Honduras
n. Record Arabica crop 2017? Price +30% in US for 2016
o. Robusta crop down 6% yoy; Price +60% in London for 2016
p. Illy: Rebalancing in 2017
q. Brazil is the biggest coffee producer, producing 1/3 of world’s coffee
r. Europe is the largest importer, accounting for 1/3 of world’s consumption.
s. Coffee is the most traded commodity in the world, following crude oil.
viewtopic.php?f=33&t=3812&start=80
6. Uranium (U3O8 UXC) - Lower. US$24.50 (Mar 13) from US$25.50 (Mar 06) from US$22.25 (Feb 27). Vested in Cameco (CCJ)
a. Breakeven: US$40 per lb
b. High US$136 (2008); $20 (2005) to $136 (2007), 580% rise in two years
c. Global production: 158m lbs pa; 15% of Supply from decommisioned weapons
d. Stockpile: 1b lbs ( till 2022) ; Companies normally store 5-7 years supply
e. Japanese Demand: 13 lbs pa; Starting 21/54 reactors ?
f. Global Demand: 160m lbs pa to 225m lbs pa (2025)
g. Number of Nuclear plants: +8 pa for next 20 years, from 440 to 595
h. 61 new reactors under construction; 149 planned; How many would be built ?
i. China: 35 existing nuclear plants; Currently, building 20; To build 177 more?
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more?
k. 25% long-term supply contracts expiring in 2017-18; 75% between 2017-2025;
l. Russia withdrew from Nuclear deal in Oct 2016; With Trump, would there be another deal or would there be another arms race ?
m. Paris Climate Deal - implemented in November 2016;
n. China's air pollution worsening so nuclear energy maybe expanding
o. Some buyers are locking in long term contracts at US$40, twice the spot rates
p. Kazakhtan reducing supply by 10% (40% of global production)
q. Competition: Natural Gas, Solar, Wind, Wave etc
r. Nuclear power accounts for about 20% of the electricity generated in the U.S
s. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons etc;
viewtopic.php?f=33&t=705&start=80
7. Lithium - not vested
a. Global Lithium Demand: 185 ktpa; In 2025: 500 ktpa; Growth: 11% pa
b. Batteries: 40% demand now rising to 70% in 2025; Growth 45% yoy
c. 81% Global Supply: Chile, Australia and Argentina
d. 83% Global Suppy: Turning Around? Albemarle, SQM, FMC and Sichuan Tianqi
e. Cost of lithium-ion battery fell 65% to around $350 per kwh
f. Vehicle: LIT (not vested)
viewtopic.php?f=33&t=1667&start=20
8. Palladium (Jun 17) - Higher; US$777 from US$747 from US$774
a. Support: US$600; US$500; US$200; Resistance: US$800; US$900;
b. Catalytic Converters, Electronics, Dentistry, Medicine, Hydrogen Purification, Chemicals, Groundwater Treatment, Jewelry and Fuel Cells
c. Auto industry consumes 80% of supply
d. Demand by Auto industry doubled in past 10 years
e. Growth Demand: 3% a year for next 4 years
f. Russia and South Africa produced 3/4 of the world's mined palladium supply.
g. Heading toward its 8th annual supply deficit in 2017; 650,000 ounces in 2016
h. Vehicle: PALL (not vested)
viewtopic.php?f=33&t=7070
9. Zinc; Higher - US$2892 from US$2712 from US$2786
a. Supply Deficit 1.2m tons;
b. High US$4400 (2007); Low $1600 (Jan 2016)
c. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer,
d. Producers: Glencore (GLEN.L), Trevali (TV.TO), Nevsun Resources (NEV)
viewtopic.php?f=33&t=367&start=20
10. Sugar (#11 May 17); Lower - US$18.26 from US$18.29 from US$19.57
a. 5m tonnes deficit
b. Droughts in Thailand, Brazil and India
viewtopic.php?f=33&t=2136&start=150
11. Nickel; Higher - US$10273 from US$9918 from US$10978
a. Used in Construction, Cars, Cookware, Jets, Appliances, Lithium Ion Batteries etc
b. Phillippines: 1/4 of Global Supply; 30 mines closed (1/2 PI Output)
c. Indonesia: Allowed exports but requires 51% ownership by locals
d. Chinese Stainless Steel: +12% yoy
e. Global Demand: +6% pa
f. Battery Demand for Nickel: +20% in 2016
g. Demand for Lithium Ion Batteries: +14% pa
h. Deficit: Rising from 67k tonnes in 2016 to 93k tonnes in 2017
i. Vehicle: JJN (iPath Bloomberg Nickel)
viewtopic.php?f=33&t=969
11. If there's a crash, Commodities would not be spared.
12. The High USD is not good for Commodities
13. Global economy may worsening eg. potential trade wars etc
Equities - Risk-On ( Data as of Saturday every week )
1. US Equities - Higher. 2378 from 2373 last week from 2367 two weeks ago. No trade
viewtopic.php?f=11&t=7643&start=200
2. HK Equities - Higher. 24310 from 23562 from 23553;
Support 23250; Resistance 24650; No trade;
a. Support 21575; Resistance 24100;
viewtopic.php?f=10&t=7470&start=120
3. Shanghai Equities - Higher. 3237 from 3214 from 3218;
Support at 2450; Resistance 3450; No Trade
viewtopic.php?f=10&t=7190&start=210
4. Spore Equities - No Trade.
5. Japan Equities - Lower. 19522 from 19605 from 19469
6. Malaysian Equities - No trade
7. Australian Equities - No Trade.
Medical Marijuana Industry
a. Trump's AG, Jefferson Beauregard Sessions III hates marijuana
b. Trump's Health and Human Services secretary, Tom Price, also hates marijuana
c. The American marijuana industry now employs 100,000 to 150,000 people
d. In comparison, the American coal industry employs only 85,000 Americans
e. Last year, legal marijuana spending was $7b. By 2021, it should reach $22b
f. Both legal and illegal USA sales was $53b last year. Illegal sales was 85% of sales
g. Marijuana has been legalized for recreational use in 8 states including Washington, Colorado, California and the District of Columbia.
viewtopic.php?f=63&t=7650&start=10
Currencies- Mixed
1. USD to JPY - JPY Stronger. 112.69 from 114.77 last week from 114.01 two weeks ago
a. 52 week range is 76 to 126
viewtopic.php?f=32&t=4205&start=180
2. SGD to MYR - SGD Stronger; 3.1638 from 3.1528 from 3.1607
3. AUD to USD - AUD Stronger. 0.7716 from 0.7555 from 0.7605
a. The range is 0.70 (2016) to 1.10 (2011)
viewtopic.php?f=32&t=5256&start=130
4. AUD to SGD - AUD Stronger. 1.0814 from 1.0661 from 1.0712
a. The range is 0.98 (2016) to 1.36 (2012).
b. Am concerned that the spat between the US and China will affect the AUD
5. AUD to MYR - AUD Stronger. 3.4213 from 3.3631 from 3.3858
a. The range is 2.20 (2008) to 3.41 (2017)
b. Waiting to convert more AUD to MYR
6. EUR to USD - EUR Stronger. 1.0747 from 1.0676 from 1.0624
a. Will not be investing in the EUR as I think that it's in a multi-year decline
viewtopic.php?f=32&t=5523&start=100
7. USD to HKD - HKD Stronger. 7.7599 from 7.7628 from 7.7627
a. 52 week range is 7.7452 - 7.8296.
b. Will they remove the peg to the USD during a crisis ?
viewtopic.php?f=32&t=3529&start=40
8. USD to MYR:- MYR Stronger. 4.4340 from 4.4490 from 4.4520
a. 52 Week Range is 3.27 to 4.54.
b. Lowest: 4.885 (1998)
c. Decoupling of the MYR and Oil ?
d. Macquarie: 4.90 (Dec 31, 2017)
e. UOB: 4.35 (July 2017)
viewtopic.php?f=32&t=397&start=60
9. USD to SGD:- SGD Stronger; 1.4015 from 1.4111 from 1.4086
a. High 1.70 (2004); Low 1.20 (2011)
b. Expecting the SGD to drop against the USD
viewtopic.php?f=32&t=136&start=100
10. USD to CNY:- CNY Stronger; 6.8999 from 6.9049 from 6.8953
a. Expecting the CNY to continue dropping against the USD
viewtopic.php?f=32&t=7720&start=90
11. GBP to USD:- GBP Stronger. 1.2399 from 1.2164 from 1.2295
a. Will not be investing in the GBP versus the USD, as I think that it's in a multi-year decline
viewtopic.php?f=32&t=333&start=80
12. GBP to MYR:- GBP Stronger. 5.4978 from 5.4118 from 5.4737
a. Which has more effect ? Article 50 or Malaysian Election ?
13. Dollar Index - USD Weaker. 100.30 from 101.25 from 101.54
viewtopic.php?f=32&t=7616&start=60
Others
1. Sentiment - Complacent ?
2. Headwinds
a. Global
i) Derivatives (US$700t);
ii) Debts (US$225t, 225% GDP);
iii) Corporate Debt (US$50t);
b. China
i) Debts (US$23t)
ii) Debt / GDP = 277%
ii) Corporate Debts (US$18t)
iii) Local Government Debts (US$3t; >30% GDP)
iv) Bad Debts (US$2t)
v) Mortgages: 1/4 Credit; 1/2 New Loans in 2016
c. US
i) Unfunded Debts (US$170t);
ii) Bank Debts (US$60t);
iii) Corporate Debts (US$5.5t);
iv) Oil Bad Debts (US$0.2t /US$2.5t);
v) Household Debts (US$12t);
vi) Auto Debts (US$1t);
vii) Mortgage Debts (US$8t);
viii) Foreigners Holding of US Treasuries (US$6.3t);
ix) Students Loan (US$1.4t, +20% pa, 4.2m people, 40% default);
x) Junk Bonds Maturing (2017-2021) - US$1.5t;
xi) US Feds Leverage (113 to 1);
xii) StockMarket Cap/GDP (200%);
d. Europe
i) NPLs (US$1.3t)
ii) Italian NPLs: 18%; US$0.4t
e. Emerging Markets:
i) US$ Debts (US$10t)
3. Tailwinds - Low Interest Rates, Cash Sidelines (US$50t); QE Programs US$18t - US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t); Negative Yield Bonds (US$4t from US$10t); US Foreign Funds Repatriation (US$2.5t); Cash US Corps (US$1t); Cash Japanese Corp (US$2t); Buybacks, US Household Net Worth (US$90t); EM Consumption;
4. Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
5. Properties
a. Spore Properties
i) Prices declined by 11% since 2013; Sales dropped by half since 2013
ii) About 24,000 private homes are vacant
iii) Developers sold 8,000 homes in 2016 compared to 7400 in 2015;
iv) Supply: 13,000 in 2017; 9300 in 2018; 7300 in 2019
v) The existing stock of unsold homes may take three years to sell
vi) Americans became the 2nd most frequent buyers of high-end homes
vii) More than 800 condo units were resold at a loss in 2016 as economy slows
viii) Prices fell 3% in 2016 for third straight yearly decline
ix) When would they be relaxing the housing curbs ?
x) >80% more homes being auctioned
xi) Unexpected relaxation of the curbs implies market is weaker than expected?
xii) Developers sold 977 units in Feb 2017, compared with a 382 units in Jan 2017
viewtopic.php?f=10&t=7750&start=40
b. Malaysia Properties
i) Knight Frank: Supply of about 44,000 high end condos in KL as of 1H 2016
ii) NAPIC: About 23% of residential & commercial properties from 1Q 2016 unsold
iii) Volume and Value of transactions declined 14% and 11%, in the first 9 mths of 2016
viewtopic.php?f=10&t=4220&start=150
c. China Properties
i) About 4 years supply at Tier 3 & 4 cities
ii) Various new curbs in more than 20 cities
iii) Beijing is + 23.5% yoy
iv) Shanghai is + 31.2% yoy
v) Shenzhen is +36.8% yoy
vi) Guangzhou is +21.1% yoy
vii) Sales grew 25% in first 2 months of 2017 vs Dec 2016′s 11.8%
viii) 40% of smaller cities saw their housing investories drop to < 12 mths
ix) Sales by volume for the first 2 months of 2017, were up 26% yoy vs 34.8% for 2016
x) Sales in value terms grew 25.1 per cent in the first 2 months of 2017 vs 22.5% in 2016, suggesting home prices continue to race ahead.
viewtopic.php?f=10&t=8150&start=30
d. HK Properies
i) Price has surged almost 370% from 2003 to Sep 2015
ii) 18,000 new units completed in 2016. 94,000 units in next 3-4 years (up 40%)
iii) About 19,000 people left HK last year
iv) Margins have decreased to 25% from 40%
v) DB: Prices to drop 11% in 2017
vi) CS: Prices to drop 22% by end 2018
vii) Bocom: Prices to drop 20% to 30%, by end 2017
viii) Centaline: Mainland Chinese made up 16% of buyers during quarter
ix) DTZ: Prices to increase 5-10% by July 1, 2017
x) Citi: Prices to drop 15% in 2017
xi) 34,000 flats in pipeline for 2017
xii) Cushman & Wakefield: Prices to rise 5-10% in 1H 2017
xiii) Annual Supply of 20,000 from 8000%
Xiv) Centaline: Prices to increase 20% by Dec 2019
viewtopic.php?f=10&t=7785&p=202051#p202051
e. London Properties
i) Savills: 9% drop for luxury properties in 2016 and will not rise until 2019
ii) Hard Brexit: 5,000 jobs axed immediately? (1.1m jobs in Financial Services)
iii) London's population @ 8.7m. New households @ 50k pa. Supply 20k pa
iv) CEBR: Property prices in London to fall 6% in 2017
v) Molior: Homes built without buyer secured - 10,829, a 24% rise yoy
vi) Molior: 2 years to sell homes under construction
vii) Rightmove: Decline of 5% by end 2017
viii) Prices have surged about 86% since 2009
ix) Knight Frank: Prices dropped 6% in 2016 and will prime prices will probably be flat for 2017
viewtopic.php?f=11&t=3673&start=70
6. Yield on 10 Year US Treasuries - Lower. 2.50% from 2.58% from 2.48%
a. Low 1.32%; High 2.69%.
b. New regulations on Money Markets decreasing yield for US Treasuries
7. Interest Rates:-
a. Expecting interest rates to rise slowly over next two years
b. About US$9t or about 20% of the world’s bonds now have negative yields
c. US Feds: Three rate hikes in 2017? Four rate hikes in 2018 ?
d, Yield on 2-year German government bonds hit record lows, trading at negative 90 basis points
8. JNK (SPDR Barclays High Yield Bond ETF) - Higher. 36.63 from 36.33 from 37.09
9. Baltic Dry Index - Higher; 1196 from 1086 from 939; Low 290; High 1257; 2330 (2013)
The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Please use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments
Please Note:-
Support the forum button - If you have benefited from the ideas in the forum but have not participated in the discussions, we would appreciate your kind support to defray the expenses of maintaining the forum.
Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.
viewtopic.php?f=26&t=3168
Active Topics - Do you know that there's an "Active Topics" button? It's located on the top left hand corner of the Index Page:-
search.php?search_id=active_topics
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It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston - Billionaire Boss
- Posts: 111129
- Joined: Wed May 07, 2008 9:28 am
Re: Winston's Investment Ideas 04 (Oct 15 - Dec 17)
by winston » Sun Mar 26, 2017 5:58 am
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TOL as of March 26, 2017
Fading of Trump's Reflation Trade?
Trump's Healthcare Bill has been defeated.
Does that now mean that all his other programs, including Tax Reform, Deregulation, Infrastructure Program, Defence Spending etc, are also facing Execution Risk ?
Intuitively, I think that it cannot be smooth sailing for all his programs. He does not have the required votes in Congress and even if they do get passed at Congress, he would be facing another set of obstacles in the Senate.
For anyone that has managed an enterprise before, you will know that it's not always smooth sailing and that you always need extra time to execute your plans.
It's the naive "experts" that have never manage an enterprise before, that thinks that things will always go in a straight line.
These naive "experts" includes those inexperienced MBAs that hide behind the names of the Consulting firms and Investment Banks.
Therefore, is that a surprise when you see the market rocketing 10% since the US election on just hope, that Trump would be able to deliver on his rhetoric?
And now, we are seeing a correction, as these same "experts" now suddenly realised that there could be some execution risk.
A 50% retracement of the Trump Rally ie. a 5% correction, is not unreasonable. Anything more than that would depends on the catalyst at that point in time.
In view of the above, I have started to buy some VXX as well as the SCO (Inverse Oil 2x). I may pyramid up on these positions depending on how the market reacts next week. If it does not go as planned, I may cut my losses and wait for the "M" to appear first on the charts.
I need to also remind myself that it"s Window Dressing time and that new money would also be arriving again from the new month of April.
Commodities:- Risk-Off (Data as of Saturday)
1. Oil - Lower. US$48.14 from US$48.72 last week from US$48.39 two weeks ago. Vested in SCO (Inverse 2x) and RH Petrogas; Support: US$42
a. Glut 1m bpd - rebalancing in 2017? Supply 98.03m bpd; Demand 98.09m bpd
b. Global Stockpiles: 2.5b barrels? US has 533m barrels
c. US SPR: 700m barrels; To sell 190m barrels from 2017-2025
d. Iran targeting to export 4m bpd by Mar 2017; Used to have 40m in storage
e. US Oil Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells
f. US Supply expected to increase by 250,000 bpd
g. China (4th largest producer) - Reserve life fallen from 10 years to 6 years
h. China Supply: Down 7% (300,000 bpd)
i. Saudi Aramco's IPO in 2018. Incentive for Saudis to maintain high oil prices
j. China: SPR reached 51/90 days; 2017 Imports to decrease?
k. Russia: ramping drilling activities in existing brownfields
l. OPEC: Cutting 1.8m bpd; Will they cut more until the IPO of Saudi Aramco?
m. Libya: 700k to 600k from 200k bpd (+0.5m bpd ); Used to produce 1.6m bpd
n. Fracking: +0.5m bpd @ US$60; +1m bpd @ US$70; +0.4m bpd 2017; +1m bpd 2018
o. Trump's deregulation may increase supply?
p. How will the new sanctions on Iran affect Oil? War with Iran?
q. Iraq increasing production to 5m bpd from 4.5m bpd
r. More than 30 oil supertankers are sitting off the coast of Singapore
s. US imports 8m bpd (Total Demand of India and Japan combined)
t. Summer driving will start soon
viewtopic.php?f=33&t=7550&start=210
2. Natural Gas - Higher: US$3.08 from US$2.96 from US$3.04. Not vested
a. Support 1.70; Resistance $4.00
b. Heating, Cooking, Transportation (CNG), Ammonia (Fertiliser), Hydrogen (Chemical Industry), Fabrics, Glass, Steel, Plastics Paint etc
c. High: US$13.69 (2008); Low: US$1.61 (March 2015)
d. Natural gas rigs: Dropped from 1,606 (2008) to low of 81. Now at 129
e. LNG are being exported from US to Latin America and AsiaTrade
f. Trade war with Mexico will bring prices down
g. Suppy increasing by 4% pa; Demand growing by 7% pa
h. Trump's deregulation may increase supply?
i. Winter storage declined modestly; Oversupply as winter ends?
viewtopic.php?f=33&t=1863&start=130
3. Gold - Higher. US$1243 from US$1229 from US$1205. Record US$1920.
Vested - Physical Gold Coins
a. Global Gold: 33,000 tons; US - 8000 tons; IMF - 3000 tons; Germany - 3000 tons
b. Electronics, Coins, Central Banks Reserve, Jewellery etc.
c. 250 oz of paper contract for every oz of physical gold holding on Comex?
d. Output fell by 100 metric tons (3%), from 3,150 in 2015 to 3,050 in 2016
e. Demand increasing in Muslim countries as Gold is now a halal investment
f. Indians are supposedly paying 2 times spot due to their cash issues
g. Rising USD & interest rates, would not be good for gold
viewtopic.php?f=33&t=7589&p=202084#p202084
4. Silver - Higher. US$17.78 from US$17.41 from US$17.06. Range High: 49
a. Solar Panels, Data Storage, Antibacterial products, Silver Coins, Jewelery etc
b. Demand: 1.2b ounces in 2015
c. Supply: 0.9b ounces in 2015
d. 35% (7700 metric tons) for Electronics
e. 25% (5500 metric tons) for Bullions & Coins
f. India imports more Silver than the US
g. JPM has 67m ounces
viewtopic.php?f=33&t=7589&p=202084#p202084
5. Platinum - US$965
a. Use: Catalytic Converters (43%); Jewelery (35%)
b. Rare: 170 metric tons (Gold 3100 Metric tons)
c. Demand > Supply: 120,000 ounces (5th year of Deficit )
viewtopic.php?f=33&t=8172&start=120
6. Coffee (Arabica May 17) - Lower. US$138 from US$142 from US$141
Low: US$135; US$120; High: US$175; US$300 (2011). Not vested
a. 150m Americans drink coffee daily (400m cups)
b. USA imports US$4b of coffee yearly
c. Supply: 152m bags; US$19b trade; Deficit 3.5m bags;
d. Demand 155m bags. By 2030, rising to 200m bags; 5% growth pa
e. Arabica, grown in Brazil (50m bags), is used in premium oulets. At risk from higher temperatures and more resilient pests. 60% of Production
f. Robusta, grown in Vietnam; Used in Instant Coffee; 40% more caffeine
g. What would be the breaking price for coffee ? In 2011, it touched US$300
h. Coffee Rust Disease in Central America lowered supply by 30% over past 3 yrs
i. By 2050, suitable land will halved and demand would have doubled
j. Farmers in Central America replacing coffee with cocoa due to climate change
k. Over 2.25 billion cups of coffee are consumed in the world every day
l. Growth: USA +1.5%; China +5%; India +4%
m. Bumper crops in Brazil, Colombia and Honduras
n. Record Arabica crop 2017? Price +30% in US for 2016
o. Robusta crop down 6% yoy; Price +60% in London for 2016
p. Illy: Rebalancing in 2017
q. Brazil is the biggest coffee producer, producing 1/3 of world’s coffee
r. Europe is the largest importer, accounting for 1/3 of world’s consumption.
s. Coffee is the most traded commodity in the world, following crude oil.
viewtopic.php?f=33&t=3812&start=80
7. Uranium (U3O8 UXC) - Lower. US$25.50 (mar 20) from US$24.50 (Mar 13) from US$25.50 (Mar 06). Vested in Cameco (CCJ)
a. Breakeven: US$40 per lb
b. High US$136 (2008); $20 (2005) to $136 (2007), 580% rise in two years
c. Global production: 158m lbs pa; 15% of Supply from decommisioned weapons
d. Stockpile: 1b lbs ( till 2022) ; Companies normally store 5-7 years supply
e. Japanese Demand: 13 lbs pa; Starting 21/54 reactors ?
f. Global Demand: 160m lbs pa to 225m lbs pa (2025)
g. Number of Nuclear plants: +8 pa for next 20 years, from 440 to 595
h. 61 new reactors under construction; 149 planned; How many would be built ?
i. China: 35 existing nuclear plants; Currently, building 20; To build 177 more?
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more?
k. 25% long-term supply contracts expiring in 2017-18; 75% between 2017-2025;
l. Russia withdrew from Nuclear deal in Oct 2016; With Trump, would there be another deal or would there be another arms race ?
m. Paris Climate Deal - implemented in November 2016;
n. China's air pollution worsening so nuclear energy maybe expanding
o. Some buyers are locking in long term contracts at US$40, twice the spot rates
p. Kazakhtan reducing supply by 10% (40% of global production)
q. Competition: Natural Gas, Solar, Wind, Wave etc
r. Nuclear power accounts for about 20% of the electricity generated in the U.S
s. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons etc;
viewtopic.php?f=33&t=705&start=80
8. Lithium - not vested
a. Global Lithium Demand: 185 ktpa; In 2025: 500 ktpa; Growth: 11% pa
b. Batteries: 40% demand now rising to 70% in 2025; Growth 45% yoy
c. 81% Global Supply: Chile, Australia and Argentina
d. 83% Global Suppy: Turning Around? Albemarle, SQM, FMC and Sichuan Tianqi
e. Cost of lithium-ion battery fell 65% to around $350 per kwh
f. Vehicle: LIT (not vested)
viewtopic.php?f=33&t=1667&start=20
9. Palladium (Jun 17) - Higher; US$809 from US$777 from US$747
a. Support: US$600; US$500; US$200; Resistance: US$800; US$900;
b. Catalytic Converters, Electronics, Dentistry, Medicine, Hydrogen Purification, Chemicals, Groundwater Treatment, Jewelry and Fuel Cells
c. Auto industry consumes 80% of supply
d. Demand by Auto industry doubled in past 10 years
e. Growth Demand: 3% a year for next 4 years
f. Russia and South Africa produced 3/4 of the world's mined palladium supply.
g. Heading toward its 8th annual supply deficit in 2017; 650,000 ounces in 2016
h. Vehicle: PALL (not vested)
viewtopic.php?f=33&t=7070
10. Zinc; Lower - US$2836 from US$2892 from US$2712
a. Supply Deficit 1.2m tons;
b. High US$4400 (2007); Low $1600 (Jan 2016)
c. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer,
d. Producers: Glencore (GLEN.L), Trevali (TV.TO), Nevsun Resources (NEV)
viewtopic.php?f=33&t=367&start=20
11. Sugar (#11 May 17); Lower - US$17.77 from US$18.26 from US$18.29
a. 5m tonnes deficit
b. Droughts in Thailand, Brazil and India
viewtopic.php?f=33&t=2136&start=150
12. Nickel; Lower - US$9880 from US$10273 from US$9918
a. Used in Construction, Cars, Cookware, Jets, Appliances, Lithium Ion Batteries etc
b. Phillippines: 1/4 of Global Supply; 30 mines closed (1/2 PI Output)
c. Indonesia: Allowed exports but requires 51% ownership by locals
d. Chinese Stainless Steel: +12% yoy
e. Global Demand: +6% pa
f. Battery Demand for Nickel: +20% in 2016
g. Demand for Lithium Ion Batteries: +14% pa
h. Deficit: Rising from 67k tonnes in 2016 to 93k tonnes in 2017
i. Vehicle: JJN (iPath Bloomberg Nickel)
viewtopic.php?f=33&t=969
13. If there's a crash, Commodities would not be spared.
14. The High USD is not good for Commodities
15. Global economy may worsening eg. potential trade wars etc
Equities - Risk-On ( Data as of Saturday every week )
1. US Equities - Lower. 2344 from 2378 last week from 2373 two weeks ago.
Bought VXX and SCO (Inverse Oil 2x);
viewtopic.php?f=11&t=7643&start=200
2. HK Equities - Higher. 24358 from 24310 from 23562;
Support 23250; Resistance 24650; No trade;
a. Support 21575; Resistance 24100;
viewtopic.php?f=10&t=7470&start=120
3. Shanghai Equities - Higher. 3269 from 3237 from 3214;
Support at 2450; Resistance 3450; No trade
viewtopic.php?f=10&t=7190&start=210
4. Spore Equities - No Trade.
5. Japan Equities - Lower. 19263 from 19522 from 19605
6. Malaysian Equities - Traded OSK
7. Australian Equities - No Trade.
Medical Marijuana Industry
a. Trump's AG, Jefferson Beauregard Sessions III hates marijuana
b. Trump's Health and Human Services secretary, Tom Price, also hates marijuana
c. The American marijuana industry now employs 100,000 to 150,000 people
d. In comparison, the American coal industry employs only 85,000 Americans
e. Last year, legal marijuana spending was $7b. By 2021, it should reach $22b
f. Both legal and illegal USA sales was $53b last year. Illegal sales was 85% of sales
g. Marijuana has been legalized for recreational use in 8 states including Washington, Colorado, California and the District of Columbia.
viewtopic.php?f=63&t=7650&start=10
Currencies- Mixed
1. USD to JPY - JPY Stronger. 111.33 from 112.69 last week from 114.77 two weeks ago
a. 52 week range is 76 to 126
viewtopic.php?f=32&t=4205&start=180
2. SGD to MYR - SGD Weaker; 3.1631 from 3.1638 from 3.1528
3. AUD to USD - AUD Weaker. 0.7634 from 0.7716 from 0.7555
a. The range is 0.70 (2016) to 1.10 (2011)
viewtopic.php?f=32&t=5256&start=130
4. AUD to SGD - AUD Weaker. 1.0674 from 1.0814 from 1.0661
a. The range is 0.98 (2016) to 1.36 (2012).
b. Am concerned that the spat between the US and China will affect the AUD
5. AUD to MYR - AUD Weaker. 3.3763 from 3.4213 from 3.3631
a. The range is 2.20 (2008) to 3.41 (2017)
b. Waiting to convert more AUD to MYR
6. EUR to USD - EUR Stronger. 1.0801 from 1.0747 from 1.0676
a. Will not be investing in the EUR as I think that it's in a multi-year decline
viewtopic.php?f=32&t=5523&start=100
7. USD to HKD - HKD Weaker. 7.7658 from 7.7599 from 7.7628
a. 52 week range is 7.7452 - 7.8296.
b. Will they remove the peg to the USD during a crisis ?
viewtopic.php?f=32&t=3529&start=40
8. USD to MYR:- MYR Stronger. 4.4230 from 4.4340 from 4.4490
a. 52 Week Range is 3.27 to 4.54.
b. Lowest: 4.885 (1998)
c. Decoupling of the MYR and Oil ?
d. Macquarie: 4.90 (Dec 31, 2017)
e. UOB: 4.35 (July 2017)
viewtopic.php?f=32&t=397&start=60
9. USD to SGD:- SGD Stronger; 1.3983 from 1.4015 from 1.4111
a. High 1.70 (2004); Low 1.20 (2011)
b. Expecting the SGD to drop against the USD
viewtopic.php?f=32&t=136&start=100
10. USD to CNY:- CNY Stronger; 6.8802 from 6.8999 from 6.9049
a. Expecting the CNY to continue dropping against the USD
viewtopic.php?f=32&t=7720&start=90
11. GBP to USD:- GBP Stronger. 1.2472 from 1.2399 from 1.2164
a. Will not be investing in the GBP versus the USD, as I think that it's in a multi-year decline
viewtopic.php?f=32&t=333&start=80
12. GBP to MYR:- GBP Stronger. 5.5164 from 5.4978 from 5.4118
a. Which has more effect ? Article 50 or Malaysian Election ?
13. Dollar Index - USD Weaker. 99.63 from 100.30 from 101.25
viewtopic.php?f=32&t=7616&start=60
Others
1. Sentiment - Complacent ?
2. Headwinds
a. Global
i) Derivatives (US$700t);
ii) Debts (US$225t, 225% GDP);
iii) Corporate Debt (US$50t);
iv) Institutional Investors (US$0.5t)
b. China
i) Debts (US$23t)
ii) Debt / GDP = 277%
ii) Corporate Debts (US$18t)
iii) Local Government Debts (US$3t; >30% GDP)
iv) Bad Debts (US$2t)
v) Mortgages: 1/4 Credit; 1/2 New Loans in 2016
c. US
i) Unfunded Debts (US$170t);
ii) Bank Debts (US$60t);
iii) Corporate Debts (US$5.5t);
iv) Oil Bad Debts (US$0.2t /US$2.5t);
v) Household Debts (US$12t);
vi) Auto Debts (US$1t);
vii) Mortgage Debts (US$8t);
viii) Foreigners Holding of US Treasuries (US$6.3t);
ix) Students Loan (US$1.4t, +20% pa, 4.2m people, 40% default);
x) Junk Bonds Maturing (2017-2021) - US$1.5t;
xi) US Feds Leverage (113 to 1);
xii) StockMarket Cap/GDP (200%);
d. Europe
i) NPLs (US$1.3t)
ii) Italian NPLs: 18%; US$0.4t
e. Emerging Markets:
i) US$ Debts (US$10t)
3. Tailwinds - Low Interest Rates, Cash Sidelines (US$50t); QE Programs US$18t - US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t); Negative Yield Bonds (US$4t from US$10t); US Foreign Funds Repatriation (US$2.5t); Cash US Corps (US$1t); Cash Japanese Corp (US$2t); Buybacks, US Household Net Worth (US$90t); EM Consumption;
4. Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
5. Properties
a. Spore Properties
i) Prices declined by 11% since 2013; Sales dropped by half since 2013
ii) About 24,000 private homes are vacant
iii) Developers sold 8,000 homes in 2016 compared to 7400 in 2015;
iv) Supply: 13,000 in 2017; 9300 in 2018; 7300 in 2019
v) The existing stock of unsold homes may take three years to sell
vi) Americans became the 2nd most frequent buyers of high-end homes
vii) More than 800 condo units were resold at a loss in 2016 as economy slows
viii) Prices fell 3% in 2016 for third straight yearly decline
ix) When would they be relaxing the housing curbs ?
x) >80% more homes being auctioned
xi) Unexpected relaxation of the curbs implies market is weaker than expected?
xii) Developers sold 977 units in Feb 2017, compared with a 382 units in Jan 2017
viewtopic.php?f=10&t=7750&start=40
b. Malaysia Properties
i) Knight Frank: Supply of about 44,000 high end condos in KL as of 1H 2016
ii) NAPIC: About 23% of residential & commercial properties from 1Q 2016 unsold
iii) Volume and Value of transactions declined 14% and 11%, in the first 9 mths of 2016
iv) Prices moderated for 4 years, from +11.8% in 2012 to +5.3% in 3Q 2016
viewtopic.php?f=10&t=4220&start=150
c. China Properties
i) About 4 years supply at Tier 3 & 4 cities
ii) Various new curbs in more than 20 cities
iii) Beijing is + 23.5% yoy
iv) Shanghai is + 31.2% yoy
v) Shenzhen is +36.8% yoy
vi) Guangzhou is +21.1% yoy
vii) Sales grew 25% in first 2 months of 2017 vs Dec 2016′s 11.8%
viii) 40% of smaller cities saw their housing investories drop to < 12 mths
ix) Sales by volume for the first 2 months of 2017, were up 26% yoy vs 34.8% for 2016
x) Sales in value terms grew 25.1 per cent in the first 2 months of 2017 vs 22.5% in 2016, suggesting home prices continue to race ahead.
viewtopic.php?f=10&t=8150&start=30
d. HK Properies
i) Price has surged almost 370% from 2003 to Sep 2015
ii) 18,000 new units completed in 2016. 94,000 units in next 3-4 years (up 40%)
iii) About 19,000 people left HK last year
iv) Margins have decreased to 25% from 40%
v) DB: Prices to drop 11% in 2017
vi) CS: Prices to drop 22% by end 2018
vii) Bocom: Prices to drop 20% to 30%, by end 2017
viii) Centaline: Mainland Chinese made up 16% of buyers during quarter
ix) DTZ: Prices to increase 5-10% by July 1, 2017
x) Citi: Prices to drop 15% in 2017
xi) 34,000 flats in pipeline for 2017
xii) Cushman & Wakefield: Prices to rise 5-10% in 1H 2017
xiii) Annual Supply of 20,000 from 8000%
Xiv) Centaline: Prices to increase 20% by Dec 2019
viewtopic.php?f=10&t=7785&p=202051#p202051
e. London Properties
i) Savills: 9% drop for luxury properties in 2016 and will not rise until 2019
ii) Hard Brexit: 5,000 jobs axed immediately? (1.1m jobs in Financial Services)
iii) London's population @ 8.7m. New households @ 50k pa. Supply 20k pa
iv) CEBR: Property prices in London to fall 6% in 2017
v) Molior: Homes built without buyer secured - 10,829, a 24% rise yoy
vi) Molior: 2 years to sell homes under construction
vii) Rightmove: Decline of 5% by end 2017
viii) Prices have surged about 86% since 2009
ix) Knight Frank: Prices dropped 6% in 2016 and will prime prices will probably be flat for 2017
viewtopic.php?f=11&t=3673&start=70
6. Yield on 10 Year US Treasuries - Lower. 2.41% from 2.50% from 2.58%
a. Low 1.32%; High 2.69%.
b. New regulations on Money Markets decreasing yield for US Treasuries
7. Interest Rates:-
a. Expecting interest rates to rise slowly over next two years
b. About US$9t or about 20% of the world’s bonds now have negative yields
c. US Feds: Three rate hikes in 2017? Four rate hikes in 2018 ?
d, Yield on 2-year German government bonds hit record lows, trading at negative 90 basis points
e. Russia reduced key rate from 10% to 9.75%
8. JNK (SPDR Barclays High Yield Bond ETF) - Higher. 36.54 from 36.63 from 36.33
9. Baltic Dry Index - Higher; 1240 from 1196 from 1086; Low 290; High 1257; 2330 (2013)
The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Please use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments
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viewtopic.php?f=26&t=3168
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TOL as of March 26, 2017
Fading of Trump's Reflation Trade?
Trump's Healthcare Bill has been defeated.
Does that now mean that all his other programs, including Tax Reform, Deregulation, Infrastructure Program, Defence Spending etc, are also facing Execution Risk ?
Intuitively, I think that it cannot be smooth sailing for all his programs. He does not have the required votes in Congress and even if they do get passed at Congress, he would be facing another set of obstacles in the Senate.
For anyone that has managed an enterprise before, you will know that it's not always smooth sailing and that you always need extra time to execute your plans.
It's the naive "experts" that have never manage an enterprise before, that thinks that things will always go in a straight line.
These naive "experts" includes those inexperienced MBAs that hide behind the names of the Consulting firms and Investment Banks.
Therefore, is that a surprise when you see the market rocketing 10% since the US election on just hope, that Trump would be able to deliver on his rhetoric?
And now, we are seeing a correction, as these same "experts" now suddenly realised that there could be some execution risk.
A 50% retracement of the Trump Rally ie. a 5% correction, is not unreasonable. Anything more than that would depends on the catalyst at that point in time.
In view of the above, I have started to buy some VXX as well as the SCO (Inverse Oil 2x). I may pyramid up on these positions depending on how the market reacts next week. If it does not go as planned, I may cut my losses and wait for the "M" to appear first on the charts.
I need to also remind myself that it"s Window Dressing time and that new money would also be arriving again from the new month of April.
Commodities:- Risk-Off (Data as of Saturday)
1. Oil - Lower. US$48.14 from US$48.72 last week from US$48.39 two weeks ago. Vested in SCO (Inverse 2x) and RH Petrogas; Support: US$42
a. Glut 1m bpd - rebalancing in 2017? Supply 98.03m bpd; Demand 98.09m bpd
b. Global Stockpiles: 2.5b barrels? US has 533m barrels
c. US SPR: 700m barrels; To sell 190m barrels from 2017-2025
d. Iran targeting to export 4m bpd by Mar 2017; Used to have 40m in storage
e. US Oil Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells
f. US Supply expected to increase by 250,000 bpd
g. China (4th largest producer) - Reserve life fallen from 10 years to 6 years
h. China Supply: Down 7% (300,000 bpd)
i. Saudi Aramco's IPO in 2018. Incentive for Saudis to maintain high oil prices
j. China: SPR reached 51/90 days; 2017 Imports to decrease?
k. Russia: ramping drilling activities in existing brownfields
l. OPEC: Cutting 1.8m bpd; Will they cut more until the IPO of Saudi Aramco?
m. Libya: 700k to 600k from 200k bpd (+0.5m bpd ); Used to produce 1.6m bpd
n. Fracking: +0.5m bpd @ US$60; +1m bpd @ US$70; +0.4m bpd 2017; +1m bpd 2018
o. Trump's deregulation may increase supply?
p. How will the new sanctions on Iran affect Oil? War with Iran?
q. Iraq increasing production to 5m bpd from 4.5m bpd
r. More than 30 oil supertankers are sitting off the coast of Singapore
s. US imports 8m bpd (Total Demand of India and Japan combined)
t. Summer driving will start soon
viewtopic.php?f=33&t=7550&start=210
2. Natural Gas - Higher: US$3.08 from US$2.96 from US$3.04. Not vested
a. Support 1.70; Resistance $4.00
b. Heating, Cooking, Transportation (CNG), Ammonia (Fertiliser), Hydrogen (Chemical Industry), Fabrics, Glass, Steel, Plastics Paint etc
c. High: US$13.69 (2008); Low: US$1.61 (March 2015)
d. Natural gas rigs: Dropped from 1,606 (2008) to low of 81. Now at 129
e. LNG are being exported from US to Latin America and AsiaTrade
f. Trade war with Mexico will bring prices down
g. Suppy increasing by 4% pa; Demand growing by 7% pa
h. Trump's deregulation may increase supply?
i. Winter storage declined modestly; Oversupply as winter ends?
viewtopic.php?f=33&t=1863&start=130
3. Gold - Higher. US$1243 from US$1229 from US$1205. Record US$1920.
Vested - Physical Gold Coins
a. Global Gold: 33,000 tons; US - 8000 tons; IMF - 3000 tons; Germany - 3000 tons
b. Electronics, Coins, Central Banks Reserve, Jewellery etc.
c. 250 oz of paper contract for every oz of physical gold holding on Comex?
d. Output fell by 100 metric tons (3%), from 3,150 in 2015 to 3,050 in 2016
e. Demand increasing in Muslim countries as Gold is now a halal investment
f. Indians are supposedly paying 2 times spot due to their cash issues
g. Rising USD & interest rates, would not be good for gold
viewtopic.php?f=33&t=7589&p=202084#p202084
4. Silver - Higher. US$17.78 from US$17.41 from US$17.06. Range High: 49
a. Solar Panels, Data Storage, Antibacterial products, Silver Coins, Jewelery etc
b. Demand: 1.2b ounces in 2015
c. Supply: 0.9b ounces in 2015
d. 35% (7700 metric tons) for Electronics
e. 25% (5500 metric tons) for Bullions & Coins
f. India imports more Silver than the US
g. JPM has 67m ounces
viewtopic.php?f=33&t=7589&p=202084#p202084
5. Platinum - US$965
a. Use: Catalytic Converters (43%); Jewelery (35%)
b. Rare: 170 metric tons (Gold 3100 Metric tons)
c. Demand > Supply: 120,000 ounces (5th year of Deficit )
viewtopic.php?f=33&t=8172&start=120
6. Coffee (Arabica May 17) - Lower. US$138 from US$142 from US$141
Low: US$135; US$120; High: US$175; US$300 (2011). Not vested
a. 150m Americans drink coffee daily (400m cups)
b. USA imports US$4b of coffee yearly
c. Supply: 152m bags; US$19b trade; Deficit 3.5m bags;
d. Demand 155m bags. By 2030, rising to 200m bags; 5% growth pa
e. Arabica, grown in Brazil (50m bags), is used in premium oulets. At risk from higher temperatures and more resilient pests. 60% of Production
f. Robusta, grown in Vietnam; Used in Instant Coffee; 40% more caffeine
g. What would be the breaking price for coffee ? In 2011, it touched US$300
h. Coffee Rust Disease in Central America lowered supply by 30% over past 3 yrs
i. By 2050, suitable land will halved and demand would have doubled
j. Farmers in Central America replacing coffee with cocoa due to climate change
k. Over 2.25 billion cups of coffee are consumed in the world every day
l. Growth: USA +1.5%; China +5%; India +4%
m. Bumper crops in Brazil, Colombia and Honduras
n. Record Arabica crop 2017? Price +30% in US for 2016
o. Robusta crop down 6% yoy; Price +60% in London for 2016
p. Illy: Rebalancing in 2017
q. Brazil is the biggest coffee producer, producing 1/3 of world’s coffee
r. Europe is the largest importer, accounting for 1/3 of world’s consumption.
s. Coffee is the most traded commodity in the world, following crude oil.
viewtopic.php?f=33&t=3812&start=80
7. Uranium (U3O8 UXC) - Lower. US$25.50 (mar 20) from US$24.50 (Mar 13) from US$25.50 (Mar 06). Vested in Cameco (CCJ)
a. Breakeven: US$40 per lb
b. High US$136 (2008); $20 (2005) to $136 (2007), 580% rise in two years
c. Global production: 158m lbs pa; 15% of Supply from decommisioned weapons
d. Stockpile: 1b lbs ( till 2022) ; Companies normally store 5-7 years supply
e. Japanese Demand: 13 lbs pa; Starting 21/54 reactors ?
f. Global Demand: 160m lbs pa to 225m lbs pa (2025)
g. Number of Nuclear plants: +8 pa for next 20 years, from 440 to 595
h. 61 new reactors under construction; 149 planned; How many would be built ?
i. China: 35 existing nuclear plants; Currently, building 20; To build 177 more?
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more?
k. 25% long-term supply contracts expiring in 2017-18; 75% between 2017-2025;
l. Russia withdrew from Nuclear deal in Oct 2016; With Trump, would there be another deal or would there be another arms race ?
m. Paris Climate Deal - implemented in November 2016;
n. China's air pollution worsening so nuclear energy maybe expanding
o. Some buyers are locking in long term contracts at US$40, twice the spot rates
p. Kazakhtan reducing supply by 10% (40% of global production)
q. Competition: Natural Gas, Solar, Wind, Wave etc
r. Nuclear power accounts for about 20% of the electricity generated in the U.S
s. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons etc;
viewtopic.php?f=33&t=705&start=80
8. Lithium - not vested
a. Global Lithium Demand: 185 ktpa; In 2025: 500 ktpa; Growth: 11% pa
b. Batteries: 40% demand now rising to 70% in 2025; Growth 45% yoy
c. 81% Global Supply: Chile, Australia and Argentina
d. 83% Global Suppy: Turning Around? Albemarle, SQM, FMC and Sichuan Tianqi
e. Cost of lithium-ion battery fell 65% to around $350 per kwh
f. Vehicle: LIT (not vested)
viewtopic.php?f=33&t=1667&start=20
9. Palladium (Jun 17) - Higher; US$809 from US$777 from US$747
a. Support: US$600; US$500; US$200; Resistance: US$800; US$900;
b. Catalytic Converters, Electronics, Dentistry, Medicine, Hydrogen Purification, Chemicals, Groundwater Treatment, Jewelry and Fuel Cells
c. Auto industry consumes 80% of supply
d. Demand by Auto industry doubled in past 10 years
e. Growth Demand: 3% a year for next 4 years
f. Russia and South Africa produced 3/4 of the world's mined palladium supply.
g. Heading toward its 8th annual supply deficit in 2017; 650,000 ounces in 2016
h. Vehicle: PALL (not vested)
viewtopic.php?f=33&t=7070
10. Zinc; Lower - US$2836 from US$2892 from US$2712
a. Supply Deficit 1.2m tons;
b. High US$4400 (2007); Low $1600 (Jan 2016)
c. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer,
d. Producers: Glencore (GLEN.L), Trevali (TV.TO), Nevsun Resources (NEV)
viewtopic.php?f=33&t=367&start=20
11. Sugar (#11 May 17); Lower - US$17.77 from US$18.26 from US$18.29
a. 5m tonnes deficit
b. Droughts in Thailand, Brazil and India
viewtopic.php?f=33&t=2136&start=150
12. Nickel; Lower - US$9880 from US$10273 from US$9918
a. Used in Construction, Cars, Cookware, Jets, Appliances, Lithium Ion Batteries etc
b. Phillippines: 1/4 of Global Supply; 30 mines closed (1/2 PI Output)
c. Indonesia: Allowed exports but requires 51% ownership by locals
d. Chinese Stainless Steel: +12% yoy
e. Global Demand: +6% pa
f. Battery Demand for Nickel: +20% in 2016
g. Demand for Lithium Ion Batteries: +14% pa
h. Deficit: Rising from 67k tonnes in 2016 to 93k tonnes in 2017
i. Vehicle: JJN (iPath Bloomberg Nickel)
viewtopic.php?f=33&t=969
13. If there's a crash, Commodities would not be spared.
14. The High USD is not good for Commodities
15. Global economy may worsening eg. potential trade wars etc
Equities - Risk-On ( Data as of Saturday every week )
1. US Equities - Lower. 2344 from 2378 last week from 2373 two weeks ago.
Bought VXX and SCO (Inverse Oil 2x);
viewtopic.php?f=11&t=7643&start=200
2. HK Equities - Higher. 24358 from 24310 from 23562;
Support 23250; Resistance 24650; No trade;
a. Support 21575; Resistance 24100;
viewtopic.php?f=10&t=7470&start=120
3. Shanghai Equities - Higher. 3269 from 3237 from 3214;
Support at 2450; Resistance 3450; No trade
viewtopic.php?f=10&t=7190&start=210
4. Spore Equities - No Trade.
5. Japan Equities - Lower. 19263 from 19522 from 19605
6. Malaysian Equities - Traded OSK
7. Australian Equities - No Trade.
Medical Marijuana Industry
a. Trump's AG, Jefferson Beauregard Sessions III hates marijuana
b. Trump's Health and Human Services secretary, Tom Price, also hates marijuana
c. The American marijuana industry now employs 100,000 to 150,000 people
d. In comparison, the American coal industry employs only 85,000 Americans
e. Last year, legal marijuana spending was $7b. By 2021, it should reach $22b
f. Both legal and illegal USA sales was $53b last year. Illegal sales was 85% of sales
g. Marijuana has been legalized for recreational use in 8 states including Washington, Colorado, California and the District of Columbia.
viewtopic.php?f=63&t=7650&start=10
Currencies- Mixed
1. USD to JPY - JPY Stronger. 111.33 from 112.69 last week from 114.77 two weeks ago
a. 52 week range is 76 to 126
viewtopic.php?f=32&t=4205&start=180
2. SGD to MYR - SGD Weaker; 3.1631 from 3.1638 from 3.1528
3. AUD to USD - AUD Weaker. 0.7634 from 0.7716 from 0.7555
a. The range is 0.70 (2016) to 1.10 (2011)
viewtopic.php?f=32&t=5256&start=130
4. AUD to SGD - AUD Weaker. 1.0674 from 1.0814 from 1.0661
a. The range is 0.98 (2016) to 1.36 (2012).
b. Am concerned that the spat between the US and China will affect the AUD
5. AUD to MYR - AUD Weaker. 3.3763 from 3.4213 from 3.3631
a. The range is 2.20 (2008) to 3.41 (2017)
b. Waiting to convert more AUD to MYR
6. EUR to USD - EUR Stronger. 1.0801 from 1.0747 from 1.0676
a. Will not be investing in the EUR as I think that it's in a multi-year decline
viewtopic.php?f=32&t=5523&start=100
7. USD to HKD - HKD Weaker. 7.7658 from 7.7599 from 7.7628
a. 52 week range is 7.7452 - 7.8296.
b. Will they remove the peg to the USD during a crisis ?
viewtopic.php?f=32&t=3529&start=40
8. USD to MYR:- MYR Stronger. 4.4230 from 4.4340 from 4.4490
a. 52 Week Range is 3.27 to 4.54.
b. Lowest: 4.885 (1998)
c. Decoupling of the MYR and Oil ?
d. Macquarie: 4.90 (Dec 31, 2017)
e. UOB: 4.35 (July 2017)
viewtopic.php?f=32&t=397&start=60
9. USD to SGD:- SGD Stronger; 1.3983 from 1.4015 from 1.4111
a. High 1.70 (2004); Low 1.20 (2011)
b. Expecting the SGD to drop against the USD
viewtopic.php?f=32&t=136&start=100
10. USD to CNY:- CNY Stronger; 6.8802 from 6.8999 from 6.9049
a. Expecting the CNY to continue dropping against the USD
viewtopic.php?f=32&t=7720&start=90
11. GBP to USD:- GBP Stronger. 1.2472 from 1.2399 from 1.2164
a. Will not be investing in the GBP versus the USD, as I think that it's in a multi-year decline
viewtopic.php?f=32&t=333&start=80
12. GBP to MYR:- GBP Stronger. 5.5164 from 5.4978 from 5.4118
a. Which has more effect ? Article 50 or Malaysian Election ?
13. Dollar Index - USD Weaker. 99.63 from 100.30 from 101.25
viewtopic.php?f=32&t=7616&start=60
Others
1. Sentiment - Complacent ?
2. Headwinds
a. Global
i) Derivatives (US$700t);
ii) Debts (US$225t, 225% GDP);
iii) Corporate Debt (US$50t);
iv) Institutional Investors (US$0.5t)
b. China
i) Debts (US$23t)
ii) Debt / GDP = 277%
ii) Corporate Debts (US$18t)
iii) Local Government Debts (US$3t; >30% GDP)
iv) Bad Debts (US$2t)
v) Mortgages: 1/4 Credit; 1/2 New Loans in 2016
c. US
i) Unfunded Debts (US$170t);
ii) Bank Debts (US$60t);
iii) Corporate Debts (US$5.5t);
iv) Oil Bad Debts (US$0.2t /US$2.5t);
v) Household Debts (US$12t);
vi) Auto Debts (US$1t);
vii) Mortgage Debts (US$8t);
viii) Foreigners Holding of US Treasuries (US$6.3t);
ix) Students Loan (US$1.4t, +20% pa, 4.2m people, 40% default);
x) Junk Bonds Maturing (2017-2021) - US$1.5t;
xi) US Feds Leverage (113 to 1);
xii) StockMarket Cap/GDP (200%);
d. Europe
i) NPLs (US$1.3t)
ii) Italian NPLs: 18%; US$0.4t
e. Emerging Markets:
i) US$ Debts (US$10t)
3. Tailwinds - Low Interest Rates, Cash Sidelines (US$50t); QE Programs US$18t - US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t); Negative Yield Bonds (US$4t from US$10t); US Foreign Funds Repatriation (US$2.5t); Cash US Corps (US$1t); Cash Japanese Corp (US$2t); Buybacks, US Household Net Worth (US$90t); EM Consumption;
4. Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
5. Properties
a. Spore Properties
i) Prices declined by 11% since 2013; Sales dropped by half since 2013
ii) About 24,000 private homes are vacant
iii) Developers sold 8,000 homes in 2016 compared to 7400 in 2015;
iv) Supply: 13,000 in 2017; 9300 in 2018; 7300 in 2019
v) The existing stock of unsold homes may take three years to sell
vi) Americans became the 2nd most frequent buyers of high-end homes
vii) More than 800 condo units were resold at a loss in 2016 as economy slows
viii) Prices fell 3% in 2016 for third straight yearly decline
ix) When would they be relaxing the housing curbs ?
x) >80% more homes being auctioned
xi) Unexpected relaxation of the curbs implies market is weaker than expected?
xii) Developers sold 977 units in Feb 2017, compared with a 382 units in Jan 2017
viewtopic.php?f=10&t=7750&start=40
b. Malaysia Properties
i) Knight Frank: Supply of about 44,000 high end condos in KL as of 1H 2016
ii) NAPIC: About 23% of residential & commercial properties from 1Q 2016 unsold
iii) Volume and Value of transactions declined 14% and 11%, in the first 9 mths of 2016
iv) Prices moderated for 4 years, from +11.8% in 2012 to +5.3% in 3Q 2016
viewtopic.php?f=10&t=4220&start=150
c. China Properties
i) About 4 years supply at Tier 3 & 4 cities
ii) Various new curbs in more than 20 cities
iii) Beijing is + 23.5% yoy
iv) Shanghai is + 31.2% yoy
v) Shenzhen is +36.8% yoy
vi) Guangzhou is +21.1% yoy
vii) Sales grew 25% in first 2 months of 2017 vs Dec 2016′s 11.8%
viii) 40% of smaller cities saw their housing investories drop to < 12 mths
ix) Sales by volume for the first 2 months of 2017, were up 26% yoy vs 34.8% for 2016
x) Sales in value terms grew 25.1 per cent in the first 2 months of 2017 vs 22.5% in 2016, suggesting home prices continue to race ahead.
viewtopic.php?f=10&t=8150&start=30
d. HK Properies
i) Price has surged almost 370% from 2003 to Sep 2015
ii) 18,000 new units completed in 2016. 94,000 units in next 3-4 years (up 40%)
iii) About 19,000 people left HK last year
iv) Margins have decreased to 25% from 40%
v) DB: Prices to drop 11% in 2017
vi) CS: Prices to drop 22% by end 2018
vii) Bocom: Prices to drop 20% to 30%, by end 2017
viii) Centaline: Mainland Chinese made up 16% of buyers during quarter
ix) DTZ: Prices to increase 5-10% by July 1, 2017
x) Citi: Prices to drop 15% in 2017
xi) 34,000 flats in pipeline for 2017
xii) Cushman & Wakefield: Prices to rise 5-10% in 1H 2017
xiii) Annual Supply of 20,000 from 8000%
Xiv) Centaline: Prices to increase 20% by Dec 2019
viewtopic.php?f=10&t=7785&p=202051#p202051
e. London Properties
i) Savills: 9% drop for luxury properties in 2016 and will not rise until 2019
ii) Hard Brexit: 5,000 jobs axed immediately? (1.1m jobs in Financial Services)
iii) London's population @ 8.7m. New households @ 50k pa. Supply 20k pa
iv) CEBR: Property prices in London to fall 6% in 2017
v) Molior: Homes built without buyer secured - 10,829, a 24% rise yoy
vi) Molior: 2 years to sell homes under construction
vii) Rightmove: Decline of 5% by end 2017
viii) Prices have surged about 86% since 2009
ix) Knight Frank: Prices dropped 6% in 2016 and will prime prices will probably be flat for 2017
viewtopic.php?f=11&t=3673&start=70
6. Yield on 10 Year US Treasuries - Lower. 2.41% from 2.50% from 2.58%
a. Low 1.32%; High 2.69%.
b. New regulations on Money Markets decreasing yield for US Treasuries
7. Interest Rates:-
a. Expecting interest rates to rise slowly over next two years
b. About US$9t or about 20% of the world’s bonds now have negative yields
c. US Feds: Three rate hikes in 2017? Four rate hikes in 2018 ?
d, Yield on 2-year German government bonds hit record lows, trading at negative 90 basis points
e. Russia reduced key rate from 10% to 9.75%
8. JNK (SPDR Barclays High Yield Bond ETF) - Higher. 36.54 from 36.63 from 36.33
9. Baltic Dry Index - Higher; 1240 from 1196 from 1086; Low 290; High 1257; 2330 (2013)
The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Please use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments
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viewtopic.php?f=26&t=3168
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It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston - Billionaire Boss
- Posts: 111129
- Joined: Wed May 07, 2008 9:28 am
Re: Winston's Investment Ideas 04 (Oct 15 - Dec 17)
by winston » Sun Apr 02, 2017 12:49 pm
TOL as of April 02, 2017
New Money From The New Month
It's a new month again so new money would be flowing into the markets again.
Therefore, there should be at least one spike in the markets early next week, unless the rally this week was due to the anticipation of those new money.
Thereafter, there should be a dip until earnings season.
At this point in time, I'm still not expecting a plunge but only a mild correction of at most 5% to 10%.
Anyway, the ingredients for a plunge are not visible yet eg. Euphoria, Credit Problems, Recession, Inverted Yield Curve etc.
However, I do need to remind myself of the following:-
1. "Sell in May & Go Away" is not too far away
2. The Xi-Trump Summit next week could be a potential problem. Luckily, they are using interpreters who will probably dilute any unfriendly words, unlike the Trump-Turnbull conversation where words are not being minced when they were talking directly to each other.
Commodities:- Risk-On (Data as of Saturday)
1. Oil - Higher. US$50.85 from US$48.14 last week from US$48.72 two weeks ago. Vested in SCO (Inverse 2x) and RH Petrogas;
Support: US$48; US$42; Resistance: US$53
a. Glut 1m bpd - rebalancing in 3Q, 2017? Supply 98.03m bpd; Demand 98.09m bpd
b. Global Stockpiles: 2.5b barrels? US has 533m barrels
c. US SPR: 700m barrels; To sell 190m barrels from 2017-2025
d. Iran targeting to export 4m bpd by Mar 2017; Used to have 40m in storage
e. US Oil Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells
f. US Supply expected to increase by 250,000 bpd
g. China (4th largest producer) - Reserve life fallen from 10 years to 6 years
h. China Supply: Down 7% (300,000 bpd)
i. Saudi Aramco's IPO in 2018. Incentive for Saudis to maintain high oil prices
j. China: SPR reached 51/90 days; 2017 Imports to decrease?
k. Russia: ramping drilling activities in existing brownfields
l. OPEC: Cutting 1.8m bpd; Expecting extension of 6 months in May 25, 2017
m. Libya: Fighting decreased supply by 250k bpd;
n. Fracking: +0.5m bpd @ US$60; +1m bpd @ US$70; +0.4m bpd 2017; +1m bpd 2018
o. Trump's deregulation may increase supply?
p. How will the new sanctions on Iran affect Oil? War with Iran?
q. Iraq increasing production to 5m bpd from 4.5m bpd
r. More than 30 oil supertankers are sitting off the coast of Singapore
s. US imports 8m bpd (Total Demand of India and Japan combined)
t. Summer driving will start soon
viewtopic.php?f=33&t=7550&start=210
2. Natural Gas - Higher: US$3.19 from US$3.08 from US$2.96. Not vested
a. Support US$2.80; US$1.70; Resistance US$4.00
b. Heating, Cooking, Transportation (CNG), Ammonia (Fertiliser), Hydrogen (Chemical Industry), Fabrics, Glass, Steel, Plastics Paint etc
c. High: US$13.69 (2008); Low: US$1.61 (March 2015)
d. Natural gas rigs: Dropped from 1,606 (2008) to low of 81. Now at 129
e. LNG are being exported from US to Latin America and AsiaTrade
f. Trade war with Mexico will bring prices down
g. Suppy increasing by 4% pa; Demand growing by 7% pa
h. Trump's deregulation may increase supply?
i. Winter storage declined modestly; Oversupply as winter ends?
viewtopic.php?f=33&t=1863&start=130
3. Gold - Higher. US$1252 from US$1243 from US$1229. Record US$1920.
Vested - Physical Gold Coins
a. Global Gold: 33,000 tons; US - 8000 tons; IMF - 3000 tons; Germany - 3000 tons
b. Electronics, Coins, Central Banks Reserve, Jewellery etc.
c. 250 oz of paper contract for every oz of physical gold holding on Comex?
d. Output fell by 100 metric tons (3%), from 3,150 in 2015 to 3,050 in 2016
e. Demand increasing in Muslim countries as Gold is now a halal investment
f. Rising USD & interest rates, would not be good for gold
viewtopic.php?f=33&t=7589&p=202084#p202084
4. Silver - Higher. US$18.28 from US$17.78 from US$17.41.
Support: US$17.00; Resistance: US$18.50; Range High: US$49
a. Solar Panels, Data Storage, Antibacterial products, Silver Coins, Jewelery etc
b. Demand: 1.2b ounces in 2015
c. Supply: 0.9b ounces in 2015
d. 35% (7700 metric tons) for Electronics
e. 25% (5500 metric tons) for Bullions & Coins
f. India imports more Silver than the US
g. JPM has 67m ounces
viewtopic.php?f=33&t=7589&p=202084#p202084
5. Platinum - Lower; US$953 from US$965
a. Use: Catalytic Converters (43%); Jewelery (35%)
b. Rare: 170 metric tons (Gold 3100 Metric tons)
c. Demand > Supply: 120,000 ounces (5th year of Deficit )
viewtopic.php?f=33&t=8172&start=120
6. Palladium (Jun 17) - Lower; US$799 from US$809 from US$777
a. Support: US$600; US$500; US$200; Resistance: US$800; US$900;
b. Catalytic Converters, Electronics, Dentistry, Medicine, Hydrogen Purification, Chemicals, Groundwater Treatment, Jewelry and Fuel Cells
c. Auto industry consumes 80% of supply
d. Demand by Auto industry doubled in past 10 years
e. Growth Demand: 3% a year for next 4 years
f. Russia and South Africa produced 3/4 of the world's mined palladium supply.
g. Heading toward its 8th annual supply deficit in 2017; 650,000 ounces in 2016
h. Vehicle: PALL (not vested)
viewtopic.php?f=33&t=7070
7. Coffee (Arabica May 17) - Higher. US$139 from US$138 from US$142
Low: US$135; US$120; High: US$175; US$300 (2011). Not vested
a. 150m Americans drink coffee daily (400m cups)
b. USA imports US$4b of coffee yearly
c. Supply: 152m bags; US$19b trade; Deficit 3.5m bags;
d. Demand 155m bags. By 2030, rising to 200m bags; 5% growth pa
e. Arabica, grown in Brazil (50m bags), is used in premium oulets. At risk from higher temperatures and more resilient pests. 60% of Production
f. Robusta, grown in Vietnam; Used in Instant Coffee; 40% more caffeine
g. What would be the breaking price for coffee ? In 2011, it touched US$300
h. Coffee Rust Disease in Central America lowered supply by 30% over past 3 yrs
i. By 2050, suitable land will halved and demand would have doubled
j. Farmers in Central America replacing coffee with cocoa due to climate change
k. Over 2.25 billion cups of coffee are consumed in the world every day
l. Growth: USA +1.5%; China +5%; India +4%
m. Bumper crops in Brazil, Colombia and Honduras
n. Record Arabica crop 2017? Price +30% in US for 2016
o. Robusta crop down 6% yoy; Price +60% in London for 2016
p. Illy: Rebalancing in 2017
q. Brazil is the biggest coffee producer, producing 1/3 of world’s coffee
r. Europe is the largest importer, accounting for 1/3 of world’s consumption.
s. Coffee is the most traded commodity in the world, following crude oil.
viewtopic.php?f=33&t=3812&start=80
8. Uranium (U3O8 UXC) - Lower. US$24.50 (Mar27) from US$25.50 (Mar 20) from US$24.50 (Mar 13). Vested in Cameco (CCJ)
a. Breakeven: US$40 per lb
b. High US$136 (2008); $20 (2005) to $136 (2007), 580% rise in two years
c. Global production: 158m lbs pa; 15% of Supply from decommisioned weapons
d. Stockpile: 1b lbs ( till 2022) ; Companies normally store 5-7 years supply
e. Japanese Demand: 13 lbs pa; Starting 21/54 reactors ?
f. Global Demand: 160m lbs pa to 225m lbs pa (2025)
g. Number of Nuclear plants: +8 pa for next 20 years, from 440 to 595
h. 61 new reactors under construction; 149 planned; How many would be built ?
i. China: 35 existing nuclear plants; Currently, building 20; To build 177 more?
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more?
k. 25% long-term supply contracts expiring in 2017-18; 75% between 2017-2025;
l. Russia withdrew from Nuclear deal in Oct 2016; With Trump, would there be another deal or would there be another arms race ?
m. Paris Climate Deal - implemented in November 2016;
n. China's air pollution worsening so nuclear energy maybe expanding
o. Some buyers are locking in long term contracts at US$40, twice the spot rates
p. Kazakhtan reducing supply by 10% (40% of global production)
q. Competition: Natural Gas, Solar, Wind, Wave etc
r. Nuclear power accounts for about 20% of the electricity generated in the U.S
s. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons etc;
t. Will the bankruptcy of Westinghouse affect Uranium demand ?
viewtopic.php?f=33&t=705&start=80
9. Lithium - not vested
a. Global Lithium Demand: 185 ktpa; In 2025: 500 ktpa; Growth: 11% pa
b. Batteries: 40% demand now rising to 70% in 2025; Growth 45% yoy
c. 81% Global Supply: Chile, Australia and Argentina
d. 83% Global Suppy: Turning Around? Albemarle, SQM, FMC and Sichuan Tianqi
e. Cost of lithium-ion battery fell 65% to around $350 per kwh
f. Vehicle: LIT (not vested)
viewtopic.php?f=33&t=1667&start=20
10. Zinc; Lower - US$2768 from US$2836 from US$2892
a. Supply Deficit 1.2m tons;
b. High US$4400 (2007); Low $1600 (Jan 2016)
c. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer,
d. Producers: Glencore (GLEN.L), Trevali (TV.TO), Nevsun Resources (NEV)
viewtopic.php?f=33&t=367&start=20
11. Sugar (#11 May 17); Lower - US$16.82 from US$17.77 from US$18.26
a. 5m tonnes deficit
b. Droughts in Thailand, Brazil and India
viewtopic.php?f=33&t=2136&start=150
12. Nickel; Higher - US$10023 from US$9880 from US$10273
a. Used in Construction, Cars, Cookware, Jets, Appliances, Lithium Ion Batteries etc
b. Phillippines: 1/4 of Global Supply; 30 mines closed (1/2 PI Output)
c. Indonesia: Allowed exports but requires 51% ownership by locals
d. Chinese Stainless Steel: +12% yoy
e. Global Demand: +6% pa
f. Battery Demand for Nickel: +20% in 2016
g. Demand for Lithium Ion Batteries: +14% pa
h. Deficit: Rising from 67k tonnes in 2016 to 93k tonnes in 2017
i. Vehicle: JJN (iPath Bloomberg Nickel)
viewtopic.php?f=33&t=969
13. If there's a crash, Commodities would not be spared.
14. The High USD is not good for Commodities
15. Global economy may worsening eg. potential trade wars etc
Equities - Risk-On ( Data as of Saturday every week )
1. US Equities - Higher. 2363 from 2344 last week from 2378 two weeks ago. No Trade;
viewtopic.php?f=11&t=7643&start=200
2. HK Equities - Lower. 24112 from 24358 from 24310; No trade;
a. Support: 23250, 21575; Resistance: 24650
viewtopic.php?f=10&t=7470&start=120
3. Shanghai Equities - Lower. 3223 from 3269 from 3237
Support at 2450; Resistance 3450; No trade
viewtopic.php?f=10&t=7190&start=210
4. Spore Equities - No Trade.
5. Japan Equities - Lower. 18909 from 19263 from 19522
6. Malaysian Equities - No Trade
7. Australian Equities - No Trade
Medical Marijuana Industry
a. Trump's AG, Jefferson Beauregard Sessions III hates marijuana
b. Trump's Health and Human Services secretary, Tom Price, also hates marijuana
c. The American marijuana industry now employs 100,000 to 150,000 people
d. In comparison, the American coal industry employs only 85,000 Americans
e. Last year, legal marijuana spending was $7b. By 2021, it should reach $22b
f. Both legal and illegal USA sales was $53b last year. Illegal sales was 85% of sales
g. Marijuana has been legalized for recreational use in 8 states including Washington, Colorado, California and the District of Columbia.
viewtopic.php?f=63&t=7650&start=10
Currencies- Mixed
1. USD to JPY - JPY Flat. 111.38 from 111.33 last week from 112.69 two weeks ago
a. 52 week range is 76 to 126
viewtopic.php?f=32&t=4205&start=180
2. SGD to MYR - SGD Stronger; 3.1685 from 3.1631 from 3.1638
3. AUD to USD - AUD Stronger. 0.7641 from 0.7634 from 0.7716
a. The range is 0.70 (2016) to 1.10 (2011)
viewtopic.php?f=32&t=5256&start=130
4. AUD to SGD - AUD Weaker. 1.0668 from 1.0674 from 1.0814
a. The range is 0.98 (2016) to 1.36 (2012).
b. Am concerned that the spat between the US and China will affect the AUD
5. AUD to MYR - AUD Stronger. 3.3802 from 3.3763 from 3.4213
a. The range is 2.20 (2008) to 3.41 (2017)
b. Waiting to convert more AUD to MYR
6. EUR to USD - EUR Weaker. 1.0669 from 1.0801 from 1.0747
a. Will not be investing in the EUR as I think that it's in a multi-year decline
viewtopic.php?f=32&t=5523&start=100
7. USD to HKD - HKD Weaker. 7.7690 from 7.7658 from 7.7599
a. 52 week range is 7.7452 - 7.8296.
b. Will they remove the peg to the USD during a crisis ?
viewtopic.php?f=32&t=3529&start=40
8. USD to MYR:- MYR Weaker. 4.4240 from 4.4230 from 4.4340
a. 52 Week Range is 3.27 to 4.54.
b. Lowest: 4.885 (1998)
c. Decoupling of the MYR and Oil ?
d. Macquarie: 4.90 (Dec 31, 2017)
e. UOB: 4.35 (July 2017)
viewtopic.php?f=32&t=397&start=60
9. USD to SGD:- SGD Stronger; 1.3963 from 1.3983 from 1.4015
a. High 1.70 (2004); Low 1.20 (2011)
b. Expecting the SGD to drop against the USD
viewtopic.php?f=32&t=136&start=100
10. USD to CNY:- CNY Weaker; 6.8831 from 6.8802 from 6.8999
a. Expecting the CNY to continue dropping against the USD
viewtopic.php?f=32&t=7720&start=90
11. GBP to USD:- GBP Stronger. 1.2545 from 1.2472 from 1.2399
a. Will not be investing in the GBP versus the USD, as I think that it's in a multi-year decline
viewtopic.php?f=32&t=333&start=80
12. GBP to MYR:- GBP Stronger. 5.5499 from 5.5164 from 5.4978
a. Which has more effect ? Article 50 or Malaysian Election ?
13. Dollar Index - USD Stronger. 100.35 from 99.63 from 100.30
viewtopic.php?f=32&t=7616&start=60
Others
1. Sentiment - Complacent ?
2. Headwinds
a. Global
i) Derivatives (US$700t);
ii) Debts (US$225t, 225% GDP);
iii) Corporate Debt (US$50t);
iv) Institutional Investors (US$0.5t)
b. China
i) Debts (US$23t)
ii) Debt / GDP = 277%
ii) Corporate Debts (US$18t)
iii) Local Government Debts (US$3t; >30% GDP)
iv) Bad Debts (US$2t)
v) Mortgages: 1/4 Credit; 1/2 New Loans in 2016
c. US
i) Unfunded Debts (US$170t);
ii) Bank Debts (US$60t);
iii) Corporate Debts (US$5.5t);
iv) Oil Bad Debts (US$0.2t /US$2.5t);
v) Household Debts (US$12t);
vi) Auto Debts (US$1t);
vii) Mortgage Debts (US$8t);
viii) Foreigners Holding of US Treasuries (US$6.3t);
ix) Students Loan (US$1.4t, +20% pa, 4.2m people, 40% default);
x) Junk Bonds Maturing (2017-2021) - US$1.5t;
xi) US Feds Leverage (113 to 1);
xii) StockMarket Cap/GDP (200%);
xiii) Unfunded US pensions: US$6t from US$300b in 2007;
xiv) Margin Debts: US$530b
d. Europe
i) NPLs (US$1.3t)
ii) Italian NPLs: 18%; US$0.4t
e. Emerging Markets:
i) US$ Debts (US$10t)
3. Tailwinds - Low Interest Rates, Cash Sidelines (US$50t); QE Programs US$18t - US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t); Negative Yield Bonds (US$4t from US$10t); US Foreign Funds Repatriation (US$2.5t); Cash US Corps (US$1t); Cash Japanese Corp (US$2t); Buybacks, US Household Net Worth (US$90t); EM Consumption;
4. Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
5. Properties
a. Spore Properties
i) Prices declined by 11% since 2013; Sales dropped by half since 2013
ii) About 24,000 private homes are vacant
iii) Developers sold 8,000 homes in 2016 compared to 7400 in 2015;
iv) Supply: 13,000 in 2017; 9300 in 2018; 7300 in 2019
v) The existing stock of unsold homes may take three years to sell
vi) Americans became the 2nd most frequent buyers of high-end homes
vii) More than 800 condo units were resold at a loss in 2016 as economy slows
viii) Prices fell 3% in 2016 for third straight yearly decline
ix) When would they be relaxing the housing curbs ?
x) >80% more homes being auctioned
xi) Unexpected relaxation of the curbs implies market is weaker than expected?
xii) Developers sold 977 units in Feb 2017, compared with a 382 units in Jan 2017
viewtopic.php?f=10&t=7750&start=40
b. Malaysia Properties
i) Knight Frank: Supply of about 44,000 high end condos in KL as of 1H 2016
ii) NAPIC: About 23% of residential & commercial properties from 1Q 2016 unsold
iii) Volume and Value of transactions declined 14% and 11%, in the first 9 mths of 2016
iv) Prices moderated for 4 years, from +11.8% in 2012 to +5.3% in 3Q 2016
viewtopic.php?f=10&t=4220&start=150
c. China Properties
i) About 4 years supply at Tier 3 & 4 cities
ii) Various new curbs in more than 20 cities
iii) Beijing is + 23.5% yoy
iv) Shanghai is + 31.2% yoy
v) Shenzhen is +36.8% yoy
vi) Guangzhou is +21.1% yoy
vii) Sales grew 25% in first 2 months of 2017 vs Dec 2016′s 11.8%
viii) 40% of smaller cities saw their housing investories drop to < 12 mths
ix) Sales by volume for the first 2 months of 2017, were up 26% yoy vs 34.8% for 2016
x) Sales in value terms grew 25.1 per cent in the first 2 months of 2017 vs 22.5% in 2016, suggesting home prices continue to race ahead.
viewtopic.php?f=10&t=8150&start=30
d. HK Properies
i) Price has surged almost 370% from 2003 to Sep 2015
ii) 18,000 new units completed in 2016. 94,000 units in next 3-4 years (up 40%)
iii) About 19,000 people left HK last year
iv) Margins have decreased to 25% from 40%
v) DB: Prices to drop 11% in 2017
vi) CS: Prices to drop 22% by end 2018
vii) Bocom: Prices to drop 20% to 30%, by end 2017
viii) Centaline: Mainland Chinese made up 16% of buyers during quarter
ix) DTZ: Prices to increase 5-10% by July 1, 2017
x) Citi: Prices to drop 15% in 2017
xi) 34,000 flats in pipeline for 2017
xii) Cushman & Wakefield: Prices to rise 5-10% in 1H 2017
xiii) Annual Supply of 20,000 from 8000%
Xiv) Centaline: Prices to increase 20% by Dec 2019
viewtopic.php?f=10&t=7785&p=202051#p202051
e. London Properties
i) Savills: 9% drop for luxury properties in 2016 and will not rise until 2019
ii) Hard Brexit: 5,000 jobs axed immediately? (1.1m jobs in Financial Services)
iii) London's population @ 8.7m. New households @ 50k pa. Supply 20k pa
iv) CEBR: Property prices in London to fall 6% in 2017
v) Molior: Homes built without buyer secured - 10,829, a 24% rise yoy
vi) Molior: 2 years to sell homes under construction
vii) Rightmove: Decline of 5% by end 2017
viii) Prices have surged about 86% since 2009
ix) Knight Frank: Prices dropped 6% in 2016 and will prime prices will probably be flat for 2017
viewtopic.php?f=11&t=3673&start=70
6. Yield on 10 Year US Treasuries - Lower. 2.39 % from 2.41% from 2.50%
a. Low 1.32%; High 2.69%.
b. New regulations on Money Markets decreasing yield for US Treasuries
7. Interest Rates:-
a. Expecting interest rates to rise slowly over next two years
b. About US$9t or about 20% of the world’s bonds now have negative yields
c. US Feds: Three rate hikes in 2017? Four rate hikes in 2018 ?
d, Yield on 2-year German government bonds hit record lows, trading at negative 90 basis points
e. Russia reduced key rate from 10% to 9.75%
8. JNK (SPDR Barclays High Yield Bond ETF) - Higher. 36.93 from 36.54 from 36.63
9. Baltic Dry Index - Higher; 1297 from 1240 from 1196; Low 290; High 2330 (2013)
The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Please use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments
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Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.
viewtopic.php?f=26&t=3168
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New Money From The New Month
It's a new month again so new money would be flowing into the markets again.
Therefore, there should be at least one spike in the markets early next week, unless the rally this week was due to the anticipation of those new money.
Thereafter, there should be a dip until earnings season.
At this point in time, I'm still not expecting a plunge but only a mild correction of at most 5% to 10%.
Anyway, the ingredients for a plunge are not visible yet eg. Euphoria, Credit Problems, Recession, Inverted Yield Curve etc.
However, I do need to remind myself of the following:-
1. "Sell in May & Go Away" is not too far away
2. The Xi-Trump Summit next week could be a potential problem. Luckily, they are using interpreters who will probably dilute any unfriendly words, unlike the Trump-Turnbull conversation where words are not being minced when they were talking directly to each other.
Commodities:- Risk-On (Data as of Saturday)
1. Oil - Higher. US$50.85 from US$48.14 last week from US$48.72 two weeks ago. Vested in SCO (Inverse 2x) and RH Petrogas;
Support: US$48; US$42; Resistance: US$53
a. Glut 1m bpd - rebalancing in 3Q, 2017? Supply 98.03m bpd; Demand 98.09m bpd
b. Global Stockpiles: 2.5b barrels? US has 533m barrels
c. US SPR: 700m barrels; To sell 190m barrels from 2017-2025
d. Iran targeting to export 4m bpd by Mar 2017; Used to have 40m in storage
e. US Oil Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells
f. US Supply expected to increase by 250,000 bpd
g. China (4th largest producer) - Reserve life fallen from 10 years to 6 years
h. China Supply: Down 7% (300,000 bpd)
i. Saudi Aramco's IPO in 2018. Incentive for Saudis to maintain high oil prices
j. China: SPR reached 51/90 days; 2017 Imports to decrease?
k. Russia: ramping drilling activities in existing brownfields
l. OPEC: Cutting 1.8m bpd; Expecting extension of 6 months in May 25, 2017
m. Libya: Fighting decreased supply by 250k bpd;
n. Fracking: +0.5m bpd @ US$60; +1m bpd @ US$70; +0.4m bpd 2017; +1m bpd 2018
o. Trump's deregulation may increase supply?
p. How will the new sanctions on Iran affect Oil? War with Iran?
q. Iraq increasing production to 5m bpd from 4.5m bpd
r. More than 30 oil supertankers are sitting off the coast of Singapore
s. US imports 8m bpd (Total Demand of India and Japan combined)
t. Summer driving will start soon
viewtopic.php?f=33&t=7550&start=210
2. Natural Gas - Higher: US$3.19 from US$3.08 from US$2.96. Not vested
a. Support US$2.80; US$1.70; Resistance US$4.00
b. Heating, Cooking, Transportation (CNG), Ammonia (Fertiliser), Hydrogen (Chemical Industry), Fabrics, Glass, Steel, Plastics Paint etc
c. High: US$13.69 (2008); Low: US$1.61 (March 2015)
d. Natural gas rigs: Dropped from 1,606 (2008) to low of 81. Now at 129
e. LNG are being exported from US to Latin America and AsiaTrade
f. Trade war with Mexico will bring prices down
g. Suppy increasing by 4% pa; Demand growing by 7% pa
h. Trump's deregulation may increase supply?
i. Winter storage declined modestly; Oversupply as winter ends?
viewtopic.php?f=33&t=1863&start=130
3. Gold - Higher. US$1252 from US$1243 from US$1229. Record US$1920.
Vested - Physical Gold Coins
a. Global Gold: 33,000 tons; US - 8000 tons; IMF - 3000 tons; Germany - 3000 tons
b. Electronics, Coins, Central Banks Reserve, Jewellery etc.
c. 250 oz of paper contract for every oz of physical gold holding on Comex?
d. Output fell by 100 metric tons (3%), from 3,150 in 2015 to 3,050 in 2016
e. Demand increasing in Muslim countries as Gold is now a halal investment
f. Rising USD & interest rates, would not be good for gold
viewtopic.php?f=33&t=7589&p=202084#p202084
4. Silver - Higher. US$18.28 from US$17.78 from US$17.41.
Support: US$17.00; Resistance: US$18.50; Range High: US$49
a. Solar Panels, Data Storage, Antibacterial products, Silver Coins, Jewelery etc
b. Demand: 1.2b ounces in 2015
c. Supply: 0.9b ounces in 2015
d. 35% (7700 metric tons) for Electronics
e. 25% (5500 metric tons) for Bullions & Coins
f. India imports more Silver than the US
g. JPM has 67m ounces
viewtopic.php?f=33&t=7589&p=202084#p202084
5. Platinum - Lower; US$953 from US$965
a. Use: Catalytic Converters (43%); Jewelery (35%)
b. Rare: 170 metric tons (Gold 3100 Metric tons)
c. Demand > Supply: 120,000 ounces (5th year of Deficit )
viewtopic.php?f=33&t=8172&start=120
6. Palladium (Jun 17) - Lower; US$799 from US$809 from US$777
a. Support: US$600; US$500; US$200; Resistance: US$800; US$900;
b. Catalytic Converters, Electronics, Dentistry, Medicine, Hydrogen Purification, Chemicals, Groundwater Treatment, Jewelry and Fuel Cells
c. Auto industry consumes 80% of supply
d. Demand by Auto industry doubled in past 10 years
e. Growth Demand: 3% a year for next 4 years
f. Russia and South Africa produced 3/4 of the world's mined palladium supply.
g. Heading toward its 8th annual supply deficit in 2017; 650,000 ounces in 2016
h. Vehicle: PALL (not vested)
viewtopic.php?f=33&t=7070
7. Coffee (Arabica May 17) - Higher. US$139 from US$138 from US$142
Low: US$135; US$120; High: US$175; US$300 (2011). Not vested
a. 150m Americans drink coffee daily (400m cups)
b. USA imports US$4b of coffee yearly
c. Supply: 152m bags; US$19b trade; Deficit 3.5m bags;
d. Demand 155m bags. By 2030, rising to 200m bags; 5% growth pa
e. Arabica, grown in Brazil (50m bags), is used in premium oulets. At risk from higher temperatures and more resilient pests. 60% of Production
f. Robusta, grown in Vietnam; Used in Instant Coffee; 40% more caffeine
g. What would be the breaking price for coffee ? In 2011, it touched US$300
h. Coffee Rust Disease in Central America lowered supply by 30% over past 3 yrs
i. By 2050, suitable land will halved and demand would have doubled
j. Farmers in Central America replacing coffee with cocoa due to climate change
k. Over 2.25 billion cups of coffee are consumed in the world every day
l. Growth: USA +1.5%; China +5%; India +4%
m. Bumper crops in Brazil, Colombia and Honduras
n. Record Arabica crop 2017? Price +30% in US for 2016
o. Robusta crop down 6% yoy; Price +60% in London for 2016
p. Illy: Rebalancing in 2017
q. Brazil is the biggest coffee producer, producing 1/3 of world’s coffee
r. Europe is the largest importer, accounting for 1/3 of world’s consumption.
s. Coffee is the most traded commodity in the world, following crude oil.
viewtopic.php?f=33&t=3812&start=80
8. Uranium (U3O8 UXC) - Lower. US$24.50 (Mar27) from US$25.50 (Mar 20) from US$24.50 (Mar 13). Vested in Cameco (CCJ)
a. Breakeven: US$40 per lb
b. High US$136 (2008); $20 (2005) to $136 (2007), 580% rise in two years
c. Global production: 158m lbs pa; 15% of Supply from decommisioned weapons
d. Stockpile: 1b lbs ( till 2022) ; Companies normally store 5-7 years supply
e. Japanese Demand: 13 lbs pa; Starting 21/54 reactors ?
f. Global Demand: 160m lbs pa to 225m lbs pa (2025)
g. Number of Nuclear plants: +8 pa for next 20 years, from 440 to 595
h. 61 new reactors under construction; 149 planned; How many would be built ?
i. China: 35 existing nuclear plants; Currently, building 20; To build 177 more?
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more?
k. 25% long-term supply contracts expiring in 2017-18; 75% between 2017-2025;
l. Russia withdrew from Nuclear deal in Oct 2016; With Trump, would there be another deal or would there be another arms race ?
m. Paris Climate Deal - implemented in November 2016;
n. China's air pollution worsening so nuclear energy maybe expanding
o. Some buyers are locking in long term contracts at US$40, twice the spot rates
p. Kazakhtan reducing supply by 10% (40% of global production)
q. Competition: Natural Gas, Solar, Wind, Wave etc
r. Nuclear power accounts for about 20% of the electricity generated in the U.S
s. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons etc;
t. Will the bankruptcy of Westinghouse affect Uranium demand ?
viewtopic.php?f=33&t=705&start=80
9. Lithium - not vested
a. Global Lithium Demand: 185 ktpa; In 2025: 500 ktpa; Growth: 11% pa
b. Batteries: 40% demand now rising to 70% in 2025; Growth 45% yoy
c. 81% Global Supply: Chile, Australia and Argentina
d. 83% Global Suppy: Turning Around? Albemarle, SQM, FMC and Sichuan Tianqi
e. Cost of lithium-ion battery fell 65% to around $350 per kwh
f. Vehicle: LIT (not vested)
viewtopic.php?f=33&t=1667&start=20
10. Zinc; Lower - US$2768 from US$2836 from US$2892
a. Supply Deficit 1.2m tons;
b. High US$4400 (2007); Low $1600 (Jan 2016)
c. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer,
d. Producers: Glencore (GLEN.L), Trevali (TV.TO), Nevsun Resources (NEV)
viewtopic.php?f=33&t=367&start=20
11. Sugar (#11 May 17); Lower - US$16.82 from US$17.77 from US$18.26
a. 5m tonnes deficit
b. Droughts in Thailand, Brazil and India
viewtopic.php?f=33&t=2136&start=150
12. Nickel; Higher - US$10023 from US$9880 from US$10273
a. Used in Construction, Cars, Cookware, Jets, Appliances, Lithium Ion Batteries etc
b. Phillippines: 1/4 of Global Supply; 30 mines closed (1/2 PI Output)
c. Indonesia: Allowed exports but requires 51% ownership by locals
d. Chinese Stainless Steel: +12% yoy
e. Global Demand: +6% pa
f. Battery Demand for Nickel: +20% in 2016
g. Demand for Lithium Ion Batteries: +14% pa
h. Deficit: Rising from 67k tonnes in 2016 to 93k tonnes in 2017
i. Vehicle: JJN (iPath Bloomberg Nickel)
viewtopic.php?f=33&t=969
13. If there's a crash, Commodities would not be spared.
14. The High USD is not good for Commodities
15. Global economy may worsening eg. potential trade wars etc
Equities - Risk-On ( Data as of Saturday every week )
1. US Equities - Higher. 2363 from 2344 last week from 2378 two weeks ago. No Trade;
viewtopic.php?f=11&t=7643&start=200
2. HK Equities - Lower. 24112 from 24358 from 24310; No trade;
a. Support: 23250, 21575; Resistance: 24650
viewtopic.php?f=10&t=7470&start=120
3. Shanghai Equities - Lower. 3223 from 3269 from 3237
Support at 2450; Resistance 3450; No trade
viewtopic.php?f=10&t=7190&start=210
4. Spore Equities - No Trade.
5. Japan Equities - Lower. 18909 from 19263 from 19522
6. Malaysian Equities - No Trade
7. Australian Equities - No Trade
Medical Marijuana Industry
a. Trump's AG, Jefferson Beauregard Sessions III hates marijuana
b. Trump's Health and Human Services secretary, Tom Price, also hates marijuana
c. The American marijuana industry now employs 100,000 to 150,000 people
d. In comparison, the American coal industry employs only 85,000 Americans
e. Last year, legal marijuana spending was $7b. By 2021, it should reach $22b
f. Both legal and illegal USA sales was $53b last year. Illegal sales was 85% of sales
g. Marijuana has been legalized for recreational use in 8 states including Washington, Colorado, California and the District of Columbia.
viewtopic.php?f=63&t=7650&start=10
Currencies- Mixed
1. USD to JPY - JPY Flat. 111.38 from 111.33 last week from 112.69 two weeks ago
a. 52 week range is 76 to 126
viewtopic.php?f=32&t=4205&start=180
2. SGD to MYR - SGD Stronger; 3.1685 from 3.1631 from 3.1638
3. AUD to USD - AUD Stronger. 0.7641 from 0.7634 from 0.7716
a. The range is 0.70 (2016) to 1.10 (2011)
viewtopic.php?f=32&t=5256&start=130
4. AUD to SGD - AUD Weaker. 1.0668 from 1.0674 from 1.0814
a. The range is 0.98 (2016) to 1.36 (2012).
b. Am concerned that the spat between the US and China will affect the AUD
5. AUD to MYR - AUD Stronger. 3.3802 from 3.3763 from 3.4213
a. The range is 2.20 (2008) to 3.41 (2017)
b. Waiting to convert more AUD to MYR
6. EUR to USD - EUR Weaker. 1.0669 from 1.0801 from 1.0747
a. Will not be investing in the EUR as I think that it's in a multi-year decline
viewtopic.php?f=32&t=5523&start=100
7. USD to HKD - HKD Weaker. 7.7690 from 7.7658 from 7.7599
a. 52 week range is 7.7452 - 7.8296.
b. Will they remove the peg to the USD during a crisis ?
viewtopic.php?f=32&t=3529&start=40
8. USD to MYR:- MYR Weaker. 4.4240 from 4.4230 from 4.4340
a. 52 Week Range is 3.27 to 4.54.
b. Lowest: 4.885 (1998)
c. Decoupling of the MYR and Oil ?
d. Macquarie: 4.90 (Dec 31, 2017)
e. UOB: 4.35 (July 2017)
viewtopic.php?f=32&t=397&start=60
9. USD to SGD:- SGD Stronger; 1.3963 from 1.3983 from 1.4015
a. High 1.70 (2004); Low 1.20 (2011)
b. Expecting the SGD to drop against the USD
viewtopic.php?f=32&t=136&start=100
10. USD to CNY:- CNY Weaker; 6.8831 from 6.8802 from 6.8999
a. Expecting the CNY to continue dropping against the USD
viewtopic.php?f=32&t=7720&start=90
11. GBP to USD:- GBP Stronger. 1.2545 from 1.2472 from 1.2399
a. Will not be investing in the GBP versus the USD, as I think that it's in a multi-year decline
viewtopic.php?f=32&t=333&start=80
12. GBP to MYR:- GBP Stronger. 5.5499 from 5.5164 from 5.4978
a. Which has more effect ? Article 50 or Malaysian Election ?
13. Dollar Index - USD Stronger. 100.35 from 99.63 from 100.30
viewtopic.php?f=32&t=7616&start=60
Others
1. Sentiment - Complacent ?
2. Headwinds
a. Global
i) Derivatives (US$700t);
ii) Debts (US$225t, 225% GDP);
iii) Corporate Debt (US$50t);
iv) Institutional Investors (US$0.5t)
b. China
i) Debts (US$23t)
ii) Debt / GDP = 277%
ii) Corporate Debts (US$18t)
iii) Local Government Debts (US$3t; >30% GDP)
iv) Bad Debts (US$2t)
v) Mortgages: 1/4 Credit; 1/2 New Loans in 2016
c. US
i) Unfunded Debts (US$170t);
ii) Bank Debts (US$60t);
iii) Corporate Debts (US$5.5t);
iv) Oil Bad Debts (US$0.2t /US$2.5t);
v) Household Debts (US$12t);
vi) Auto Debts (US$1t);
vii) Mortgage Debts (US$8t);
viii) Foreigners Holding of US Treasuries (US$6.3t);
ix) Students Loan (US$1.4t, +20% pa, 4.2m people, 40% default);
x) Junk Bonds Maturing (2017-2021) - US$1.5t;
xi) US Feds Leverage (113 to 1);
xii) StockMarket Cap/GDP (200%);
xiii) Unfunded US pensions: US$6t from US$300b in 2007;
xiv) Margin Debts: US$530b
d. Europe
i) NPLs (US$1.3t)
ii) Italian NPLs: 18%; US$0.4t
e. Emerging Markets:
i) US$ Debts (US$10t)
3. Tailwinds - Low Interest Rates, Cash Sidelines (US$50t); QE Programs US$18t - US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t); Negative Yield Bonds (US$4t from US$10t); US Foreign Funds Repatriation (US$2.5t); Cash US Corps (US$1t); Cash Japanese Corp (US$2t); Buybacks, US Household Net Worth (US$90t); EM Consumption;
4. Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants
5. Properties
a. Spore Properties
i) Prices declined by 11% since 2013; Sales dropped by half since 2013
ii) About 24,000 private homes are vacant
iii) Developers sold 8,000 homes in 2016 compared to 7400 in 2015;
iv) Supply: 13,000 in 2017; 9300 in 2018; 7300 in 2019
v) The existing stock of unsold homes may take three years to sell
vi) Americans became the 2nd most frequent buyers of high-end homes
vii) More than 800 condo units were resold at a loss in 2016 as economy slows
viii) Prices fell 3% in 2016 for third straight yearly decline
ix) When would they be relaxing the housing curbs ?
x) >80% more homes being auctioned
xi) Unexpected relaxation of the curbs implies market is weaker than expected?
xii) Developers sold 977 units in Feb 2017, compared with a 382 units in Jan 2017
viewtopic.php?f=10&t=7750&start=40
b. Malaysia Properties
i) Knight Frank: Supply of about 44,000 high end condos in KL as of 1H 2016
ii) NAPIC: About 23% of residential & commercial properties from 1Q 2016 unsold
iii) Volume and Value of transactions declined 14% and 11%, in the first 9 mths of 2016
iv) Prices moderated for 4 years, from +11.8% in 2012 to +5.3% in 3Q 2016
viewtopic.php?f=10&t=4220&start=150
c. China Properties
i) About 4 years supply at Tier 3 & 4 cities
ii) Various new curbs in more than 20 cities
iii) Beijing is + 23.5% yoy
iv) Shanghai is + 31.2% yoy
v) Shenzhen is +36.8% yoy
vi) Guangzhou is +21.1% yoy
vii) Sales grew 25% in first 2 months of 2017 vs Dec 2016′s 11.8%
viii) 40% of smaller cities saw their housing investories drop to < 12 mths
ix) Sales by volume for the first 2 months of 2017, were up 26% yoy vs 34.8% for 2016
x) Sales in value terms grew 25.1 per cent in the first 2 months of 2017 vs 22.5% in 2016, suggesting home prices continue to race ahead.
viewtopic.php?f=10&t=8150&start=30
d. HK Properies
i) Price has surged almost 370% from 2003 to Sep 2015
ii) 18,000 new units completed in 2016. 94,000 units in next 3-4 years (up 40%)
iii) About 19,000 people left HK last year
iv) Margins have decreased to 25% from 40%
v) DB: Prices to drop 11% in 2017
vi) CS: Prices to drop 22% by end 2018
vii) Bocom: Prices to drop 20% to 30%, by end 2017
viii) Centaline: Mainland Chinese made up 16% of buyers during quarter
ix) DTZ: Prices to increase 5-10% by July 1, 2017
x) Citi: Prices to drop 15% in 2017
xi) 34,000 flats in pipeline for 2017
xii) Cushman & Wakefield: Prices to rise 5-10% in 1H 2017
xiii) Annual Supply of 20,000 from 8000%
Xiv) Centaline: Prices to increase 20% by Dec 2019
viewtopic.php?f=10&t=7785&p=202051#p202051
e. London Properties
i) Savills: 9% drop for luxury properties in 2016 and will not rise until 2019
ii) Hard Brexit: 5,000 jobs axed immediately? (1.1m jobs in Financial Services)
iii) London's population @ 8.7m. New households @ 50k pa. Supply 20k pa
iv) CEBR: Property prices in London to fall 6% in 2017
v) Molior: Homes built without buyer secured - 10,829, a 24% rise yoy
vi) Molior: 2 years to sell homes under construction
vii) Rightmove: Decline of 5% by end 2017
viii) Prices have surged about 86% since 2009
ix) Knight Frank: Prices dropped 6% in 2016 and will prime prices will probably be flat for 2017
viewtopic.php?f=11&t=3673&start=70
6. Yield on 10 Year US Treasuries - Lower. 2.39 % from 2.41% from 2.50%
a. Low 1.32%; High 2.69%.
b. New regulations on Money Markets decreasing yield for US Treasuries
7. Interest Rates:-
a. Expecting interest rates to rise slowly over next two years
b. About US$9t or about 20% of the world’s bonds now have negative yields
c. US Feds: Three rate hikes in 2017? Four rate hikes in 2018 ?
d, Yield on 2-year German government bonds hit record lows, trading at negative 90 basis points
e. Russia reduced key rate from 10% to 9.75%
8. JNK (SPDR Barclays High Yield Bond ETF) - Higher. 36.93 from 36.54 from 36.63
9. Baltic Dry Index - Higher; 1297 from 1240 from 1196; Low 290; High 2330 (2013)
The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Please use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments
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