Winston's Investment Ideas 04 (Oct 15 - May 19)

Re: Winston's Investment Ideas 04 (Oct 15 - Dec 18)

Postby winston » Sun Aug 26, 2018 6:26 pm

TOL @ August 26, 2018

Tencent.jpg


Time to buy Tencent ?

Tencent has corrected from HK$480 to about HK$320 recently. That's a one-third drop in about 5 months.

So will it continue to drop further or has it hit Support at about $320?

Intuitively, I think that the selling is a bit overdone.

The reason given ere:-
1. Gaming Revenue is weak as the new regulators have not been approving new games for the past few months.
2. Some of their Investments are not doing that well eg. China Literature, Tesla (3rd largest position, US$1.5b at US$220) etc
3. Tenpay transactions are no longer that strong
4. Tencent is losing market share in the Social Media space.

On the positive side:-
1. Valuation is not streched ( Forward PE30, Revenue 30%, Margins 30%)
2. 1b Active Monthly Users
3. 1m Mini-Programs
4. Invested in 600 companies; Constant stream of IPOs

I'm vested in Tencent and the following are my notes:-
viewtopic.php?f=41&t=7579&start=200

On the horizon, we have the following:-
1. CMOC Board Meeting on Aug 27
2. Decision on Rusal at end of August
3. Congress hearing on US-China Trade War at end August
4. New Money From New Month of Sept

As expected, China mentioned that the US-China Trade War will not be resolved before the Mid-Term elections. Therefore, the share markets of EM will probably be choppy until November.


Market Risk Indicators
1. Euphoria: 6 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;
2. Credit Problems: 7 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds
3. Recession: 7 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?
4. Liquidity: 7 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?;
5. Inverted Yield: 8 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020
6. Valuation; 8 (Safe 1: PE15; Danger 10: PE30) - PE S&P 24, Nadsaq 26; Revenue; USD; Tax Reform; Deregulation
7. Geopolitical Issues: 7 (Peaceful: 1; War: 10) - NKorea; Syria; Iran; Qatar, Afghanistan; South China Sea; Europe; Venezuela; Russia
Total: 50 out of 70 (71%); (Safe: 50%; Danger: 80%)


Commodities: Risk-On (Data from Commodities Live)

1. WTI Oil - Higher. US$68.54 from US$65.89 last week from US$67.78 two weeks ago; Support: US$58; US$34; Resistance: US$75, US$105
a. Rebalancing in 3Q 2018?
b. Stockpiles: 2.5b barrels;
c. US SPR: 679m barrels (33 days); To sell 190m over 8 years.
d. US imports 8m bpd (Total Demand of India and Japan combined)
e. US: Capex: US$1t; > 4000 "Drilled but Uncompleted" (DUC) Wells?
f. US: Active rigs currently at 1057 vs 316 in May 2016
g. China (4th largest producer; largest importer) - Reserve life: 10 to 6 years
h. China: Ban on Petrolchemical Cars in 5-10 years ? Quotas?
i. IEA: Lowest amount of new discoveries in 2016; Supply shortage in 2020?
j. Saudi Aramco's IPO 2019?; Incentive to push prices up; Saudi -200k bpd
k. China: SPR reached 51/90 days; 2018 Imports to decrease?
l. Libya: -850k bpd; Brazil +200k bpd; Canada +200k bpd; Nigeria -300k bpd; Iraq +500k bpd; Kurdistan -350k bpd; US +1m bpd (2019); Russia +200k
m. US Fracking: +0.5m bpd US$60; +1m bpd US$70; +1m bpd 2018
n. Venezeula: -1.2m bpd; Worst Case -2m bpd supply (50% cut by 2020)?
o. Trade Wars will reduce demand for Oil?
p. Iran: -700k bpd; On sanctions: -1m bpd?
q. IEA expects oil prices to dip in 2H as Shale Supply increases
r. OPEC cut 1.8m bpd; Increasing 1m bpd in 2H 2018? +0.5m in 2019?
viewtopic.php?f=33&t=7550&start=210

2. Gold - Higher. US$1212 from US$1191 from US$1219
Support: $1150; $1050; Resistance: $1400
a. Global 33,000 tons; US 8000t; China 5000t; IMF 3000t; Germany 3000t
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
g. Gold only occupies 0.03% of US investments. In 1981, it was 8%
h: India Demand: Since 2010, down each year. 2017 (700t); 2020 (900t)
i. China Demand: Since 2013, decreased 33% from 940t to 630t last year
j. Global Demand: 1Q 2018: -7%; US & European ETFs buyers; China weak
k. Central Banks: +20% yoy; Strong Russian buying
l. U.S. government holds 261.5m ounces at book value of US$42m
m. China: Reserves 160m oz; 400m oz ground; Output decreased 6% yoy
n. US: Reserve 260m oz
viewtopic.php?f=33&t=7589&p=202084#p202084

3. Silver - Flat. US$14.79 from US$14.78 from US$15.31
a. Support: US$16.10; US$15.20; Resistance: US$18.50; High: US$49
b. LED chips, Cell Phones, Nuclear Reactors, Photography, Solar Panels, RFID Chips, Semiconductors, Water Purification, Data Storage, Antibacterial products, Silver Coins, Jewelery
c. Demand: 1.2b ounces in 2015;
d. Supply: 0.9b ounces in 2015.
e. 4th year of deficit
f. 35% (7700 metric tons) for Electronics
g. 25% (5500 metric tons) for Bullions & Coins
h. India imports more Silver than the US
i. JPM has 67m ounces
j. High Gold/Siver Ratio: 50 t0 70; Currently 76, 50% higher than average
k, Production declining
l. Demand: 40% Investments / Speculation; 60% Industrial
m. About 1b ounces stored in China; 1 Year Production
n. How will US tariffs on Solar Panels affect silver prices?
viewtopic.php?f=33&t=7589&p=202084#p202084

4. Platinum - Flat; US$791 from US$789 from US$829
a. 28% for jewelry
b. 42% for diesel catalytic converters
c. Remainder for other industrial applications
d. Huge discount to Gold
e. Sixth year of deficit
f. 10 times more gold than platinum
g. Costlier to mine than gold as located deeper
h. Diesel cars losing market share
i. Strong demand from vehicles destroyed by Hurricanes (1m cars)

5. Zinc - Higher; US$2533 from US$2380 from US$2540
a. Global Demand: +14% pa for past 4 years
b. Supply: 13.7 tons; Supply Deficit 1.2m tons;
b. Breakpoint: High US$4400 (2007); Low $1600 (Jan 2016)
d. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer
e. Zinc inventories at the LME have dropped to their lowest level since 2009
f. Vehicle: DB Base Metal (Zinc, Aluminum & Copper)
viewtopic.php?f=33&t=367&start=208.

6. Copper - Higher; US$2.69 from US$2.66 from US$2.75
a. Higher inventories at LME
b. China - 50% of global consumption
c. China - Lower Power Grid demand
viewtopic.php?f=33&t=5598&p=215285#p215285

7. Aluminium - Higher; US$2093 from US$2034 from US$2093
a. Sanctions on Rusal has removed 7% of world's supply

8. Uranium - Flat; US$26.10 from US$26.00 from US$26.00
a. Breakeven: US$40 per lb
b. Range: $20 (2005) to $136 (2008); 580% rise in two years
c. Global Supply: 158m lbs pa; 15% from decommisioned weapons
d. Global Demand: 190m lbs pa to 300m lbs pa (2030)
e. Stockpile: 1b lbs (till 2022?) ; Companies normally store 5 years supply
f. Japanese Demand: 3m lbs pa; Starting 21/54 reactors? Currently, only 9
g. No. of Nuclear plants: +8 pa for next 20 yrs, 440 to 595; Current 452
h. 56 new reactors being built; 481 planned;
i. China: 35 existing plants; Building 21; To build 177 more?
j. India: 22 existing nuclear plants; Building 5; To build 64 more?
k. 25% long-term contracts expiring in 2017-18; 75% between 2017-25
l. 200 European nuclear reactors will be shut down over the next 25 years
m. France: Reduce nuclear to 50% from 75% by 2025 and closure of 20
n. Long term contracts being locked at US$40, twice spot rates
o. Kazakhtan reducing supply by 10% (40% of global production)
p. Competition: Natural Gas, Solar, Wind, Wave etc
q. US: Nuclear - 20% of electricity; 99/447 Plants; 25% drop by 2025; Two Year Moratorium on Closure
r. Supply: 50k tons; Demand: 68k tons; 2k tons enriched for weapons
s. 1b pounds to be purchased for long-term contracts over next 5-10 years
t. Average reactor needs 600,000 to 700,000 pounds to run for a year
u. US: 100/420 reactors; Importing 95% uranium; Demand 50m lbs pa
v. Uranium from Sea Water; Viable at US$180/kg (US$80/lbs); Timing?
w. Glut at 15m pounds (23 reactors for 1 year)
x. Cameco mothballed McArthur River & Key Lake; 10% world's supply
y. Kazatomprom, world's second largest, cut production by 20% for 3 yrs
z. Russia banning export of Uranium?

8. Cobalt; $29.26 ($64500/t) Aug 23 from $29.26 ($64500/t);
Low $10; High US$43
a. Electric Vehicles (8 kg), Smartphones (8 grams), Jet Engines; Gigafactories
b. Congo: Supplies >50% world's supply; Child Labor?
c. Demand: 8% to 10% pa
d. Shortage: 2022 and beyond
e. Cobalt Reduced EV is 5-10 years away? Musk: Cobalt in Tesla heading to 0;
f. 2018: 1m EVs (10k tonnes); 2027: 27m ( 27m tonnes)

9. If there's a crash, Commodities would not be spared
10. The High USD is not good for Commodities


Equities - Mixed ( Data as of Saturday every week )

1. US Equities - Higher. 2875 from 2850 last week from 2833 two weeks ago
a. Support 2740; 2560; Resistance: 2880; Fwd PE 16
b. No Trade
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Higher. 27672 from 27213 from 28356
a. Support: 26900; 25400; Resistance: 29200; 31600; 38,000; 43,000
b. Traded Tencent (0700)
c. Traded CMOC (3993)
d. Sold CNOOC (0883)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Higher. 2729 from 2669 from 2795
a. Support: 2600; 2450; Resistance 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Flat; 3213 from 3211 from 3285
a. Resistance 3850
b. No Trade
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Higher. 22602 from 22270 from 22298
a. Forward PE 13
b. Resistance 24,000
c. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Higher; 1809 from 1783 from 1806
a. No Trade
viewtopic.php?f=10&t=6292&start=30



Currencies- Risk-Off (Data from XE.com)

1. USD to JPY - JPY Weaker; 111.23 from 110.47 last week from 110.86 two weeks ago
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Why is it a Safe Haven ?
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger; 2.9899 from 2.9788 from 2.9834
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.7324 from 0.7282 from 0.7303
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. I need to diversify my AUD into another currency
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Stronger. 0.9999 from 0.9997 from 1.0016
a. The range is 0.98 (2016) to 1.36 (2012).
b. I would choose the AUD over the SGD

5. AUD to MYR - AUD Stronger. 2.9983 from 2.9891 from 2.9837
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Stronger. 1.1628 from 1.1410 from 1.1448
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Weaker. 7.8514 from 7.8497 from 7.8494
a. 52 week range is 7.7452 - 7.8530
b. Will they remove the peg to the USD during the next crisis?
c. Will China ask HK to depeg from the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Stronger. 4.0931 from 4.1046 from 4.0844
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=60

9. USD to SGD:- SGD Stronger; 1.3655 from 1.3728 from 1.3715
a. High 1.70 (2004); Low 1.20 (2011)
b. Am very uncomfortable holding the currency of a small country
viewtopic.php?f=32&t=136&start=100

10. USD to CNY:- CNY Stronger; 6.8058 from 6.8777 from 6.8505
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Stronger; 1.2839 from 1.2731 from 1.2767
a. Brexit; Politics;
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Stronger; 5.2563 from 5.2249 from 5.2160

13. Dollar Index - USD Weaker. 95.15 from 96.29 from 95.16
viewtopic.php?f=32&t=7616&start=60


Others

Sentiment - Complacent?

Headwinds
i) Derivatives (US$700t);
ii) Debts (US$237t, 318% GDP);
iii) Corporate Debt (US$50t); US Corp Debts (US$6t)
iv) Institutional Investors (US$0.5t)
v) ETFs AUM (US$3.4t)
vi) Bitcoin (US$200b)
vii) US Pension Short-Fall: US$385b
viii) NPLs at European Banks: EUR$1t
ix) China's Bond Market: US$12t (third largest)

Tailwinds
a. Low Interest Rates
b. Cash Sidelines (US$50t)
c. QE US$18t: US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t)
d. Negative Yield Bonds (US$6t from US$10t)
e. US Foreign Funds Repatriation (US$2.5t)
f. Cash US Corporations (US$1t)
g. Cash Japanese Corporations (US$2t)
h. Buybacks: US$120b 2Q, 2017 (-10% qoq; -6% yoy); US$3.2t since 2009; i. US Household Net Worth (US$90t)
j. EM Consumption
k. Private Client Cash Levels as a % of Total Assets: Record Low (10.4%)
l. Institutional Investors: lowest levels of cash for past 8 years; 1/3 high in 2016
m. Private Equities: US$600b Cash

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

HK Properties
1. Vacancy tax
2. 9000 vacant apartments
3. CLSA, UBS and Citi - Prices may 10% to 15% by end 2019
4. Rising Interest rates
5. Slowing Economy
6. Depreciating Yuan
7. Weak Stock Markets

Spore Properties
1. 60,000 Units of Supply (7 years Supply of 6500 Homes per year )


Yield on 10 Year US Treasuries - Lower; 2.81% from 2.86% last week from 2.87% two weeks ago
a. Low 1.32%; High 3.12%
b. Resistance 3.3%

Yield on 2 Year Treasuries - Higher; 2.62% from 2.61% from 2.60%

Interest Rates:-
a. Expecting US Interest Rates to remain low and will only rise slowly over next 2 years
b. About US$6t or about 15% of the world’s bonds have negative yields
c. Two more US rate hikes in 2018? Two in 2019?
viewtopic.php?f=16&t=7319&start=70

JNK (SPDR Barclays High Yield Bond ETF) - Higher; 36.01 from 35.86 from 35.81

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 86.35 from 85.94 from 85.89

Baltic Dry Index - Lower; 1709 from 1720 from 1691; Low 290; High 2330 (2013)


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. 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
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Re: Winston's Investment Ideas 04 (Oct 15 - Dec 18)

Postby winston » Sun Sep 02, 2018 8:50 am

TOL @ Sep 2, 2018

september.jpg


New Money From The New Month

It's a new month again and new money would be flowing into the markets again. Therefore, we should be able to get at least one spike in the markets, sometime next week. Thereafter, I think that the markets would be a bit weak.

For the US markets, Earnings Season is winding down and that strong catalyst for the past few weeks, would no longer be there for the next 2 months. However, Window Dressing will start in about 2-3 weeks time though.

For the EMs, sentiment is quite bad and they may continue to be weak until Window Dressing appears.

In view of the above, I have taken advantage of the spike in the markets over the past two weeks, to raise some Cash.

My exposure to Equities (as a % of my Liquid Assets) is now about 34% from about 42% about two weeks ago. Hopefully, I would be smart enough to reduce my Equities exposure to about 15% before the big correction (if one is on the way).

I'm also watching my Currency Exposure, in view of the weak Turkish Lira, Venezeulan Peso, Argentine Peso, South African Rand, Indian Rupee, Iranian Rial, Indonesian Rupiah, Chinese RMB etc.

Currently, I have some USD, HKD, AUD, SGD, GBP and MYR assets. Unfortunately, my "USD/HKD/Gold" exposure is only 17%. I should try to increase that to about 40% ASAP. However, it's not an easy thing to do as you cant just liquidate Fixed Assets (eg. Properties) or even Equities, at a good price.

In addition, I think that the USD is a bit overbought and could drop if they do announce an end to the US-China Trade Friction.

On the horizon, we have the following:-
1. Decision on Rusal in early September
2. Congress hearing on US-China Trade War in early September
3. 3Q Window Dressing in about 2-3 weeks time

As for the US-China Trade War, I think that it will extend till at least the November. It's getting very bitter and China would now like to see Trump lose a few Republican's seats. Thereafter, Trump may extend the issue till mid-2019. In the meantime, just pray that it will not lead to a real War, which can be sparked by an incident in the South China Sea, Taiwan, North Korea etc.


Market Risk Indicators
1. Euphoria: 7 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;
2. Credit Problems: 7 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds
3. Recession: 7 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?
4. Liquidity: 7 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?;
5. Inverted Yield: 7 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020
6. Valuation; 7 (Safe 1: PE15; Danger 10: PE30) - PE S&P 24, Nadsaq 26; Revenue; USD; Tax Reform; Deregulation
7. Geopolitical Issues: 8 (Peaceful: 1; War: 10) - NKorea; Syria; Iran; Qatar, Afghanistan; South China Sea; Europe; Venezuela; Russia; Taiwan
Total: 50 out of 70 (71%); (Safe: 50%; Danger: 80%)


Commodities: Risk-Off (Data from Commodities Live)

1. WTI Oil - Higher. US$69.91 from US$68.54 last week from US$65.89 two weeks ago; Support: US$58; US$34; Resistance: US$75, US$105
a. Rebalancing in 3Q 2018?
b. Stockpiles: 2.5b barrels;
c. US SPR: 679m barrels (33 days); To sell 190m over 8 years.
d. US imports 8m bpd (Total Demand of India and Japan combined)
e. US: Capex: US$1t; > 4000 "Drilled but Uncompleted" (DUC) Wells?
f. US: Active rigs currently at 1057 vs 316 in May 2016
g. China (4th largest producer; largest importer) - Reserve life: 10 to 6 years
h. China: Ban on Petrolchemical Cars in 5-10 years ? Quotas?
i. IEA: Lowest amount of new discoveries in 2016; Supply shortage in 2020?
j. Saudi Aramco's IPO 2019?; Incentive to push prices up; Saudi -200k bpd
k. China: SPR reached 51/90 days; 2018 Imports to decrease?
l. Libya: -850k bpd; Brazil +200k bpd; Canada +200k bpd; Nigeria -300k bpd; Iraq +500k bpd; Kurdistan -350k bpd; US +1m bpd (2019); Russia +200k
m. US Fracking: +0.5m bpd US$60; +1m bpd US$70; +1m bpd 2018
n. Venezeula: -1.2m bpd; Worst Case -2m bpd supply (50% cut by 2020)?
o. Trade Wars will reduce demand for Oil?
p. Iran: -700k bpd; On sanctions: -1m bpd?
q. IEA expects oil prices to dip in 2H as Shale Supply increases
r. OPEC cut 1.8m bpd; Increasing 1m bpd in 2H 2018? +0.5m in 2019?
viewtopic.php?f=33&t=7550&start=210

2. Gold - Lower. US$1207 from US$1212 from US$1191
Support: $1150; $1050; Resistance: $1400
a. Global 33,000 tons; US 8000t; China 5000t; IMF 3000t; Germany 3000t
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
g. Gold only occupies 0.03% of US investments. In 1981, it was 8%
h: India Demand: Since 2010, down each year. 2017 (700t); 2020 (900t)
i. China Demand: Since 2013, decreased 33% from 940t to 630t last year
j. Global Demand: 1Q 2018: -7%; US & European ETFs buyers; China weak
k. Central Banks: +20% yoy; Strong Russian buying
l. U.S. government holds 261.5m ounces at book value of US$42m
m. China: Reserves 160m oz; 400m oz ground; Output decreased 6% yoy
n. US: Reserve 260m oz
viewtopic.php?f=33&t=7589&p=202084#p202084

3. Silver - Lower. US$14.58 from US$14.79 from US$14.78
a. Support: US$16.10; US$15.20; Resistance: US$18.50; High: US$49
b. LED chips, Cell Phones, Nuclear Reactors, Photography, Solar Panels, RFID Chips, Semiconductors, Water Purification, Data Storage, Antibacterial products, Silver Coins, Jewelery
c. Demand: 1.2b ounces in 2015;
d. Supply: 0.9b ounces in 2015.
e. 4th year of deficit
f. 35% (7700 metric tons) for Electronics
g. 25% (5500 metric tons) for Bullions & Coins
h. India imports more Silver than the US
i. JPM has 67m ounces
j. High Gold/Siver Ratio: 50 t0 70; Currently 76, 50% higher than average
k, Production declining
l. Demand: 40% Investments / Speculation; 60% Industrial
m. About 1b ounces stored in China; 1 Year Production
n. How will US tariffs on Solar Panels affect silver prices?
viewtopic.php?f=33&t=7589&p=202084#p202084

4. Platinum - Lower; US$788 from US$791 from US$789
a. 28% for jewelry
b. 42% for diesel catalytic converters
c. Remainder for other industrial applications
d. Huge discount to Gold
e. Sixth year of deficit
f. 10 times more gold than platinum
g. Costlier to mine than gold as located deeper
h. Diesel cars losing market share
i. Strong demand from vehicles destroyed by Hurricanes (1m cars)

5. Zinc - Lower; US$2462 from US$2533 from US$2380
a. Global Demand: +14% pa for past 4 years
b. Supply: 13.7 tons; Supply Deficit 1.2m tons;
b. Breakpoint: High US$4400 (2007); Low $1600 (Jan 2016)
d. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer
e. Zinc inventories at the LME have dropped to their lowest level since 2009
f. Vehicle: DB Base Metal (Zinc, Aluminum & Copper)
viewtopic.php?f=33&t=367&start=208.

6. Copper - Lower; US$2.66 from US$2.69 from US$2.66
a. Higher inventories at LME
b. China - 50% of global consumption
c. China - Lower Power Grid demand
viewtopic.php?f=33&t=5598&p=215285#p215285

7. Aluminium - Higher; US$2120 from US$2093 from US$2034
a. Sanctions on Rusal has removed 7% of world's supply

8. Uranium - Flat; US$26.20 from US$26.10 from US$26.00
a. Breakeven: US$40 per lb
b. Range: $20 (2005) to $136 (2008); 580% rise in two years
c. Global Supply: 158m lbs pa; 15% from decommisioned weapons
d. Global Demand: 190m lbs pa to 300m lbs pa (2030)
e. Stockpile: 1b lbs (till 2022?) ; Companies normally store 5 years supply
f. Japanese Demand: 3m lbs pa; Starting 21/54 reactors? Currently, only 9
g. No. of Nuclear plants: +8 pa for next 20 yrs, 440 to 595; Current 452
h. 56 new reactors being built; 481 planned;
i. China: 35 existing plants; Building 21; To build 177 more?
j. India: 22 existing nuclear plants; Building 5; To build 64 more?
k. 25% long-term contracts expiring in 2017-18; 75% between 2017-25
l. 200 European nuclear reactors will be shut down over the next 25 years
m. France: Reduce nuclear to 50% from 75% by 2025 and closure of 20
n. Long term contracts being locked at US$40, twice spot rates
o. Kazakhtan reducing supply by 10% (40% of global production)
p. Competition: Natural Gas, Solar, Wind, Wave etc
q. US: Nuclear - 20% of electricity; 99/447 Plants; 25% drop by 2025; Two Year Moratorium on Closure
r. Supply: 50k tons; Demand: 68k tons; 2k tons enriched for weapons
s. 1b pounds to be purchased for long-term contracts over next 5-10 years
t. Average reactor needs 600,000 to 700,000 pounds to run for a year
u. US: 100/420 reactors; Importing 95% uranium; Demand 50m lbs pa
v. Uranium from Sea Water; Viable at US$180/kg (US$80/lbs); Timing?
w. Glut at 15m pounds (23 reactors for 1 year)
x. Cameco mothballed McArthur River & Key Lake; 10% world's supply
y. Kazatomprom, world's second largest, cut production by 20% for 3 yrs
z. Russia banning export of Uranium?

8. Cobalt; $29.60 ( $65250/t) Aug30 from $29.26 ($64500/t) Aug23 from $29.26 ($64500/t);
Low $10; High US$43
a. Electric Vehicles (8 kg), Smartphones (8 grams), Jet Engines; Gigafactories
b. Congo: Supplies >50% world's supply; Child Labor?
c. Demand: 8% to 10% pa
d. Shortage: 2022 and beyond
e. Cobalt Reduced EV is 5-10 years away? Musk: Cobalt in Tesla heading to 0;
f. 2018: 1m EVs (10k tonnes); 2027: 27m ( 27m tonnes)

9. If there's a crash, Commodities would not be spared
10. The High USD is not good for Commodities


Equities - Risk-On ( Data as of Saturday every week )

1. US Equities - Higher. 2902 from 2875 last week from 2850 two weeks ago
a. Support 2740; 2560; Resistance: 3000; Fwd PE 16
b. Sold Baidu
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Higher. 27889 from 27672 from 27213
a. Support: 26900; 25400; Resistance: 29200; 31600; 38,000; 43,000
b. Bought Tencent (0700)
c. Sold ICBC (1398)
d. Sold Sunny Optical (2382)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Lower. 2725 from 2729 from 2669
a. Support: 2600; 2450; Resistance 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Flat; 3214 from 3213 from 3211
a. Resistance 3850
b. No Trade
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Higher. 22865 from 22602 from 22270
a. Forward PE 13
b. Resistance 24,000
c. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Higher; 1820 from 1809 from 1783
a. No Trade
viewtopic.php?f=10&t=6292&start=30



Currencies- Mixed (Data from XE.com)

1. USD to JPY - JPY Stronger; 110.75 from 111.23 last week from 110.47 two weeks ago
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Why is it a Safe Haven ?
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger; 2.9983 from 2.9899 from 2.9788
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Weaker; 0.7211 from 0.7324 from 0.7282
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. I need to diversify my AUD into another currency
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Weaker. 0.9886 from 0.9999 from 0.9997
a. The range is 0.98 (2016) to 1.36 (2012).
b. I would choose the AUD over the SGD

5. AUD to MYR - AUD Weaker. 2.9643 from 2.9983 from 2.9891
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Weaker. 1.1630 from 1.1628 from 1.1410
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Stronger. 7.8491 from 7.8514 from 7.8497
a. 52 week range is 7.7452 - 7.8530
b. Will they remove the peg to the USD during the next crisis?
c. Will China ask HK to depeg from the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Weaker. 4.1110 from 4.0931 from 4.1046
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=60

9. USD to SGD:- SGD Weaker; 1.3709 from 1.3655 from 1.3728
a. High 1.70 (2004); Low 1.20 (2011)
b. Am very uncomfortable holding the currency of a small country
viewtopic.php?f=32&t=136&start=100

10. USD to CNY:- CNY Weaker; 6.8382 from 6.8058 from 6.8777
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Stronger; 1.2966 from 1.2839 from 1.2731
a. Brexit; Politics;
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Stronger; 5.3301 from 5.2563 from 5.2249

13. Dollar Index - USD Weaker. 94.94 from 95.15 from 96.29
viewtopic.php?f=32&t=7616&start=60


Others

Sentiment - Complacent?

Headwinds
i) Derivatives (US$700t);
ii) Debts (US$237t, 318% GDP);
iii) Corporate Debt (US$50t); US Corp Debts (US$6t)
iv) Institutional Investors (US$0.5t)
v) ETFs AUM (US$3.4t)
vi) Bitcoin (US$200b)
vii) US Pension Short-Fall: US$385b
viii) NPLs at European Banks: EUR$1t
ix) China's Bond Market: US$12t (third largest)

Tailwinds
a. Low Interest Rates
b. Cash Sidelines (US$50t)
c. QE US$18t: US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t)
d. Negative Yield Bonds (US$6t from US$10t)
e. US Foreign Funds Repatriation (US$2.5t)
f. Cash US Corporations (US$1t)
g. Cash Japanese Corporations (US$2t)
h. Buybacks: US$120b 2Q, 2017 (-10% qoq; -6% yoy); US$3.2t since 2009; i. US Household Net Worth (US$90t)
j. EM Consumption
k. Private Client Cash Levels as a % of Total Assets: Record Low (10.4%)
l. Institutional Investors: lowest levels of cash for past 8 years; 1/3 high in 2016
m. Private Equities: US$600b Cash

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

HK Properties
1. Vacancy tax
2. 9000 vacant apartments
3. CLSA, UBS and Citi - Prices may 10% to 15% by end 2019
4. Rising Interest rates
5. Slowing Economy
6. Depreciating Yuan
7. Weak Stock Markets

Spore Properties
1. 60,000 Units of Supply (7 years Supply of 6500 Homes per year )


Yield on 10 Year US Treasuries - Higher; 2.86% from 2.81% last week from 2.86% two weeks ago
a. Low 1.32%; High 3.12%
b. Resistance 3.3%

Yield on 2 Year Treasuries - Higher; 2.63% from 2.62% from 2.61%

Interest Rates:-
a. Expecting US Interest Rates to remain low and will only rise slowly over next 2 years
b. About US$6t or about 15% of the world’s bonds have negative yields
c. Two more US rate hikes in 2018? Two in 2019?
viewtopic.php?f=16&t=7319&start=70

JNK (SPDR Barclays High Yield Bond ETF) - Flat; 36.00 from 36.01 from 35.86

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Flat; 86.31 from 86.35 from 85.94

Baltic Dry Index - Lower; 1614 from 1709 from 1720; Low 290; High 2330 (2013)


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. 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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It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118522
Joined: Wed May 07, 2008 9:28 am

Re: Winston's Investment Ideas 04 (Oct 15 - Dec 18)

Postby winston » Mon Sep 10, 2018 7:10 am

TOL @ Sep 9, 2018

TIME-TO-SELL.jpg


Selling Into Window Dressing?

We will be hitting Window Dressing soon and I think that it may be a good idea to sell into any rallies.

This trade friction between America and the rest of the world, cannot be good for the world economy.

Business and Investors wants stability to plan and invest. With what's happening, nobody will be spending or investing for the future, for the time being.

As Assets depreciate, there will also be a Liquidity Cruch and the baby will be thrown out with the bath tub water. Thereafter, there could be some money-printing again by the Central Banksters.

However, before we reach that stage, there could be a lot of pain as Equities, Currencies, Commodities, Real Estate etc. plunge.

It's time to be in "Risk Management" mode. Whenever, there are rallies, it's time to sell. It's no longer time to buy any dips anymore.

I need to remind myself to lower my exposure to Equities to about 15% before the plunge. I'm still at 36% and will need to step up on my selling over the next few weeks.


Market Risk Indicators
1. Euphoria: 6 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;
2. Credit Problems: 7 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds
3. Recession: 7 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?
4. Liquidity: 7 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?;
5. Inverted Yield: 8 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020
6. Valuation; 8 (Safe 1: PE15; Danger 10: PE30) - PE S&P 24, Nadsaq 26; Revenue; USD; Tax Reform; Deregulation
7. Geopolitical Issues: 7 (Peaceful: 1; War: 10) - NKorea; Syria; Iran; Qatar, Afghanistan; South China Sea; Europe; Venezuela; Russia
Total: 50 out of 70 (71%); (Safe: 50%; Danger: 80%)


Commodities: Risk-Off (Data from Commodities Live)

1. WTI Oil - Lower. US$67.77 from US$69.91 last week from US$68.54 two weeks ago; Support: US$58; US$34; Resistance: US$75, US$105
a. Rebalancing in 3Q 2018?
b. Stockpiles: 2.5b barrels;
c. US SPR: 679m barrels (33 days); To sell 190m over 8 years.
d. US imports 8m bpd (Total Demand of India and Japan combined)
e. US: Capex: US$1t; > 4000 "Drilled but Uncompleted" (DUC) Wells?
f. US: Active rigs currently at 1057 vs 316 in May 2016
g. China (4th largest producer; largest importer) - Reserve life: 10 to 6 years
h. China: Ban on Petrolchemical Cars in 5-10 years ? Quotas?
i. IEA: Lowest amount of new discoveries in 2016; Supply shortage in 2020?
j. Saudi Aramco's IPO 2019?; Incentive to push prices up; Saudi -200k bpd
k. China: SPR reached 51/90 days; 2018 Imports to decrease?
l. Libya: -850k bpd; Brazil +200k bpd; Canada +200k bpd; Nigeria -300k bpd; Iraq +500k bpd; Kurdistan -350k bpd; US +1m bpd (2019); Russia +200k
m. US Fracking: +0.5m bpd US$60; +1m bpd US$70; +1m bpd 2018
n. Venezeula: -1.2m bpd; Worst Case -2m bpd supply (50% cut by 2020)?
o. Trade Wars will reduce demand for Oil?
p. Iran: -700k bpd; On sanctions: -1m bpd?
q. IEA expects oil prices to dip in 2H as Shale Supply increases
r. OPEC cut 1.8m bpd; Increasing 1m bpd in 2H 2018? +0.5m in 2019?
viewtopic.php?f=33&t=7550&start=210

2. Gold - Lower. US$1201 from US$1207 from US$1212
Support: $1150; $1050; Resistance: $1400
a. Global 33,000 tons; US 8000t; China 5000t; IMF 3000t; Germany 3000t
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
g. Gold only occupies 0.03% of US investments. In 1981, it was 8%
h: India Demand: Since 2010, down each year. 2017 (700t); 2020 (900t)
i. China Demand: Since 2013, decreased 33% from 940t to 630t last year
j. Global Demand: 1Q 2018: -7%; US & European ETFs buyers; China weak
k. Central Banks: +20% yoy; Strong Russian buying
l. U.S. government holds 261.5m ounces at book value of US$42m
m. China: Reserves 160m oz; 400m oz ground; Output decreased 6% yoy
n. US: Reserve 260m oz
viewtopic.php?f=33&t=7589&p=202084#p202084

3. Silver - Lower. US$14.19 from US$14.58 from US$14.79
a. Support: US$16.10; US$15.20; Resistance: US$18.50; High: US$49
b. LED chips, Cell Phones, Nuclear Reactors, Photography, Solar Panels, RFID Chips, Semiconductors, Water Purification, Data Storage, Antibacterial products, Silver Coins, Jewelery
c. Demand: 1.2b ounces in 2015;
d. Supply: 0.9b ounces in 2015.
e. 4th year of deficit
f. 35% (7700 metric tons) for Electronics
g. 25% (5500 metric tons) for Bullions & Coins
h. India imports more Silver than the US
i. JPM has 67m ounces
j. High Gold/Siver Ratio: 50 t0 70; Currently 76, 50% higher than average
k, Production declining
l. Demand: 40% Investments / Speculation; 60% Industrial
m. About 1b ounces stored in China; 1 Year Production
n. How will US tariffs on Solar Panels affect silver prices?
viewtopic.php?f=33&t=7589&p=202084#p202084

4. Platinum - Lower; US$782 from US$788 from US$791
a. 28% for jewelry
b. 42% for diesel catalytic converters
c. Remainder for other industrial applications
d. Huge discount to Gold
e. Sixth year of deficit
f. 10 times more gold than platinum
g. Costlier to mine than gold as located deeper
h. Diesel cars losing market share
i. Strong demand from vehicles destroyed by Hurricanes (1m cars)

5. Zinc - Lower; US$2433 from US$2462 from US$2533
a. Global Demand: +14% pa for past 4 years
b. Supply: 13.7 tons; Supply Deficit 1.2m tons;
b. Breakpoint: High US$4400 (2007); Low $1600 (Jan 2016)
d. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer
e. Zinc inventories at the LME have dropped to their lowest level since 2009
f. Vehicle: DB Base Metal (Zinc, Aluminum & Copper)
viewtopic.php?f=33&t=367&start=208.

6. Copper - Lower; US$2.62 from US$2.66 from US$2.69
a. Higher inventories at LME
b. China - 50% of global consumption
c. China - Lower Power Grid demand
viewtopic.php?f=33&t=5598&p=215285#p215285

7. Aluminium - Lower; US$2073 from US$2120 from US$2093
a. Sanctions on Rusal has removed 7% of world's supply

8. Uranium - Flat; US$26.50 from US$26.20 from US$26.10
a. Breakeven: US$40 per lb
b. Range: $20 (2005) to $136 (2008); 580% rise in two years
c. Global Supply: 158m lbs pa; 15% from decommisioned weapons
d. Global Demand: 190m lbs pa to 300m lbs pa (2030)
e. Stockpile: 1b lbs (till 2022?) ; Companies normally store 5 years supply
f. Japanese Demand: 3m lbs pa; Starting 21/54 reactors? Currently, only 9
g. No. of Nuclear plants: +8 pa for next 20 yrs, 440 to 595; Current 452
h. 56 new reactors being built; 481 planned;
i. China: 35 existing plants; Building 21; To build 177 more?
j. India: 22 existing nuclear plants; Building 5; To build 64 more?
k. 25% long-term contracts expiring in 2017-18; 75% between 2017-25
l. 200 European nuclear reactors will be shut down over the next 25 years
m. France: Reduce nuclear to 50% from 75% by 2025 and closure of 20
n. Long term contracts being locked at US$40, twice spot rates
o. Kazakhtan reducing supply by 10% (40% of global production)
p. Competition: Natural Gas, Solar, Wind, Wave etc
q. US: Nuclear - 20% of electricity; 99/447 Plants; 25% drop by 2025; Two Year Moratorium on Closure
r. Supply: 50k tons; Demand: 68k tons; 2k tons enriched for weapons
s. 1b pounds to be purchased for long-term contracts over next 5-10 years
t. Average reactor needs 600,000 to 700,000 pounds to run for a year
u. US: 100/420 reactors; Importing 95% uranium; Demand 50m lbs pa
v. Uranium from Sea Water; Viable at US$180/kg (US$80/lbs); Timing?
w. Glut at 15m pounds (23 reactors for 1 year)
x. Cameco mothballed McArthur River & Key Lake; 10% world's supply
y. Kazatomprom, world's second largest, cut production by 20% for 3 yrs
z. Russia banning export of Uranium?

8. Cobalt; Lower; $28.35 ($62,500/t) from $29.60 ( $65250/t) from $29.26 ($64500/t);
Low $10; High US$43
a. Electric Vehicles (8 kg), Smartphones (8 grams), Jet Engines; Gigafactories
b. Congo: Supplies >50% world's supply; Child Labor?
c. Demand: 8% to 10% pa
d. Shortage: 2022 and beyond
e. Cobalt Reduced EV is 5-10 years away? Musk: Reducing Cobalt in Tesla;
f. 2018: 1m EVs (10k tonnes); 2027: 27m ( 27m tonnes)

9. If there's a crash, Commodities would not be spared
10. The High USD is not good for Commodities


Equities - Risk-Off ( Data as of Saturday every week )

1. US Equities - Lower. 2872 from 2902 last week from 2875 two weeks ago
a. Support 2740; 2560; Resistance: 3000; Fwd PE 16
b. No Trade
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Lower. 26973 from 27889 from 27672
a. Support: 26900; 25400; Resistance: 29200; 31600;
b. No Trade
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Lower. 2702 from 2725 from 2729
a. Support: 2600; 2450; Resistance 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Lower; 3134 from 3214 from 3213
a. Resistance 3850
b. No Trade
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Lower. 22307 from 22865 from 22602
a. Forward PE 13
b. Resistance 24,000
c. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Lower; 1799 from 1820 from 1809
a. Bought MUI
viewtopic.php?f=10&t=6292&start=30



Currencies- Mixed (Data from XE.com)

1. USD to JPY - JPY Weaker; 111.03 from 110.75 last week from 111.23 two weeks ago
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Why is it a Safe Haven ?
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger; 3.0092 from 2.9983 from 2.9899
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Weaker; 0.7106 from 0.7211 from 0.7324
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. I need to diversify my AUD into another currency
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Weaker. 0.9803 from 0.9886 from 0.9999
a. The range is 0.98 (2016) to 1.36 (2012).
b. I would choose the AUD over the SGD

5. AUD to MYR - AUD Weaker. 2.9498 from 2.9643 from 2.9983
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Weaker. 1.1564 from 1.1630 from 1.1628
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Weaker. 7.8518 from 7.8491 from 7.8514
a. 52 week range is 7.7452 - 7.8530
b. Will they remove the peg to the USD during the next crisis?
c. Will China ask HK to depeg from the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Weaker. 4.1514 from 4.1110 from 4.0931
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=60

9. USD to SGD:- SGD Weaker; 1.3792 from 1.3709 from 1.3655
a. High 1.70 (2004); Low 1.20 (2011)
b. Am very uncomfortable holding the currency of a small country
viewtopic.php?f=32&t=136&start=100

10. USD to CNY:- CNY Weaker; 6.8435 from 6.8382 from 6.8058
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Weaker; 1.2917 from 1.2966 from 1.2839
a. Brexit; Politics;
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Stronger; 5.3604 from 5.3301 from 5.2563

13. Dollar Index - USD Weaker. 95.34 from 94.94 from 95.15
viewtopic.php?f=32&t=7616&start=60


Others

Sentiment - Complacent?

Headwinds
i) Derivatives (US$700t);
ii) Debts (US$237t, 318% GDP);
iii) Corporate Debt (US$50t); US Corp Debts (US$6t)
iv) Institutional Investors (US$0.5t)
v) ETFs AUM (US$3.4t)
vi) Bitcoin (US$200b)
vii) US Pension Short-Fall: US$385b
viii) NPLs at European Banks: EUR$1t
ix) China's Bond Market: US$12t (third largest)

Tailwinds
a. Low Interest Rates
b. Cash Sidelines (US$50t)
c. QE US$18t: US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t)
d. Negative Yield Bonds (US$6t from US$10t)
e. US Foreign Funds Repatriation (US$2.5t)
f. Cash US Corporations (US$1t)
g. Cash Japanese Corporations (US$2t)
h. Buybacks: US$120b 2Q, 2017 (-10% qoq; -6% yoy); US$3.2t since 2009; i. US Household Net Worth (US$90t)
j. EM Consumption
k. Private Client Cash Levels as a % of Total Assets: Record Low (10.4%)
l. Institutional Investors: lowest levels of cash for past 8 years; 1/3 high in 2016
m. Private Equities: US$600b Cash

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

HK Properties
1. Vacancy tax
2. 9000 vacant apartments
3. CLSA, UBS and Citi - Prices may 10% to 15% by end 2019
4. Rising Interest rates
5. Slowing Economy
6. Depreciating Yuan
7. Weak Stock Markets

Spore Properties
1. 60,000 Units of Supply (7 years Supply of 6500 Homes per year )


Yield on 10 Year US Treasuries - Higher; 2.94% from 2.86% last week from 2.81% two weeks ago
a. Low 1.32%; High 3.12%
b. Resistance 3.3%

Yield on 2 Year Treasuries - Higher; 2.70% from 2.63% from 2.62%

Interest Rates:-
a. Expecting US Interest Rates to remain low and will only rise slowly over next 2 years
b. About US$6t or about 15% of the world’s bonds have negative yields
c. Two more US rate hikes in 2018? Two in 2019?
viewtopic.php?f=16&t=7319&start=70

JNK (SPDR Barclays High Yield Bond ETF) - Lower; 35.76 from 36.00 from 36.01

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 85.70 from 86.31 from 86.35

Baltic Dry Index - Lower; 1484 from 1614 from 1709; Low 290; High 2330 (2013)


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. Use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments
You do not have the required permissions to view the files attached to this post.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118522
Joined: Wed May 07, 2008 9:28 am

Re: Winston's Investment Ideas 04 (Oct 15 - Dec 18)

Postby winston » Sun Sep 16, 2018 9:26 am

TOL @ Sep 16, 2018

Cash.jpg


Time To Raise Some Cash?

The markets spiked up on news that the US has invited China, to discuss the Trade Friction.

In addition, we are now touching Window Dressing time.

Therefore, the markets would probably be strong over the next two weeks.

And as mentioned, I will probably be selling some of my Equities over the next two weeks, to raise some Cash.

I'm not expecting the US and China to come to any agreement soon, unless Trump thinks that an agreement with China would help the Republicans at the Mid-Term elections.

So I need to remind myself to do the following ASAP:-
1. Decrease my current exposure to Equities of about 36%, to about 15%.
2. Increase my exposure to "USD, HKD & Gold" to about 40% from the current 17%.
3. Sell some Real Estate (the process can take about 4-6 months)

I have been too complacent and I need to go into "Risk Management" mode ASAP.

When the fire starts, it would probably be too late to start running to the emergency exit. I need to start making my way to the emergency exit now.


Market Risk Indicators
1. Euphoria: 7 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;
2. Credit Problems: 8 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;
3. Recession: 8 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;
4. Liquidity: 7 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;
5. Inverted Yield: 8 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020
6. Valuation; 8 (Safe 1: PE15; Danger 10: PE30) - PE S&P 24, Nadsaq 26; Revenue; USD; Tax Reform; Deregulation
7. Geopolitical Issues: 7 (Peaceful: 1; War: 10) - NKorea; Syria; Iran; Qatar, Afghanistan; South China Sea; Europe; Venezuela; Russia
Total: 52 out of 70 (74%); (Safe: 50%; Danger: 80%)


Commodities: Risk-Off (Data from Commodities Live)

1. WTI Oil - Higher. US$69.00 from US$67.77 last week from US$69.91 two weeks ago; Support: US$58; US$34; Resistance: US$75, US$105
a. Rebalancing in 3Q 2018?
b. Stockpiles: 2.5b barrels;
c. US SPR: 679m barrels (33 days); To sell 190m over 8 years.
d. US imports 8m bpd (Total Demand of India and Japan combined)
e. US: Capex: US$1t; > 4000 "Drilled but Uncompleted" (DUC) Wells?
f. US: Active rigs currently at 1057 vs 316 in May 2016
g. China (4th largest producer; largest importer) - Reserve life: 10 to 6 years
h. China: Ban on Petrolchemical Cars in 5-10 years ? Quotas?
i. IEA: Lowest amount of new discoveries in 2016; Supply shortage in 2020?
j. Saudi Aramco's IPO 2019?; Incentive to push prices up; Saudi -200k bpd
k. China: SPR reached 51/90 days; 2018 Imports to decrease?
l. Libya: -850k bpd; Brazil +200k bpd; Canada +200k bpd; Nigeria -300k bpd; Iraq +500k bpd; Kurdistan -350k bpd; US +1m bpd (2019); Russia +200k
m. US Fracking: +0.5m bpd US$60; +1m bpd US$70; +1m bpd 2018
n. Venezeula: -1.2m bpd; Worst Case -2m bpd supply (50% cut by 2020)?
o. Trade Wars will reduce demand for Oil?
p. Iran: -1.3m700k bpd; On sanctions: -1m bpd?
q. IEA expects oil prices to dip in 2H as Shale Supply increases
r. OPEC cut 1.8m bpd; Increasing 1m bpd in 2H 2018? +0.5m in 2019?
viewtopic.php?f=33&t=7550&start=210

2. Gold - Lower. US$1198 from US$1201 from US$1207
Support: $1150; $1050; Resistance: $1400
a. Global 33,000 tons; US 8000t; China 5000t; IMF 3000t; Germany 3000t
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
g. Gold only occupies 0.03% of US investments. In 1981, it was 8%
h: India Demand: Since 2010, down each year. 2017 (700t); 2020 (900t)
i. China Demand: Since 2013, decreased 33% from 940t to 630t last year
j. Global Demand: 1Q 2018: -7%; US & European ETFs buyers; China weak
k. Central Banks: +20% yoy; Strong Russian buying
l. U.S. government holds 261.5m ounces at book value of US$42m
m. China: Reserves 160m oz; 400m oz ground; Output decreased 6% yoy
n. US: Reserve 260m oz
viewtopic.php?f=33&t=7589&p=202084#p202084

3. Silver - Lower. US$14.09 from US$14.19 from US$14.58
a. Support: US$16.10; US$15.20; Resistance: US$18.50; High: US$49
b. LED chips, Cell Phones, Nuclear Reactors, Photography, Solar Panels, RFID Chips, Semiconductors, Water Purification, Data Storage, Antibacterial products, Silver Coins, Jewelery
c. Demand: 1.2b ounces in 2015;
d. Supply: 0.9b ounces in 2015.
e. 4th year of deficit
f. 35% (7700 metric tons) for Electronics
g. 25% (5500 metric tons) for Bullions & Coins
h. India imports more Silver than the US
i. JPM has 67m ounces
j. High Gold/Siver Ratio: 50 t0 70; Currently 76, 50% higher than average
k, Production declining
l. Demand: 40% Investments / Speculation; 60% Industrial
m. About 1b ounces stored in China; 1 Year Production
n. How will US tariffs on Solar Panels affect silver prices?
viewtopic.php?f=33&t=7589&p=202084#p202084

4. Platinum - Higher; US$795 from US$782 from US$788
a. 28% for jewelry
b. 42% for diesel catalytic converters
c. Remainder for other industrial applications
d. Huge discount to Gold
e. Sixth year of deficit
f. 10 times more gold than platinum
g. Costlier to mine than gold as located deeper
h. Diesel cars losing market share
i. Strong demand from vehicles destroyed by Hurricanes (1m cars)

5. Zinc - Lower; US$2310 from US$2433 from US$2462
a. Global Demand: +14% pa for past 4 years
b. Supply: 13.7 tons; Supply Deficit 1.2m tons;
b. Breakpoint: High US$4400 (2007); Low $1600 (Jan 2016)
d. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer
e. Zinc inventories at the LME have dropped to their lowest level since 2009
f. Vehicle: DB Base Metal (Zinc, Aluminum & Copper)
viewtopic.php?f=33&t=367&start=208.

6. Copper - Lower; US$2.61 from US$2.62 from US$2.66
a. Higher inventories at LME
b. China - 50% of global consumption
c. China - Lower Power Grid demand
viewtopic.php?f=33&t=5598&p=215285#p215285

7. Aluminium - Lower; US$2037 from US$2073 from US$2120
a. Sanctions on Rusal has removed 7% of world's supply

8. Uranium - Higher; US$27.20 from US$26.50 from US$26.20
a. Breakeven: US$40 per lb
b. Range: $20 (2005) to $136 (2008); 580% rise in two years
c. Global Supply: 158m lbs pa; 15% from decommisioned weapons
d. Global Demand: 190m lbs pa to 300m lbs pa (2030)
e. Stockpile: 1b lbs (till 2022?) ; Companies normally store 5 years supply
f. Japanese Demand: 3m lbs pa; Starting 21/54 reactors? Currently, only 9
g. No. of Nuclear plants: +8 pa for next 20 yrs, 440 to 595; Current 452
h. 56 new reactors being built; 481 planned;
i. China: 35 existing plants; Building 21; To build 177 more?
j. India: 22 existing nuclear plants; Building 5; To build 64 more?
k. 25% long-term contracts expiring in 2017-18; 75% between 2017-25
l. 200 European nuclear reactors will be shut down over the next 25 years
m. France: Reduce nuclear to 50% from 75% by 2025 and closure of 20
n. Long term contracts being locked at US$40, twice spot rates
o. Kazakhtan reducing supply by 10% (40% of global production)
p. Competition: Natural Gas, Solar, Wind, Wave etc
q. US: Nuclear - 20% of electricity; 99/447 Plants; 25% drop by 2025; Two Year Moratorium on Closure
r. Supply: 50k tons; Demand: 68k tons; 2k tons enriched for weapons
s. 1b pounds to be purchased for long-term contracts over next 5-10 years
t. Average reactor needs 600,000 to 700,000 pounds to run for a year
u. US: 100/420 reactors; Importing 95% uranium; Demand 50m lbs pa
v. Uranium from Sea Water; Viable at US$180/kg (US$80/lbs); Timing?
w. Glut at 15m pounds (23 reactors for 1 year)
x. Cameco mothballed McArthur River & Key Lake; 10% world's supply
y. Kazatomprom, world's second largest, cut production by 20% for 3 yrs
z. Russia banning export of Uranium?

8. Cobalt; Higher; $28.46 ($62,750/t) from $28.35 ($62,500/t) from $29.60 ( $65250/t); Low $10; High US$43
a. Electric Vehicles (8 kg), Smartphones (8 grams), Jet Engines; Gigafactories
b. Congo: Supplies >50% world's supply; Child Labor?
c. Demand: 8% to 10% pa
d. Shortage: 2022 and beyond
e. Cobalt Reduced EV is 5-10 years away? Musk: Reducing Cobalt in Tesla;
f. 2018: 1m EVs (10k tonnes); 2027: 27m ( 27m tonnes)

9. If there's a crash, Commodities would not be spared
10. The High USD is not good for Commodities


Equities - Risk-On ( Data as of Saturday every week )

1. US Equities - Higher. 2906 from 2872 last week from 2902 two weeks ago
a. Support 2740; 2560; Resistance: 3000; Fwd PE 16
b. No Trade
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Higher. 27286 from 26973 from 27889
a. Support: 26900; 25400; Resistance: 29200; 31600;
b. No Trade
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Lower. 2682 from 2702 from 2725
a. Support: 2600; 2450; Resistance 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Higher; 3161 from 3134 from 3214
a. Resistance 3850
b. No Trade
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Higher. 23095 from 22307 from 22865
a. Forward PE 13
b. Resistance 24,000
c. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Higher; 1804 from 1799 from 1820
a. Bought MUI
viewtopic.php?f=10&t=6292&start=30



Currencies- Mixed (Data from XE.com)

1. USD to JPY - JPY Weaker; 111.83 from 111.03 last week from 110.75 two weeks ago
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Why is it a Safe Haven ?
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger; 3.0225 from 3.0092 from 2.9983
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.7197 from 0.7106 from 0.7211
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. I need to diversify my AUD into another currency
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Stronger. 0.9855 from 0.9803 from 0.9886
a. The range is 0.98 (2016) to 1.36 (2012).
b. I would choose the AUD over the SGD

5. AUD to MYR - AUD Weaker. 2.9770 from 2.9783 from 2.9498
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Stronger. 1.1697 from 1.1564 from 1.1630
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Weaker. 7.8472 from 7.8518 from 7.8491
a. 52 week range is 7.7452 - 7.8530
b. Will they remove the peg to the USD during the next crisis?
c. Will China ask HK to depeg from the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Stronger. 4.1389 from 4.1514 from 4.1110
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9. USD to SGD:-

9. USD to SGD:- SGD Stronger; 1.3693 from 1.3792 from 1.3709
a. High 1.70 (2004); Low 1.20 (2011)
b. Am very uncomfortable holding the currency of a small country
viewtopic.php?f=32&t=136&start=100

10. USD to CNY:- CNY Weaker; 6.8524 from 6.8435 from 6.8382
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Stronger; 1.3119 from 1.2917 from 1.2966
a. Brexit; Politics;
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Stronger; 5.4299 from 5.3604 from 5.3301

13. Dollar Index - USD Weaker. 94.51 from 95.34 from 94.94
viewtopic.php?f=32&t=7616&start=60


Others

Sentiment - Complacent?

Headwinds
i) Derivatives (US$700t);
ii) Debts (US$237t, 318% GDP); Including Unfunded Pension Liabilities: US$500t
iii) Corporate Debt (US$50t); US Corp Debts (US$6t)
iv) Institutional Investors (US$0.5t)
v) ETFs AUM (US$3.4t)
vi) Bitcoin (US$200b)
vii) US Pension Short-Fall: US$385b
viii) NPLs at European Banks: EUR$1t
ix) China's Bond Market: US$12t (third largest)

Tailwinds
a. Low Interest Rates
b. Cash Sidelines (US$50t)
c. QE US$18t: US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t)
d. Negative Yield Bonds (US$6t from US$10t)
e. US Foreign Funds Repatriation (US$2.5t)
f. Cash US Corporations (US$1t)
g. Cash Japanese Corporations (US$2t)
h. Buybacks: US$120b 2Q, 2017 (-10% qoq; -6% yoy); US$3.2t since 2009; i. US Household Net Worth (US$90t)
j. EM Consumption
k. Private Client Cash Levels as a % of Total Assets: Record Low (10.4%)
l. Institutional Investors: lowest levels of cash for past 8 years; 1/3 high in 2016
m. Private Equities: US$600b Cash

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

HK Properties
1. Vacancy tax
2. 9000 vacant apartments
3. CLSA, UBS and Citi - Prices may 10% to 15% by end 2019
4. Rising Interest rates
5. Slowing Economy
6. Depreciating Yuan
7. Weak Stock Markets

Spore Properties
1. 60,000 Units of Supply (7 years Supply of 6500 Homes per year )

Yield on 10 Year US Treasuries - Higher; 3.00 % from 2.94% last week from 2.86% two weeks ago
a. Low 1.32%; High 3.12%
b. Resistance 3.3%

Yield on 2 Year Treasuries - Higher; 2.78% from 2.70% from 2.63%

Interest Rates:-
a. Expecting US Interest Rates to slowly rise over next 2 years
b. About US$6t or about 15% of the world’s bonds have negative yields
c. Two more US rate hikes in 2018? Two in 2019?
d. Argentina's Intertest Rate: 60%
e. Turkey's Interest Rate: 24%
f. Ukraine's Interest rate: 18%
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Higher; 36.02 from 35.76 from 36.00

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 86.33 from 85.70 from 86.31

Baltic Dry Index - Lower; 1382 from 1484 from 1614; Low 290; High 2330 (2013)


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. 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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User avatar
winston
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Re: Winston's Investment Ideas 04 (Oct 15 - Dec 18)

Postby winston » Sun Sep 23, 2018 9:58 am

TOL @ Sep 23, 2018

Euphoria.png


How Long Can This Euphoria Last?

The US markets are touching record high.

The HK market has gone up 1300 points in 1.5 weeks.

The China market has gone up 4.5% in the past 4 days.

The Japanese market has gone up 1500 points in 2 weeks.

Commodities have been rallying the past few days as the USD has been dropping.

So will long can this euphoria continue?

Intutively, I think that the rally over the past two weeks, is due to 3Q Window Dressing.

And if I'm correct, this current rally can last only for another week or so.

In addition, most of the US stocks would be entering their "black-out" period for Buy-Backs, during the first week of October. That means the US markets would be losing the strong tail-wind of Corporate Buy-Backs soon.

Therefore, I'm still trying to sell into any rallies.

BTW, I'm starting to think that I will not be able to achieve my goal of reducing my exposure to Equities to about 15% before the next crash or be able to raise my "USD/HKD/Gold" exposure to about 45%.

Therefore, I may need to hedge my current exposures, by buying some leveraged Inverse ETFs or Bear Puts denominated in USD and HKD. The time to do this would probably be somewhere in Mid October, 2018. Will wait for the set-up over the next two weeks.

At the same time, I'm fully aware that I could be wrong and that this rally could have some legs, especially if the US-China Trade Conflict can be sorted out, although very unlikely.

We are also be touching the Third Year of the Presidential Cycle soon and historically, that has been a very good time for stocks.

On the horizon, we have the following:-
1. Window Dressing until Sep 30
2. FOMC - Sep 25 & 26; Expecting 25bps rate hike


Market Risk Indicators
1. Euphoria: 7 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;
2. Credit Problems: 8 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;
3. Recession: 8 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;
4. Liquidity: 7 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;
5. Inverted Yield: 8 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020
6. Valuation; 8 (Safe 1: PE15; Danger 10: PE30) - PE S&P 24, Nadsaq 26; Revenue; USD; Tax Reform; Deregulation
7. Geopolitical Issues: 7 (Peaceful: 1; War: 10) - NKorea; Syria; Iran; Qatar, Afghanistan; South China Sea; Europe; Venezuela; Russia
Total: 52 out of 70 (74%); (Safe: 50%; Danger: 80%)


Commodities: Risk-On (Data from Commodities Live)

1. WTI Oil - Higher. US$70.72 from US$69.00 last week from US$67.77 two weeks ago; Support: US$58; US$34; Resistance: US$75, US$105
a. Rebalancing in 3Q 2018?
b. Stockpiles: 2.5b barrels;
c. US SPR: 679m barrels (33 days); To sell 190m over 8 years.
d. US imports 8m bpd (Total Demand of India and Japan combined)
e. US: Capex: US$1t; > 4000 "Drilled but Uncompleted" (DUC) Wells?
f. US: Active rigs currently at 1057 vs 316 in May 2016
g. China (4th largest producer; largest importer) - Reserve life: 10 to 6 years
h. China: Ban on Petrolchemical Cars in 5-10 years ? Quotas?
i. IEA: Lowest amount of new discoveries in 2016; Supply shortage in 2020?
j. Saudi Aramco's IPO 2019?; Incentive to push prices up; Saudi -200k bpd
k. China: SPR reached 51/90 days; 2018 Imports to decrease?
l. Libya: -850k bpd; Brazil +200k bpd; Canada +200k bpd; Nigeria -300k bpd; Iraq +500k bpd; Kurdistan -350k bpd; US +1m bpd (2019); Russia +200k
m. US Fracking: +0.5m bpd US$60; +1m bpd US$70; +1m bpd 2018
n. Venezeula: -1.2m bpd; Worst Case -2m bpd supply (50% cut by 2020)?
o. Trade Wars will reduce demand for Oil?
p. Iran: -900k bpd; On sanctions: -1.3m bpd?
q. IEA expects oil prices to dip in 2H as Shale Supply increases
r. OPEC cut 1.8m bpd; Increasing 1m bpd in 2H 2018? +0.5m in 2019?
viewtopic.php?f=33&t=7550&start=210

2. Gold - Higher. US$1203 from US$1198 from US$1201
Support: $1150; $1050; Resistance: $1400
a. Global 33,000 tons; US 8000t; China 5000t; IMF 3000t; Germany 3000t
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
g. Gold only occupies 0.03% of US investments. In 1981, it was 8%
h: India Demand: Since 2010, down each year. 2017 (700t); 2020 (900t)
i. China Demand: Since 2013, decreased 33% from 940t to 630t last year
j. Global Demand: 1Q 2018: -7%; US & European ETFs buyers; China weak
k. Central Banks: +20% yoy; Strong Russian buying
l. U.S. government holds 261.5m ounces at book value of US$42m
m. China: Reserves 160m oz; 400m oz ground; Output decreased 6% yoy
n. US: Reserve 260m oz
viewtopic.php?f=33&t=7589&p=202084#p202084

3. Silver - Higher. US$14.31 from US$14.09 from US$14.19
a. Support: US$16.10; US$15.20; Resistance: US$18.50; High: US$49
b. LED chips, Cell Phones, Nuclear Reactors, Photography, Solar Panels, RFID Chips, Semiconductors, Water Purification, Data Storage, Antibacterial products, Silver Coins, Jewelery
c. Demand: 1.2b ounces in 2015;
d. Supply: 0.9b ounces in 2015.
e. 4th year of deficit
f. 35% (7700 metric tons) for Electronics
g. 25% (5500 metric tons) for Bullions & Coins
h. India imports more Silver than the US
i. JPM has 67m ounces
j. High Gold/Siver Ratio: 50 t0 70; Currently 76, 50% higher than average
k, Production declining
l. Demand: 40% Investments / Speculation; 60% Industrial
m. About 1b ounces stored in China; 1 Year Production
n. How will US tariffs on Solar Panels affect silver prices?
viewtopic.php?f=33&t=7589&p=202084#p202084

4. Platinum - Higher; US$829 from US$795 from US$782
a. 28% for jewelry
b. 42% for diesel catalytic converters
c. Remainder for other industrial applications
d. Huge discount to Gold
e. Sixth year of deficit
f. 10 times more gold than platinum
g. Costlier to mine than gold as located deeper
h. Diesel cars losing market share
i. Strong demand from vehicles destroyed by Hurricanes (1m cars)

5. Zinc - Higher; US$2525 from US$2310 from US$2433
a. Global Demand: +14% pa for past 4 years
b. Supply: 13.7 tons; Supply Deficit 1.2m tons;
b. Breakpoint: High US$4400 (2007); Low $1600 (Jan 2016)
d. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer
e. Zinc inventories at the LME have dropped to their lowest level since 2009
f. Vehicle: DB Base Metal (Zinc, Aluminum & Copper)
viewtopic.php?f=33&t=367&start=208.

6. Copper - Higher; US$2.85 from US$2.61 from US$2.62
a. Higher inventories at LME
b. China - 50% of global consumption
c. China - Lower Power Grid demand
viewtopic.php?f=33&t=5598&p=215285#p215285

7. Aluminium - Higher; US$2088 from US$2037 from US$2073
a. Sanctions on Rusal has removed 7% of world's supply

8. Uranium - Flat; US$27.45 from US$27.20 from US$26.50
a. Breakeven: US$40 per lb
b. Range: $20 (2005) to $136 (2008); 580% rise in two years
c. Global Supply: 158m lbs pa; 15% from decommisioned weapons
d. Global Demand: 190m lbs pa to 300m lbs pa (2030)
e. Stockpile: 1b lbs (till 2022?) ; Companies normally store 5 years supply
f. Japanese Demand: 3m lbs pa; Starting 21/54 reactors? Currently, only 9
g. No. of Nuclear plants: +8 pa for next 20 yrs, 440 to 595; Current 452
h. 56 new reactors being built; 481 planned;
i. China: 35 existing plants; Building 21; To build 177 more?
j. India: 22 existing nuclear plants; Building 5; To build 64 more?
k. 25% long-term contracts expiring in 2017-18; 75% between 2017-25
l. 200 European nuclear reactors will be shut down over the next 25 years
m. France: Reduce nuclear to 50% from 75% by 2025 and closure of 20
n. Long term contracts being locked at US$40, twice spot rates
o. Kazakhtan reducing supply by 10% (40% of global production)
p. Competition: Natural Gas, Solar, Wind, Wave etc
q. US: Nuclear - 20% of electricity; 99/447 Plants; 25% drop by 2025; Two Year Moratorium on Closure
r. Supply: 50k tons; Demand: 68k tons; 2k tons enriched for weapons
s. 1b pounds to be purchased for long-term contracts over next 5-10 years
t. Average reactor needs 600,000 to 700,000 pounds to run for a year
u. US: 100/420 reactors; Importing 95% uranium; Demand 50m lbs pa
v. Uranium from Sea Water; Viable at US$180/kg (US$80/lbs); Timing?
w. Glut at 15m pounds (23 reactors for 1 year)
x. Cameco mothballed McArthur River & Key Lake; 10% world's supply
y. Kazatomprom, world's second largest, cut production by 20% for 3 yrs
z. Russia banning export of Uranium?

8. Cobalt; Higher; $27.22 ($60,000/t) from $28.46 ($62,750/t) from $28.35 ($62,500/t); Low $10; High US$43
a. Electric Vehicles (8 kg), Smartphones (8 grams), Jet Engines; Gigafactories
b. Congo: Supplies >50% world's supply; Child Labor?
c. Demand: 8% to 10% pa
d. Shortage: 2022 and beyond
e. Cobalt Reduced EV is 5-10 years away? Musk: Reducing Cobalt in Tesla;
f. 2018: 1m EVs (10k tonnes); 2027: 27m ( 27m tonnes)

9. If there's a crash, Commodities would not be spared
10. The High USD is not good for Commodities


Equities - Risk-On ( Data as of Saturday every week )

1. US Equities - Higher. 2930 from 2906 last week from 2872 two weeks ago
a. Support 2740; 2560; Resistance: 3000; Fwd PE 16
b. No Trade
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Higher. 27954 from 27286 from 26973
a. Support: 26900; 25400; Resistance: 28400; 29200; 31600;
b. Sold CMOC 3993
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Higher. 2797 from 2682 from 2702
a. Support: 2600; 2450; Resistance 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Higher; 3218 from 3161 from 3134
a. Resistance 3850
b. No Trade
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Higher. 23870 from 23095 from 22307
a. Forward PE 13
b. Resistance 24,000
c. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Higher; 1811 from 1804 from 1799
a. Sold MUI
viewtopic.php?f=10&t=6292&start=30



Currencies- Mixed (Data from XE.com)

1. USD to JPY - JPY Weaker; 112.57 from 111.83 last week from 111.03 two weeks ago
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Why is it a Safe Haven ?
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger; 3.0299 from 3.0225 from 3.0092
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.7297 from 0.7197 from 0.7106
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. I need to diversify my AUD into another currency
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Stronger. 0.9953 from 0.9855 from 0.9803
a. The range is 0.98 (2016) to 1.36 (2012).
b. I would choose the AUD over the SGD

5. AUD to MYR - AUD Stronger. 3.0154 from 2.9770 from 2.9783
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Stronger. 1.1760 from 1.1697 from 1.1564
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Stronger. 7.8116 from 7.8472 from 7.8518
a. 52 week range is 7.7452 - 7.8530
b. USD Peg band: 7.75 to 7.85
c. Will they remove the peg to the USD during the next crisis?
d. Will China ask HK to depeg from the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Stronger. 4.1340 from 4.1389 from 4.1514
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
c. I have been converting some USD to MYR
viewtopic.php?f=32&t=397&start=9. USD to SGD:-

9. USD to SGD:- SGD Stronger; 1.3648 from 1.3693 from 1.3792
a. High 1.70 (2004); Low 1.20 (2011)
b. Am very uncomfortable holding the currency of a small country
viewtopic.php?f=32&t=136&start=100

10. USD to CNY:- CNY Weaker; 6.8573 from 6.8524 from 6.8435
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Weaker; 1.3067 from 1.3119 from 1.2917
a. Brexit; Politics;
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Weaker; 5.3996 from 5.4299 from 5.3604

13. Dollar Index - USD Weaker. 94.22 from 94.51 from 95.34
viewtopic.php?f=32&t=7616&start=60


Others

Sentiment - Complacent?

Headwinds
i) Derivatives (US$700t);
ii) Debts (US$237t, 318% GDP);
iii) Corporate Debt (US$50t); US Corp Debts (US$6t)
iv) Institutional Investors (US$0.5t)
v) ETFs AUM (US$3.4t)
vi) Bitcoin (US$200b)
vii) US Pension Short-Fall: US$385b
viii) NPLs at European Banks: EUR$1t
ix) China's Bond Market: US$12t (third largest)

Tailwinds
a. Low Interest Rates
b. Cash Sidelines (US$50t)
c. QE US$18t: US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t)
d. Negative Yield Bonds (US$6t from US$10t)
e. US Foreign Funds Repatriation (US$2.5t)
f. Cash US Corporations (US$1t)
g. Cash Japanese Corporations (US$2t)
h. Buybacks: US$120b 2Q, 2017 (-10% qoq; -6% yoy); US$3.2t since 2009; i. US Household Net Worth (US$90t)
j. EM Consumption
k. Private Client Cash Levels as a % of Total Assets: Record Low (10.4%)
l. Institutional Investors: lowest levels of cash for past 8 years; 1/3 high in 2016
m. Private Equities: US$600b Cash

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

HK Properties
1. Vacancy tax
2. 9000 vacant apartments
3. CLSA, UBS and Citi - Prices may 10% to 15% by end 2019
4. Rising Interest rates
5. Slowing Economy
6. Depreciating Yuan
7. Weak Stock Markets

Spore Properties
1. 60,000 Units of Supply (7 years Supply of 6500 Homes per year )


Yield on 10 Year US Treasuries - Higher; 3.06% from 3.00% last week from 2.94% two weeks ago
a. Low 1.32%; High 3.12%
b. Resistance 3.3%

Yield on 2 Year Treasuries - Higher; 2.81% from 2.78% from 2.70%

Interest Rates:-
a. Expecting US Interest Rates to slowly rise over next 2 years
b. About US$6t or about 15% of the world’s bonds have negative yields
c. Two more US rate hikes in 2018? Two in 2019?
d. Argentina's Intertest Rate: 60%
e. Turkey's Interest Rate: 24%
f. Ukraine's Interest rate: 18%
viewtopic.php?f=16&t=7319&p=221670#p221670




JNK (SPDR Barclays High Yield Bond ETF) - Lower; 35.98 from 36.02 from 35.76

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 86.24 from 86.33 from 85.70

Baltic Dry Index - Higher; 1396 from 1382 from 1484; Low 290; High 2330 (2013)


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. 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
You do not have the required permissions to view the files attached to this post.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
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Re: Winston's Investment Ideas 04 (Oct 15 - Dec 18)

Postby winston » Sun Sep 30, 2018 9:36 am

TOL @ Sep 30, 2018

October.jpg


New Money From The New Month

It's a new month and new money would be flowing into the markets again.

Therefore, we could have one spike in the markets early next week, unless the Fund Managers have already spent their Cash in advance, for Window Dressing.

Thereafter, I do not think that the US markets would be that strong, as most of the US companies would be entering their "Black-Out" periods, where they are not allowed to do any buy-backs (which has been a major tailwind for the US markets).

In addition, the actions on the Italian stock-market on Friday (-4%) is a bit worrisome, while the US-China Trade conflict is worsening. We also have the Iran sanctions on November 4th.

Therefore, I'm still selling into any rallies and am no longer buying on any dips.

My exposure to Equities is now around 32% (from 35% last week).

I have also decided to buy EDZ (Inverse Emerging Markets 3x), to hedge against my existing Equities position.

I think that this is the calm before the storm and I need to constantly remind myself to not be complacent.

I need to get into "risk-management" mode ASAP and do the following:-
1. Reduce exposure to Equities from the current 32% to 15%
2. Buy Inverse ETFs and Put Warrants whenever there's a set-up
3. Increase USD holdings
4. Sell any unnecessary physical Real Estate


Market Risk Indicators
1. Euphoria: 7 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;
2. Credit Problems: 8 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;
3. Recession: 8 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;
4. Liquidity: 7 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;
5. Inverted Yield: 8 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020
6. Valuation; 8 (Safe 1: PE15; Danger 10: PE30) - PE S&P 24, Nadsaq 26; Revenue; USD; Tax Reform; Deregulation
7. Geopolitical Issues: 7 (Peaceful: 1; War: 10) - NKorea; Syria; Iran; Qatar, Afghanistan; South China Sea; Europe; Venezuela; Russia
Total: 52 out of 70 (74%); (Safe: 50%; Danger: 80%)


Commodities: Risk-On (Data from Commodities Live)

1. WTI Oil - Higher. US$73.53 from US$70.72 last week from US$69.00 two weeks ago; Support: US$58; US$34; Resistance: US$75, US$105
a. Trade Wars will reduce demand for Oil?
b. Stockpiles: 2.5b barrels;
c. US SPR: 679m barrels (33 days); To sell 190m over 8 years.
d. US imports 8m bpd (Total Demand of India and Japan combined)
e. US: Capex: US$1t; > 4000 "Drilled but Uncompleted" (DUC) Wells?
f. US: Active rigs currently at 1057 vs 316 in May 2016
g. China (4th largest producer; largest importer) - Reserve life: 10 to 6 years
h. China: Ban on Petrolchemical Cars in 5-10 years ? Quotas?
i. IEA: Lowest amount of new discoveries in 2016; Supply shortage in 2020?
j. Saudi Aramco's IPO 2019?; Incentive to push prices up; Saudi -200k bpd
k. China: SPR reached 51/90 days; 2018 Imports to decrease?
l. Libya: -850k bpd; Brazil +200k bpd; Canada +200k bpd; Nigeria -300k bpd; Iraq +500k bpd; Kurdistan -350k bpd; US +1m bpd (2019); Russia +200k
m. US Fracking: +0.5m bpd US$60; +1m bpd US$70; +1m bpd 2018
n. Venezeula: -1.2m bpd; Worst Case -2m bpd supply (50% cut by 2020)?
o. Iran: -900k bpd; On sanctions: -1.3m bpd?
viewtopic.php?f=33&t=7550&start=210

2. Gold - Lower. US$1196 from US$1203 from US$1198
Support: $1150; $1050; Resistance: $1400
a. Global 33,000 tons; US 8000t; China 5000t; IMF 3000t; Germany 3000t
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
g. Gold only occupies 0.03% of US investments. In 1981, it was 8%
h: India Demand: Since 2010, down each year. 2017 (700t); 2020 (900t)
i. China Demand: Since 2013, decreased 33% from 940t to 630t last year
j. Global Demand: 1Q 2018: -7%; US & European ETFs buyers; China weak
k. Central Banks: +20% yoy; Strong Russian buying
l. U.S. government holds 261.5m ounces at book value of US$42m
m. China: Reserves 160m oz; 400m oz ground; Output decreased 6% yoy
n. US: Reserve 260m oz
viewtopic.php?f=33&t=7589&p=202084#p202084

3. Silver - Higher. US$14.69 from US$14.31 from US$14.09
a. Support: US$16.10; US$15.20; Resistance: US$18.50; High: US$49
b. LED chips, Cell Phones, Nuclear Reactors, Photography, Solar Panels, RFID Chips, Semiconductors, Water Purification, Data Storage, Antibacterial products, Silver Coins, Jewelery
c. Demand: 1.2b ounces in 2015;
d. Supply: 0.9b ounces in 2015.
e. 4th year of deficit
f. 35% (7700 metric tons) for Electronics
g. 25% (5500 metric tons) for Bullions & Coins
h. India imports more Silver than the US
i. JPM has 67m ounces
j. High Gold/Siver Ratio: 50 t0 70; Currently 76, 50% higher than average
k, Production declining
l. Demand: 40% Investments / Speculation; 60% Industrial
m. About 1b ounces stored in China; 1 Year Production
n. How will US tariffs on Solar Panels affect silver prices?
viewtopic.php?f=33&t=7589&p=202084#p202084

4. Platinum - Lower; US$819 from US$829 from US$795
a. 28% for jewelry
b. 42% for diesel catalytic converters
c. Remainder for other industrial applications
d. Huge discount to Gold
e. Sixth year of deficit
f. 10 times more gold than platinum
g. Costlier to mine than gold as located deeper
h. Diesel cars losing market share
i. Strong demand from vehicles destroyed by Hurricanes (1m cars)

5. Zinc - Higher; US$2596 from US$2525 from US$2310
a. Global Demand: +14% pa for past 4 years
b. Supply: 13.7 tons; Supply Deficit 1.2m tons;
b. Breakpoint: High US$4400 (2007); Low $1600 (Jan 2016)
d. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer
e. Zinc inventories at the LME have dropped to their lowest level since 2009
f. Vehicle: DB Base Metal (Zinc, Aluminum & Copper)
viewtopic.php?f=33&t=367&start=208.

6. Copper - Lower; US$2.80 from US$2.85 from US$2.61
a. Higher inventories at LME
b. China - 50% of global consumption
c. China - Lower Power Grid demand
viewtopic.php?f=33&t=5598&p=215285#p215285

7. Aluminium - Lower; US$2053 from US$2088 from US$2037
a. Sanctions on Rusal has removed 7% of world's supply

8. Uranium - Flat; US$27.35 from US$27.45 from US$27.20
a. Breakeven: US$40 per lb
b. Range: $20 (2005) to $136 (2008); 580% rise in two years
c. Global Supply: 158m lbs pa; 15% from decommisioned weapons
d. Global Demand: 190m lbs pa to 300m lbs pa (2030)
e. Stockpile: 1b lbs (till 2022?) ; Companies normally store 5 years supply
f. Japanese Demand: 3m lbs pa; Starting 21/54 reactors? Currently, only 9
g. No. of Nuclear plants: +8 pa for next 20 yrs, 440 to 595; Current 452
h. 56 new reactors being built; 481 planned;
i. China: 35 existing plants; Building 21; To build 177 more?
j. India: 22 existing nuclear plants; Building 5; To build 64 more?
k. 25% long-term contracts expiring in 2017-18; 75% between 2017-25
l. 200 European nuclear reactors will be shut down over the next 25 years
m. France: Reduce nuclear to 50% from 75% by 2025 and closure of 20
n. Long term contracts being locked at US$40, twice spot rates
o. Kazakhtan reducing supply by 10% (40% of global production)
p. Competition: Natural Gas, Solar, Wind, Wave etc
q. US: Nuclear - 20% of electricity; 99/447 Plants; 25% drop by 2025; Two Year Moratorium on Closure
r. Supply: 50k tons; Demand: 68k tons; 2k tons enriched for weapons
s. 1b pounds to be purchased for long-term contracts over next 5-10 years
t. Average reactor needs 600,000 to 700,000 pounds to run for a year
u. US: 100/420 reactors; Importing 95% uranium; Demand 50m lbs pa
v. Uranium from Sea Water; Viable at US$180/kg (US$80/lbs); Timing?
w. Glut at 15m pounds (23 reactors for 1 year)
x. Cameco mothballed McArthur River & Key Lake; 10% world's supply
y. Kazatomprom, world's second largest, cut production by 20% for 3 yrs
z. Russia banning export of Uranium?

8. Cobalt; Higher; $28.12 ($62,000/t) from $27.22 ($60,000/t) from $28.46 ($62,750/t); Low $10; High US$43
a. Electric Vehicles (8 kg), Smartphones (8 grams), Jet Engines; Gigafactories
b. Congo: Supplies >50% world's supply; Child Labor?
c. Demand: 8% to 10% pa
d. Shortage: 2022 and beyond
e. Cobalt Reduced EV is 5-10 years away? Musk: Reducing Cobalt in Tesla;
f. 2018: 1m EVs (10k tonnes); 2027: 27m ( 27m tonnes)

9. If there's a crash, Commodities would not be spared
10. The High USD is not good for Commodities


Equities - Mixed/b] ( Data as of Saturday every week )

1. US Equities - Lower. 2914 from 2930 last week from 2906 two weeks ago
a. Support 2740; 2560; Resistance: 3000; Fwd PE 16
b. Bought EDZ (EM Inverse 3x)
b. Sold Cameco (CCJ)
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Lower. 27789 from 27954 from 27286
a. Support: 26900; 25400; Resistance: 28400; 29200; 31600;
b. Sold 1/2 Tencent (0700)
c. Sold 1/2 Bank of China (3988)
d. Sold 1/5 Rusal (0486)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Higher. 2821 from 2797 from 2682
a. Support: 2600; 2450; Resistance 3300; 3600
b. Sold 1/2 A50 (2822) listed in HK
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Higher; 3257 from 3218 from 3161
a. Resistance 3850
b. No Trade
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Higher. 24120 from 23870 from 23095
a. Forward PE 13
b. Resistance 24,000
c. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Lower; 1793 from 1811 from 1804
a. No Trade
viewtopic.php?f=10&t=6292&start=30



[b]Currencies- Risk-Off
(Data from XE.com)

1. USD to JPY - JPY Weaker; 113.44 from 112.57 last week from 111.83 two weeks ago
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Why is it a Safe Haven ?
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Weaker; 3.0248 from 3.0299 from 3.0225
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Weaker; 0.7221 from 0.7297 from 0.7197
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. I need to diversify my AUD into another currency
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Weaker. 0.9878 from 0.9953 from 0.9855
a. The range is 0.98 (2016) to 1.36 (2012).
b. I would choose the AUD over the SGD

5. AUD to MYR - AUD Weaker. 2.9881 from 3.0154 from 2.9770
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Weaker. 1.1581 from 1.1760 from 1.1697
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Weaker. 7.8236 from 7.8116 from 7.8472
a. 52 week range is 7.7452 - 7.8530
b. USD Peg band: 7.75 to 7.85
c. Will they remove the peg to the USD during the next crisis?
d. Will China ask HK to depeg from the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Weaker. 4.1378 from 4.1340 from 4.1389
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
c. I have been converting some USD to MYR
viewtopic.php?f=32&t=397&start=9. USD to SGD:-

9. USD to SGD:- SGD Weaker; 1.3677 from 1.3648 from 1.3693
a. High 1.70 (2004); Low 1.20 (2011)
b. Am very uncomfortable holding the currency of a small country
viewtopic.php?f=32&t=136&start=100

10. USD to CNY:- CNY Weaker; 6.8753 from 6.8573 from 6.8524
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Weaker; 1.3015 from 1.3067 from 1.3119
a. Brexit; Politics;
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Weaker; 5.3845 from 5.3996 from 5.4299

13. Dollar Index - USD Stronger. 95.32 from 94.22 from 94.51
viewtopic.php?f=32&t=7616&start=60


Others

Sentiment - Complacent?

Headwinds
i) Derivatives (US$700t);
ii) Debts (US$237t, 318% GDP);
iii) Corporate Debt (US$50t); US Corp Debts (US$6t)
iv) Institutional Investors (US$0.5t)
v) ETFs AUM (US$3.4t)
vi) Bitcoin (US$200b)
vii) US Pension Short-Fall: US$385b
viii) NPLs at European Banks: EUR$1t
ix) China's Bond Market: US$12t (third largest)

Tailwinds
a. Low Interest Rates
b. Cash Sidelines (US$50t)
c. QE US$18t: US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t)
d. Negative Yield Bonds (US$6t from US$10t)
e. US Foreign Funds Repatriation (US$2.5t)
f. Cash US Corporations (US$1t)
g. Cash Japanese Corporations (US$2t)
h. Buybacks: US$120b 2Q, 2017 (-10% qoq; -6% yoy); US$3.2t since 2009; i. US Household Net Worth (US$90t)
j. EM Consumption
k. Private Client Cash Levels as a % of Total Assets: Record Low (10.4%)
l. Institutional Investors: lowest levels of cash for past 8 years; 1/3 high in 2016
m. Private Equities: US$600b Cash

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

HK Properties
1. Vacancy tax
2. 9000 vacant apartments
3. CLSA, UBS and Citi - Prices may 10% to 15% by end 2019
4. Rising Interest rates
5. Slowing Economy
6. Depreciating Yuan
7. Weak Stock Markets

Spore Properties
1. 60,000 Units of Supply (7 years Supply of 6500 Homes per year )


Yield on 10 Year US Treasuries - Higher; 3.06% from 3.06% last week from 3.00% two weeks ago
a. Low 1.32%; High 3.12%
b. Resistance 3.3%

Yield on 2 Year Treasuries - Higher; 2.82% from 2.81% from 2.78%

Interest Rates:-
a. Expecting US Interest Rates to slowly rise over next 2 years
b. About US$6t or about 15% of the world’s bonds have negative yields
c. US rate hike in Dec, 2018? Three in 2019? One in 2020?
d. Argentina's Intertest Rate: 60%
e. Turkey's Interest Rate: 24%
f. Ukraine's Interest rate: 18%
viewtopic.php?f=16&t=7319&p=221670#p221670


JNK (SPDR Barclays High Yield Bond ETF) - Higher; 36.05 from 35.98 from 36.02

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 86.44 from 86.24 from 86.33

Baltic Dry Index - Higher; 1524 from 1396 from 1382; Low 290; High 2330 (2013)


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. 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
You do not have the required permissions to view the files attached to this post.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
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Posts: 118522
Joined: Wed May 07, 2008 9:28 am

Re: Winston's Investment Ideas 04 (Oct 15 - Dec 18)

Postby winston » Sun Oct 07, 2018 9:31 am

TOL @ Oct 7, 2018

Risks.jpg


Risks Out There

The markets have been weak over the past few days while I'm still taking my own sweet time to protect myself against a sharp drop in Equities and Non-USD assets.

Therefore, I'm forcing myself to review the risks out there, to remind myself that I need to take decisive action to protect myself ASAP.

The following are some risks that are on my list:-
1. Rising Interest Rates
2. US Quantitative Tightening; ECB Tightening In 2019
3. Strong USD affecting USD Debts in Emerging Markets
4. Strong Oil Prices affecting Oil-Importing Countries eg. India and Indonesia
5. US-China Trade War; China Slowdown; Commodities Slowdown;
6. Sanctions on Iran; China is biggest buyer of Iranian Oil
7. US Stocks entering "Black-Out Periods" for Buy-backs
8. Sanctions on Russia
9. Weak Sentiment
10. Italian & Greek Bad Debts
11. Geopolitical - Iran, Israel, North Korea, Veneuzeula, South China Sea
etc.

From the list above, it looks like the US-China Trade War is the most difficult to analyze. It's now very bitter and there could be a lot of collateral damage as well as unintended consequences. Worst case scenario - prolonged conflict leading to WW3.

Anyway, I should start having a weekly Risk Management Progress Report:-
1. To Reduce Exposure to Equities: No progress (still at 31% of Liquid Assets)
2. Buy Inverse ETFs and Put Warrants - None (took profit on EDZ)
3. Increase "USD/HKD/Gold" holdings - No progress (still at 26%)
4. Sell unnecessary physical Real Estate - Just sold a Commercial Property

Hopefully, the above would motivate me to sell some of Equities, buy some Puts & Inverse ETFs as well as increase my USD assets ASAP.


Market Risk Indicators
1. Euphoria: 7 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;
2. Credit Problems: 8 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;
3. Recession: 8 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;
4. Liquidity: 7 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;
5. Inverted Yield: 8 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020
6. Valuation; 8 (Safe 1: PE15; Danger 10: PE30) - PE S&P 24, Nadsaq 26; Revenue; USD; Tax Reform; Deregulation
7. Geopolitical Issues: 8 (Peaceful: 1; War: 10) - NKorea; Syria; Iran; Qatar, Afghanistan; South China Sea; Europe; Venezuela; Russia
Total: 53 out of 70 (76%); (Safe: 50%; Danger: 80%)


Commodities: Risk-On (Data from Commodities Live)

1. WTI Oil - Higher. US$74.31 from US$73.53 last week from US$70.72 two weeks ago; Support: US$58; US$34; Resistance: US$75, US$105
a. Trade Wars will reduce demand for Oil?
b. Stockpiles: 2.5b barrels;
c. US SPR: 679m barrels (33 days); To sell 190m over 8 years.
d. US imports 8m bpd (Total Demand of India and Japan combined)
e. US: Capex: US$1t; > 4000 "Drilled but Uncompleted" (DUC) Wells?
f. US: Active rigs currently at 1057 vs 316 in May 2016
g. China (4th largest producer; largest importer) - Reserve life: 10 to 6 years
h. China: Ban on Petrolchemical Cars in 5-10 years ? Quotas?
i. IEA: Lowest amount of new discoveries in 2016; Supply shortage in 2020?
j. Saudi: Aramco's IPO 2019?; No more Spare capacity;
k. China: SPR reached 51/90 days; 2018 Imports to decrease?
l. Libya: -850k bpd; Brazil +200k bpd; Canada +200k bpd; Nigeria -300k bpd; Iraq +500k bpd; Kurdistan -350k bpd; US +1m bpd (2019);
m. US Fracking: +0.5m bpd US$60; +1m bpd US$70; +1m bpd 2018
n. Venezeula: -1.2m bpd; Worst Case -2m bpd supply (50% cut by 2020)?
o. Iran: -1m bpd; On sanctions: -1.3m bpd?
p. Saudi - no more spare capaci
q. Winter: lower demand for oil
viewtopic.php?f=33&t=7550&start=210

2. Gold - Higher. US$1207 from US$1196 from US$1203
Support: $1150; $1050; Resistance: $1400
a. Global 33,000 tons; US 8000t; China 5000t; IMF 3000t; Germany 3000t
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
g. Gold only occupies 0.03% of US investments. In 1981, it was 8%
h: India Demand: Since 2010, down each year. 2017 (700t); 2020 (900t)
i. China Demand: Since 2013, decreased 33% from 940t to 630t last year
j. Global Demand: 1Q 2018: -7%; US & European ETFs buyers; China weak
k. Central Banks: +20% yoy; Strong Russian buying
l. U.S. government holds 261.5m ounces at book value of US$42m
m. China: Reserves 160m oz; 400m oz ground; Output decreased 6% yoy
n. US: Reserve 260m oz
viewtopic.php?f=33&t=7589&p=202084#p202084

3. Silver - Flat. US$14.67 from US$14.69 from US$14.31
a. Support: US$16.10; US$15.20; Resistance: US$18.50; High: US$49
b. LED chips, Cell Phones, Nuclear Reactors, Photography, Solar Panels, RFID Chips, Semiconductors, Water Purification, Data Storage, Antibacterial products, Silver Coins, Jewelery
c. Demand: 1.2b ounces in 2015;
d. Supply: 0.9b ounces in 2015.
e. 4th year of deficit
f. 35% (7700 metric tons) for Electronics
g. 25% (5500 metric tons) for Bullions & Coins
h. India imports more Silver than the US
i. JPM has 67m ounces
j. High Gold/Siver Ratio: 50 t0 70; Currently 76, 50% higher than average
k, Production declining
l. Demand: 40% Investments / Speculation; 60% Industrial
m. About 1b ounces stored in China; 1 Year Production
n. How will US tariffs on Solar Panels affect silver prices?
viewtopic.php?f=33&t=7589&p=202084#p202084

4. Platinum - Higher; US$825 from US$819 from US$829
a. 28% for jewelry
b. 42% for diesel catalytic converters
c. Remainder for other industrial applications
d. Huge discount to Gold
e. Sixth year of deficit
f. 10 times more gold than platinum
g. Costlier to mine than gold as located deeper
h. Diesel cars losing market share
i. Strong demand from vehicles destroyed by Hurricanes (1m cars)

5. Zinc - Higher; US$2625 from US$2596 from US$2525
a. Global Demand: +14% pa for past 4 years
b. Supply: 13.7 tons; Supply Deficit 1.2m tons;
b. Breakpoint: High US$4400 (2007); Low $1600 (Jan 2016)
d. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer
e. Zinc inventories at the LME have dropped to their lowest level since 2009
f. Vehicle: DB Base Metal (Zinc, Aluminum & Copper)
viewtopic.php?f=33&t=367&start=208.

6. Copper - Lower; US$2.76 from US$2.80 from US$2.85
a. Higher inventories at LME
b. China - 50% of global consumption
c. China - Lower Power Grid demand
viewtopic.php?f=33&t=5598&p=215285#p215285

7. Aluminium - Higher; US$2118 from US$2053 from US$2088
a. Sanctions on Rusal has removed 7% of world's supply

8. Uranium - Flat; US$27.35 from US$27.35 from US$27.45
a. Breakeven: US$40 per lb
b. Range: $20 (2005) to $136 (2008); 580% rise in two years
c. Global Supply: 158m lbs pa; 15% from decommisioned weapons
d. Global Demand: 190m lbs pa to 300m lbs pa (2030)
e. Stockpile: 1b lbs (till 2022?) ; Companies normally store 5 years supply
f. Japanese Demand: 3m lbs pa; Starting 21/54 reactors? Currently, only 9
g. No. of Nuclear plants: +8 pa for next 20 yrs, 440 to 595; Current 452
h. 56 new reactors being built; 481 planned;
i. China: 35 existing plants; Building 21; To build 177 more?
j. India: 22 existing nuclear plants; Building 5; To build 64 more?
k. 25% long-term contracts expiring in 2017-18; 75% between 2017-25
l. 200 European nuclear reactors will be shut down over the next 25 years
m. France: Reduce nuclear to 50% from 75% by 2025 and closure of 20
n. Long term contracts being locked at US$40, twice spot rates
o. Kazakhtan reducing supply by 10% (40% of global production)
p. Competition: Natural Gas, Solar, Wind, Wave etc
q. US: Nuclear - 20% of electricity; 99/447 Plants; 25% drop by 2025; Two Year Moratorium on Closure
r. Supply: 50k tons; Demand: 68k tons; 2k tons enriched for weapons
s. 1b pounds to be purchased for long-term contracts over next 5-10 years
t. Average reactor needs 600,000 to 700,000 pounds to run for a year
u. US: 100/420 reactors; Importing 95% uranium; Demand 50m lbs pa
v. Uranium from Sea Water; Viable at US$180/kg (US$80/lbs); Timing?
w. Glut at 15m pounds (23 reactors for 1 year)
x. Cameco mothballed McArthur River & Key Lake; 10% world's supply
y. Kazatomprom, world's second largest, cut production by 20% for 3 yrs
z. Russia banning export of Uranium?

8. Cobalt; Lower; $25.17 ($55,500/t) from $28.12 ($62,000/t) from $27.22 ($60,000/t); Low $10; High US$43
a. Electric Vehicles (8 kg), Smartphones (8 grams), Jet Engines; Gigafactories
b. Congo: Supplies >50% world's supply; Child Labor?
c. Demand: 8% to 10% pa
d. Shortage: 2022 and beyond
e. Cobalt Reduced EV is 5-10 years away? Musk: Reducing Cobalt in Tesla;
f. 2018: 1m EVs (10k tonnes); 2027: 27m ( 27m tonnes)

9. If there's a crash, Commodities would not be spared
10. The High USD is not good for Commodities


Equities - Risk-Off/b] (Data as of Saturday every week)

1. US Equities - Lower. 2886 from 2914 last week from 2930 two weeks ago
a. Support 2740; 2560; Resistance: 3000; Fwd PE 16
b. Traded EDZ (EM Inverse 3x)
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Lower. 26573 from 27789 from 27954
a. Support: 25400; 25000; Resistance: 28400; 31600;
b. Added to Tencent (0700)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Flat. 2821 from 2821 from 2797
a. Support: 2600; 2450; Resistance 2900; 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Lower; 3207 from 3257 from 3218
a. Resistance 3850
b. No Trade
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Lower. 23784 from 24120 from 23870
a. Forward PE 13
b. Resistance 25000
c. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Lower; 1777 from 1793 from 1811
a. No Trade
viewtopic.php?f=10&t=6292&start=30



[b]Currencies- Risk-Off
(Data from XE.com)

1. USD to JPY - JPY Weaker; 113.85 from 113.44 last week from 112.57 two weeks ago
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Why is it a Safe Haven ?
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Weaker; 3.0032 from 3.0248 from 3.0299
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Weaker; 0.7058 from 0.7063 from 0.7221
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. I need to diversify my AUD into another currency
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Weaker. 0.9757 from 0.9878 from 0.9953
a. The range is 0.98 (2016) to 1.36 (2012).
b. I would choose the AUD over the SGD

5. AUD to MYR - AUD Weaker. 2.9253 from 2.9881 from 3.0154
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Weaker. 1.1490 from 1.1581 from 1.1760
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Weaker. 7.8339 from 7.8236 from 7.8116
a. 52 week range is 7.7452 - 7.8530
b. USD Peg band: 7.75 to 7.85
c. Will they remove the peg to the USD during the next crisis?
d. Will China ask HK to depeg from the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Weaker. 4.1500 from 4.1378 from 4.1340
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
c. I have been converting some USD to MYR
viewtopic.php?f=32&t=397&start=9. USD to SGD:-

9. USD to SGD:- SGD Weaker; 1.3802 from 1.3677 from 1.3648
a. High 1.70 (2004); Low 1.20 (2011)
b. Am very uncomfortable holding the currency of a small country
viewtopic.php?f=32&t=136&start=100

10. USD to CNY:- CNY Stronger; 6.8694 from 6.8753 from 6.8573
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Stronger; 1.3043 from 1.3015 from 1.3067
a. Brexit; Politics;
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Stronger; 5.4041 from 5.3845 from 5.3996

13. Dollar Index - USD Stronger. 95.85 from 95.32 from 94.22
viewtopic.php?f=32&t=7616&start=60


Others

Sentiment - Complacent?

Headwinds
i) Derivatives (US$700t);
ii) Debts (US$237t, 318% GDP);
iii) Corporate Debt (US$50t); US Corp Debts (US$6t)
iv) Institutional Investors (US$0.5t)
v) ETFs AUM (US$3.4t)
vi) Bitcoin (US$200b)
vii) US Pension Short-Fall: US$385b
viii) NPLs at European Banks: EUR$1t
ix) China's Bond Market: US$12t (third largest)

Tailwinds
a. Low Interest Rates
b. Cash Sidelines (US$50t)
c. QE US$18t: US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t)
d. Negative Yield Bonds (US$6t from US$10t)
e. US Foreign Funds Repatriation (US$2.5t)
f. Cash US Corporations (US$1t)
g. Cash Japanese Corporations (US$2t)
h. Buybacks: US$120b 2Q, 2017 (-10% qoq; -6% yoy); US$3.2t since 2009; i. US Household Net Worth (US$90t)
j. EM Consumption
k. Private Client Cash Levels as a % of Total Assets: Record Low (10.4%)
l. Institutional Investors: lowest levels of cash for past 8 years; 1/3 high in 2016
m. Private Equities: US$600b Cash

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

HK Properties
1. Vacancy tax
2. 9000 vacant apartments
3. CLSA, UBS and Citi - Prices may 10% to 15% by end 2019
4. Rising Interest rates
5. Slowing Economy
6. Depreciating Yuan
7. Weak Stock Markets

Spore Properties
1. 60,000 Units of Supply (7 years Supply of 6500 Homes per year )


Yield on 10 Year US Treasuries - Higher; 3.23% from 3.06% last week from 3.06% two weeks ago
a. Low 1.32%; High 3.12%
b. Resistance 3.3%

Yield on 2 Year Treasuries - Higher; 2.88% from 2.82% from 2.81%

Interest Rates:-
a. Expecting US Interest Rates to slowly rise over next 2 years
b. About US$6t or about 15% of the world’s bonds have negative yields
c. US rate hike in Dec, 2018? Three in 2019? One in 2020?
d. Argentina's Intertest Rate: 60%
e. Turkey's Interest Rate: 24%
f. Ukraine's Interest rate: 18%
viewtopic.php?f=16&t=7319&p=221670#p221670


JNK (SPDR Barclays High Yield Bond ETF) - Lower; 35.55 from 36.05 from 35.98

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 85.30 from 86.44 from 86.24

Baltic Dry Index - Higher; 1554 from 1524 from 1396; Low 290; High 2330 (2013)


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. 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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User avatar
winston
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Posts: 118522
Joined: Wed May 07, 2008 9:28 am

Re: Winston's Investment Ideas 04 (Oct 15 - Dec 18)

Postby winston » Sun Oct 14, 2018 10:01 am

Weekly Risk Management Progress Report:-
1. To Reduce Exposure to Equities: No Progress (Increased from 31% to 34% of Liquid Assets)
2. Buy Inverse ETFs and Put Warrants - No Progress (Waiting to buy EDZ, LABD, SQQQ and UVXY)
3. Increase "USD/HKD/Gold" holdings - No Progress (still at 26%)
4. Sell unnecessary Physical Real Estate - Just sold a Commercial Property


Market Risk Indicators
1. Euphoria: 7 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;
2. Credit Problems: 8 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;
3. Recession: 8 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;
4. Liquidity: 7 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;
5. Inverted Yield: 8 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020
6. Valuation; 8 (Safe 1: PE15; Danger 10: PE30) - PE S&P 24, Nadsaq 26; Revenue; USD; Tax Reform; Deregulation
7. Geopolitical Issues: 8 (Peaceful: 1; War: 10) - NKorea; Syria; Iran; Qatar, Afghanistan; South China Sea; Europe; Venezuela; Russia
Total: 53 out of 70 (76%); (Safe: 50%; Danger: 80%)


Commodities: Risk-On (Data from Commodities Live)

1. WTI Oil - Higher. US$74.31 from US$73.53 last week from US$70.72 two weeks ago; Support: US$58; US$34; Resistance: US$75, US$105
a. Trade Wars will reduce demand for Oil?
b. Stockpiles: 2.5b barrels;
c. US SPR: 679m barrels (33 days); To sell 190m over 8 years.
d. US imports 8m bpd (Total Demand of India and Japan combined)
e. China (4th largest producer; largest importer) - Reserve life: 10 to 6 years
f. China: Ban on Petrolchemical Cars in 5-10 years ? Quotas?
g. IEA: Lowest amount of new discoveries in 2016; Supply shortage in 2020?
h. Saudi: Aramco's IPO 2019?; No more Spare capacity;
i. China: SPR reached 51/90 days; 2018 Imports to decrease?
j. Libya: -850k bpd; Brazil +200k bpd; Canada +200k bpd; Nigeria -300k bpd; Iraq +500k bpd; Kurdistan -350k bpd; US +1m bpd (2019);
k. US Fracking: +0.5m bpd US$60; +1m bpd US$70; +1m bpd 2018
l. Venezeula: -1.2m bpd; Worst Case -2m bpd supply (50% cut by 2020)?
m. Iran: -1m bpd; On sanctions: -1.3m bpd?
o. Saudi - no more spare capacity
p. Winter: lower demand for oil
viewtopic.php?f=33&t=7550&start=210

2. Gold - Higher. US$1222 from US$1207 from US$1196
Support: $1150; $1050; Resistance: $1400
a. Global 33,000 tons; US 8000t; China 5000t; IMF 3000t; Germany 3000t
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
g. Gold only occupies 0.03% of US investments. In 1981, it was 8%
h: India Demand: Since 2010, down each year. 2017 (700t); 2020 (900t)
i. China Demand: Since 2013, decreased 33% from 940t to 630t last year
j. Global Demand: 2Q 2018: China +5%; India -8%; US & Eur ETFs buyers;
k. Central Banks: +20% yoy; Strong Russian buying
l. U.S. government holds 261.5m ounces at book value of US$42m
m. China: Reserves 185m oz; 400m oz ground; Output decreased 6% yoy
n. US: Reserve 260m oz
viewtopic.php?f=33&t=7589&p=202084#p202084

3. Silver - Flat. US$14.63 from US$14.67 from US$14.69
a. Support: US$16.10; US$15.20; Resistance: US$18.50; High: US$49
b. LED chips, Cell Phones, Nuclear Reactors, Photography, Solar Panels, RFID Chips, Semiconductors, Water Purification, Data Storage, Antibacterial products, Silver Coins, Jewelery
c. Demand: 1.2b ounces in 2015;
d. Supply: 0.9b ounces in 2015.
e. 4th year of deficit
f. 35% (7700 metric tons) for Electronics
g. 25% (5500 metric tons) for Bullions & Coins
h. India imports more Silver than the US
i. JPM has 67m ounces
j. High Gold/Siver Ratio: 50 t0 70; Currently 76, 50% higher than average
k, Production declining
l. Demand: 40% Investments / Speculation; 60% Industrial
m. About 1b ounces stored in China; 1 Year Production
n. How will US tariffs on Solar Panels affect silver prices?
viewtopic.php?f=33&t=7589&p=202084#p202084

4. Platinum - Higher; US$842 from US$825 from US$819
a. 28% for jewelry
b. 42% for diesel catalytic converters
c. Remainder for other industrial applications
d. Huge discount to Gold
e. Sixth year of deficit
f. 10 times more gold than platinum
g. Costlier to mine than gold as located deeper
h. Diesel cars losing market share
i. Strong demand from vehicles destroyed by Hurricanes (1m cars)

5. Zinc - Higher; US$2633 from US$2625 from US$2596
a. Global Demand: +14% pa for past 4 years
b. Supply: 13.7 tons; Supply Deficit 1.2m tons;
b. Breakpoint: High US$4400 (2007); Low $1600 (Jan 2016)
d. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer
e. Zinc inventories at the LME have dropped to their lowest level since 2009
f. Vehicle: DB Base Metal (Zinc, Aluminum & Copper); MMG
viewtopic.php?f=33&t=367&start=208.

6. Copper - Higher; US$2.81 from US$2.76 from US$2.80
a. Higher inventories at LME
b. China - 50% of global consumption
c. China - Lower Power Grid demand
viewtopic.php?f=33&t=5598&p=215285#p215285

7. Aluminium - Lower; US$2029 from US$2118 from US$2053
a. Sanctions on Rusal has removed 7% of world's supply

8. Uranium - Flat; US$27.50 from US$27.35 from US$27.35
a. Breakeven: US$40 per lb
b. Range: $20 (2005) to $136 (2008); 580% rise in two years
c. Global Supply: 158m lbs pa; 15% from decommisioned weapons
d. Global Demand: 190m lbs pa to 300m lbs pa (2030)
e. Stockpile: 1b lbs (till 2022?) ; Companies normally store 5 years supply
f. Japanese Demand: 3m lbs pa; Starting 21/54 reactors? Currently, only 9
g. No. of Nuclear plants: +8 pa for next 20 yrs, 440 to 595; Current 452
h. 56 new reactors being built; 481 planned;
i. China: 35 existing plants; Building 21; To build 177 more?
j. India: 22 existing nuclear plants; Building 5; To build 64 more?
k. 25% long-term contracts expiring in 2017-18; 75% between 2017-25
l. 200 European nuclear reactors will be shut down over the next 25 years
m. France: Reduce nuclear to 50% from 75% by 2025 and closure of 20
n. Long term contracts being locked at US$40, twice spot rates
o. Kazakhtan reducing supply by 10% (40% of global production)
p. Competition: Natural Gas, Solar, Wind, Wave etc
q. US: Nuclear - 20% of electricity; 99/447 Plants; 25% drop by 2025; Two Year Moratorium on Closure
r. Supply: 50k tons; Demand: 68k tons; 2k tons enriched for weapons
s. 1b pounds to be purchased for long-term contracts over next 5-10 years
t. Average reactor needs 600,000 to 700,000 pounds to run for a year
u. US: 100/420 reactors; Importing 95% uranium; Demand 50m lbs pa
v. Uranium from Sea Water; Viable at US$180/kg (US$80/lbs); Timing?
w. Glut at 15m pounds (23 reactors for 1 year)
x. Cameco mothballed McArthur River & Key Lake; 10% world's supply
y. Kazatomprom, world's second largest, cut production by 20% for 3 yrs
z. Russia banning export of Uranium?

8. Cobalt; Higher; $26.31 ($58,000/t) from $25.17 ($55,500/t) from $28.12 ($62,000/t); Low $10; High US$43
a. Electric Vehicles (8 kg), Smartphones (8 grams), Jet Engines; Gigafactories
b. Congo: Supplies >50% world's supply; Child Labor?
c. Demand: 8% to 10% pa
d. Shortage: 2022 and beyond
e. Cobalt Reduced EV is 5-10 years away? Musk: Reducing Cobalt in Tesla;
f. 2018: 1m EVs (10k tonnes); 2027: 27m ( 27m tonnes)

9. If there's a crash, Commodities would not be spared
10. The High USD is not good for Commodities


Equities - Risk-Off/b] (Data as of Saturday every week)

1. US Equities - Lower. 2886 from 2914 last week from 2930 two weeks ago
a. Support 2740; 2560; Resistance: 3000; Fwd PE 16
b. No Trade
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Lower. 25801 from 26573 from 27789
a. Support: 25400; 25000; Resistance: 28400; 31600;
b. Traded Tencent (0700)
c. Trded CICC (3908)
d. Traded MMG (1208)
e. Traded Galaxy (0027)
f. Bought HKEX (0388)
g. Bought Fosun (0656)
h. Bought Brilliance China (1114)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Lower. 2607 from 2821 from 2821
a. Support: 2600; 2450; Resistance 2900; 3300; 3600
b. Traded A50 (2822) listed in HK
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Lower; 3076 from 3207 from 3257
a. Resistance 3850
b. Bought Mandarin Oriental
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Lower. 22695 from 23784 from 24120
a. Forward PE 13
b. Resistance 25000
c. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Lower; 1731 from 1777 from 1793
a. Traded Gamuda
viewtopic.php?f=10&t=6292&start=30



[b]Currencies- Mixed
(Data from XE.com)

1. USD to JPY - JPY Stronger; 112.26 from 113.85 last week from 113.44 two weeks ago
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Why is it a Safe Haven ?
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Weaker; 3.0172 from 3.0032 from 3.0248
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.7118 from 0.7058 from 0.7063
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. I need to diversify my AUD into another currency
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Stronger. 0.9802 from 0.9757 from 0.9878
a. The range is 0.98 (2016) to 1.36 (2012).
b. I would choose the AUD over the SGD

5. AUD to MYR - AUD Stronger. 2.9588 from 2.9253 from 2.9881
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Stronger. 1.1587 from 1.1490 from 1.1581
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Weaker. 7.8352 from 7.8339 from 7.8236
a. 52 week range is 7.7452 - 7.8530
b. USD Peg band: 7.75 to 7.85
c. Will they remove the peg to the USD during the next crisis?
d. Will China ask HK to depeg from the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Weaker. 4.1539 from 4.1500 from 4.1378
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
c. I have been converting some USD to MYR
viewtopic.php?f=32&t=397&start=9. USD to SGD:-

9. USD to SGD:- SGD Stronger; 1.3770 from 1.3802 from 1.3677
a. High 1.70 (2004); Low 1.20 (2011)
b. Am very uncomfortable holding the currency of a small country
viewtopic.php?f=32&t=136&start=100

10. USD to CNY:- CNY Weaker; 6.9230 from 6.8694 from 6.8753
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Stronger; 1.3219 from 1.3043 from 1.3015
a. Brexit; Politics;
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Stronger; 5.4927 from 5.4041 from 5.3845

13. Dollar Index - USD Weaker. 95.08 from 95.85 from 95.32
viewtopic.php?f=32&t=7616&start=60


Others

Sentiment - Complacent?

Headwinds
i) Derivatives (US$700t);
ii) Debts (US$237t, 318% GDP);
iii) Corporate Debt (US$50t); US Corp Debts (US$6t)
iv) Institutional Investors (US$0.5t)
v) ETFs AUM (US$3.4t)
vi) Bitcoin (US$200b)
vii) US Pension Short-Fall: US$385b
viii) NPLs at European Banks: EUR$1t
ix) China's Bond Market: US$12t (third largest)

Tailwinds
a. Low Interest Rates
b. Cash Sidelines (US$50t)
c. QE US$18t: US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t)
d. Negative Yield Bonds (US$6t from US$10t)
e. US Foreign Funds Repatriation (US$2.5t)
f. Cash US Corporations (US$1t)
g. Cash Japanese Corporations (US$2t)
h. Buybacks: US$120b 2Q, 2017 (-10% qoq; -6% yoy); US$3.2t since 2009; i. US Household Net Worth (US$90t)
j. EM Consumption
k. Private Client Cash Levels as a % of Total Assets: Record Low (10.4%)
l. Institutional Investors: lowest levels of cash for past 8 years; 1/3 high in 2016
m. Private Equities: US$600b Cash

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

HK Properties
1. Vacancy tax
2. 9000 vacant apartments
3. CLSA, UBS and Citi - Prices may 10% to 15% by end 2019
4. Rising Interest rates
5. Slowing Economy
6. Depreciating Yuan
7. Weak Stock Markets

Spore Properties
1. 60,000 Units of Supply (7 years Supply of 6500 Homes per year )


Yield on 10 Year US Treasuries - Higher; 3.16% from 3.23% last week from 3.06% two weeks ago
a. Low 1.32%; High 3.12%
b. Resistance 3.3%

Yield on 2 Year Treasuries - Lower; 2.85% from 2.88% from 2.82%

Interest Rates:-
a. Expecting US Interest Rates to slowly rise over next 2 years
b. About US$6t or about 15% of the world’s bonds have negative yields
c. US rate hike in Dec, 2018? Three in 2019? One in 2020?
d. Argentina's Intertest Rate: 60%
e. Turkey's Interest Rate: 24%
f. Ukraine's Interest rate: 18%
viewtopic.php?f=16&t=7319&p=221670#p221670


JNK (SPDR Barclays High Yield Bond ETF) - Lower; 35.50 from 35.55 from 36.05

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 85.15 from 85.30 from 86.44

Baltic Dry Index - Higher; 1579 from 1554 from 1524; Low 290; High 2330 (2013)


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. 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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It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118522
Joined: Wed May 07, 2008 9:28 am

Re: Winston's Investment Ideas 04 (Oct 15 - Dec 18)

Postby winston » Sun Oct 21, 2018 9:32 am

TOL @ Oct 21, 2018

Bear.png


Time To Be Less Bearish?

I have been bearish for the past few months and it has served me quite well so far.

I have managed to escape the plunge in HK relatively unscathed, as well as the volatility in the US.

In fact, I've managed to also make money with some Inverse ETFs in the US eg. LABD (Biotech Inverse 3x), SQQQ (Nasdaq Inverse 3x), EDZ (Emerging Markets Inverse 3x) and UVXY (Volatility 3x).

So is it time to be less bearish? Intuitively, I think that the selling is now a bit overdone and it may be time to start nibbling at things again.

However, before I go overboard in my buying, it may be wise to just reflect on things a bit first:-

1. Interest Rates - No surprises. Rising slowly in the US and probably next year in Europe. May rise around 2020-2021 in Japan.

2. Liquidity - No surprises. Being withdrawn in the US at the rate of US$50b a month. Will be withdrawn in Europe by end 2018. Still loose in Japan. May loosen in China as they struggle to understand what hit them.

3. Earnings - No surprises. Still positive in the US for next 6 months. After that, it depends on how the trade war will go from here.

4. Sentiment - No surprises. Cautious. Businesses are no longer taking any risk, in view of the chaos created by the WH every single day.

5. US-China Trade War - Plenty of chance for Collateral Damage and Unintended Consequences. If the market plunges deeply (probably assisted by China selling some of their US treasuries before the Mid-Term Elections), it may motivate the US to look for a face-saving way out of the situation. Getting more bitter every day.

6. Emerging Markets - No surprises. The strong USD and high Oil prices will hit their USD debts. Both Currencies and Equities of EMs are at risk.

7. China - No surprises. Things are slowing down. Somehow people still think that their Plunge Protection Team (PPT) can still support their market even though their PPT has not been able to do anything for the past few months. Death by a thousand cuts. Need to remind myself to stick to the SOEs only, if I still want to play here.

8. Cash On Sidelines - No surprises. Everyone around me is bearish and are sitting on a higher proportion of Cash than they normally would. This Cash could be deployed whenever there's a Flash Crash but not when it's a "Chinese Water Torture" market.

9. Geopolitical Issues - Plenty of chance for surprises. Iran, Russia (New Sanction) and South China Sea seems to be the hot spots now. Venezeula (Oil), Saudi Arabia (MBS), Turkey (Pastor), Italy (Bad Debts), Russia (Crimea) and North Korea, seems to be under control for the time being.

10. Natural Disasters - No surprises. Hurricane season coming up (So far, there has been no direct hit on the Oil Facilities in the US). And Seismic activities seems to be on the increase (when will one of this earthquakes hit Silicon Valley, Taiwan or Tokyo?).

In view of the above, I think that it's probably time to be less bearish. Most of the risks can be estimated except for the US-China Trade War, which is still controllable at this point in time.

In addition, the final two years of the Presidential Cycle is normally a good time for the US Equities market. ( However, we dont have a normal President this time so why should we be getting a normal Presidential Cycle? ).


Weekly Risk Management Progress Report:-
1. Reduce Equities: No Progress (Increased from 34% to 36% of Liquid Assets)
2. Buy Inverse ETFs and Puts - No Progress (Sold LABD, SQQQ and UVXY)
3. Increase "USD/HKD/Gold" - No progress (Decreased from 26% to 24%)


Market Risk Indicators
1. Euphoria: 7 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;
2. Credit Problems: 8 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;
3. Recession: 8 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;
4. Liquidity: 7 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;
5. Inverted Yield: 8 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020
6. Valuation; 8 (Safe 1: PE15; Danger 10: PE30) - PE S&P 24, Nadsaq 26; Revenue; USD; Tax Reform; Deregulation
7. Geopolitical Issues: 8 (Peaceful: 1; War: 10) - NKorea; Syria; Iran; Qatar, Afghanistan; South China Sea; Europe; Venezuela; Russia
Total: 53 out of 70 (76%); (Safe: 50%; Danger: 80%)


Commodities: Risk-Off (Data from Commodities Live)

1. WTI Oil - Lower. US$69.37 from US$74.31 last week from US$73.53 two weeks ago; Support: US$58; US$34; Resistance: US$75, US$105
a. Trade Wars will reduce demand for Oil? -100k bpd?
b. Stockpiles: 2.5b barrels;
c. US SPR: 679m barrels (33 days); To sell 190m over 8 years.
d. US imports 8m bpd (Total Demand of India and Japan combined)
e. China (4th largest producer; largest importer) - Reserve life: 10 to 6 years
f. China: Ban on Petrolchemical Cars in 5-10 years ? Quotas?
g. IEA: Lowest amount of new discoveries in 2016; Supply shortage in 2020?
h. Saudi: Aramco's IPO 2019?; No more Spare capacity;
i. China: SPR reached 51/90 days; 2018 Imports to decrease?
j. Libya: -850k bpd; Brazil +200k bpd; Canada +200k bpd; Nigeria -300k bpd; Iraq +500k bpd; Kurdistan -350k bpd; US +1m bpd (2019);
k. Venezeula: -1.2m bpd; Worst Case -2m bpd supply (50% cut by 2020)?
l. Iran: -1m bpd; On sanctions: -1.3m bpd?
m. Russia, Saudi, US - no more spare capacity
n. Winter: lower demand for oil
viewtopic.php?f=33&t=7550&start=210

2. Gold - Higher. US$1230 from US$1222 from US$1207
Support: $1150; $1050; Resistance: $1400
a. Global 33,000 tons; US 8000t; China 5000t; IMF 3000t; Germany 3000t
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
g. Gold only occupies 0.03% of US investments. In 1981, it was 8%
h: India Demand: Since 2010, down each year. 2017 (700t); 2020 (900t)
i. China Demand: Since 2013, decreased 33% from 940t to 630t last year
j. Global Demand: 2Q 2018: China +5%; India -8%; US & Eur ETFs buyers;
k. Central Banks: +20% yoy; Strong Russian buying
l. U.S. government holds 261.5m ounces at book value of US$42m
m. China: Reserves 185m oz; 400m oz ground; Output decreased 6% yoy
n. US: Reserve 260m oz
viewtopic.php?f=33&t=7589&p=202084#p202084

3. Silver - Flat. US$14.65 from US$14.63 from US$14.67
a. Support: US$16.10; US$15.20; Resistance: US$18.50; High: US$49
b. LED chips, Cell Phones, Nuclear Reactors, Photography, Solar Panels, RFID Chips, Semiconductors, Water Purification, Data Storage, Antibacterial products, Silver Coins, Jewelery
c. Demand: 1.2b ounces in 2015;
d. Supply: 0.9b ounces in 2015.
e. 4th year of deficit
f. 35% (7700 metric tons) for Electronics
g. 25% (5500 metric tons) for Bullions & Coins
h. India imports more Silver than the US
i. JPM has 67m ounces
j. High Gold/Siver Ratio: 50 t0 70; Currently 76, 50% higher than average
k, Production declining
l. Demand: 40% Investments / Speculation; 60% Industrial
m. About 1b ounces stored in China; 1 Year Production
n. How will US tariffs on Solar Panels affect silver prices?
viewtopic.php?f=33&t=7589&p=202084#p202084

4. Platinum - Lower; US$834 from US$842 from US$825
a. 28% for jewelry
b. 42% for diesel catalytic converters
c. Remainder for other industrial applications
d. Huge discount to Gold
e. Sixth year of deficit
f. 10 times more gold than platinum
g. Costlier to mine than gold as located deeper
h. Diesel cars losing market share
i. Strong demand from vehicles destroyed by Hurricanes (1m cars)

5. Zinc - Lower; US$2627 from US$2633 from US$2625
a. Global Demand: +14% pa for past 4 years
b. Supply: 13.7 tons; Supply Deficit 1.2m tons;
b. Breakpoint: High US$4400 (2007); Low $1600 (Jan 2016)
d. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer
e. Zinc inventories at the LME have dropped to their lowest level since 2009
f. Vehicle: DB Base Metal (Zinc, Aluminum & Copper); MMG
viewtopic.php?f=33&t=367&start=208.

6. Copper - Lower; US$2.78 from US$2.81 from US$2.76
a. Higher inventories at LME
b. China - 50% of global consumption
c. China - Lower Power Grid demand
viewtopic.php?f=33&t=5598&p=215285#p215285

7. Aluminium - Lower; US$2009 from US$2029 from US$2118
a. Sanctions on Rusal has removed 7% of world's supply

8. Uranium - Flat; US$27.70 from US$27.50 from US$27.35
a. Breakeven: US$40 per lb
b. Range: $20 (2005) to $136 (2008); 580% rise in two years
c. Global Supply: 158m lbs pa; 15% from decommisioned weapons
d. Global Demand: 190m lbs pa to 300m lbs pa (2030)
e. Stockpile: 1b lbs (till 2022?) ; Companies normally store 5 years supply
f. Japanese Demand: 3m lbs pa; Starting 21/54 reactors? Currently, only 9
g. No. of Nuclear plants: +8 pa for next 20 yrs, 440 to 595; Current 452
h. 56 new reactors being built; 481 planned;
i. China: 35 existing plants; Building 21; To build 177 more?
j. India: 22 existing nuclear plants; Building 5; To build 64 more?
k. 25% long-term contracts expiring in 2017-18; 75% between 2017-25
l. 200 European nuclear reactors will be shut down over the next 25 years
m. France: Reduce nuclear to 50% from 75% by 2025 and closure of 20
n. Long term contracts being locked at US$40, twice spot rates
o. Kazakhtan reducing supply by 10% (40% of global production)
p. Competition: Natural Gas, Solar, Wind, Wave etc
q. US: Nuclear - 20% of electricity; 99/447 Plants; 25% drop by 2025; Two Year Moratorium on Closure
r. Supply: 50k tons; Demand: 68k tons; 2k tons enriched for weapons
s. 1b pounds to be purchased for long-term contracts over next 5-10 years
t. Average reactor needs 600,000 to 700,000 pounds to run for a year
u. US: 100/420 reactors; Importing 95% uranium; Demand 50m lbs pa
v. Uranium from Sea Water; Viable at US$180/kg (US$80/lbs); Timing?
w. Glut at 15m pounds (23 reactors for 1 year)
x. Cameco mothballed McArthur River & Key Lake; 10% world's supply
y. Kazatomprom, world's second largest, cut production by 20% for 3 yrs
z. Russia banning export of Uranium?

8. Cobalt; Higher; $26.31 ($58,000/t) from $26.31 ($58,000/t) from $25.17 ($55,500/t); Low $10; High US$43
a. Electric Vehicles (8 kg), Smartphones (8 grams), Jet Engines; Gigafactories
b. Congo: Supplies >50% world's supply; Child Labor?
c. Demand: 8% to 10% pa
d. Shortage: 2022 and beyond
e. Cobalt Reduced EV is 5-10 years away? Musk: Reducing Cobalt in Tesla;
f. 2018: 1m EVs (10k tonnes); 2027: 27m ( 27m tonnes)

9. If there's a crash, Commodities would not be spared
10. The High USD is not good for Commodities


Equities - Risk-Off/b] (Data as of Saturday every week)

1. US Equities - Lower. 2768 from 2886 last week from 2914 two weeks ago
a. Support 2740; 2560; Resistance: 3000; Fwd PE 16
b. Traded LABD (Biotech Inverse 3x)
c. Traded UVXY (Volatility 3x)
d. Traded SQQQ (Nasdaq 100 Inverse 3x)
e. Sold PSLV (Physical Silver)
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Lower. 25561 from 25801 from 26573
a. Support: 25000; 24500, 23500; Resistance: 28400; 31600;
b. Sold HKEX (0388)
c. Sold Fosun (0656)
d. Bought Sands China (1928)
e. Bought CNOOC (0883)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Lower. 2550 from 2607 from 2821
a. Support: 2450; Resistance 2900; 3300; 3600
b. Traded A50 (2822) listed in HK
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Lower; 3063 from 3076 from 3207
a. Resistance 3850
b. Bought Genting Singapore
c. Sold some HPL
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Lower. 22532 from 22695 from 23784
a. Forward PE 13
b. Resistance 25000
c. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Flat; 1732 from 1731 from 1777
a. Bought Datasonic
viewtopic.php?f=10&t=6292&start=30



[b]Currencies- Risk Off
(Data from XE.com)

1. USD to JPY - JPY Weaker; 112.41 from 112.26 last week from 113.85 two weeks ago
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Why is it a Safe Haven ?
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Flat; 3.0173 from 3.0172 from 3.0032
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.7141 from 0.7118 from 0.7058
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. I need to diversify my AUD into another currency
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Stronger. 0.9837 from 0.9802 from 0.9757
a. The range is 0.98 (2016) to 1.36 (2012).
b. I would choose the AUD over the SGD

5. AUD to MYR - AUD Stronger. 2.9686 from 2.9588 from 2.9253
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Weaker. 1.1464 from 1.1587 from 1.1490
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Weaker. 7.8394 from 7.8352 from 7.8339
a. 52 week range is 7.7452 - 7.8530
b. USD Peg band: 7.75 to 7.85
c. Will they remove the peg to the USD during the next crisis?
d. Will China ask HK to depeg from the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Weaker. 4.1576 from 4.1539 from 4.1500
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9. USD to SGD:-

9. USD to SGD:- SGD Flat; 1.3778 from 1.3770 from 1.3802
a. High 1.70 (2004); Low 1.20 (2011)
b. Am very uncomfortable holding the currency of a small country
viewtopic.php?f=32&t=136&start=100

10. USD to CNY:- CNY Weaker; 6.9292 from 6.9230 from 6.8694
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Weaker; 1.3024 from 1.3219 from 1.3043
a. Brexit; Politics;
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Stronger; 5.4152 from 5.4927 from 5.4041

13. Dollar Index - USD Stronger 95.98 from 95.08 from 95.85
viewtopic.php?f=32&t=7616&start=60


Others

Sentiment - Complacent?

Headwinds
i) Derivatives (US$700t);
ii) Debts (US$237t, 318% GDP);
iii) Corporate Debt (US$50t); US Corp Debts (US$6t)
iv) Institutional Investors (US$0.5t)
v) ETFs AUM (US$3.4t)
vi) Bitcoin (US$200b)
vii) US Pension Short-Fall: US$385b
viii) NPLs at European Banks: EUR$1t
ix) China's Bond Market: US$12t (third largest)

Tailwinds
a. Low Interest Rates
b. Cash Sidelines (US$50t)
c. QE US$18t: US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t)
d. Negative Yield Bonds (US$6t from US$10t)
e. US Foreign Funds Repatriation (US$2.5t)
f. Cash US Corporations (US$1t)
g. Cash Japanese Corporations (US$2t)
h. Buybacks: US$120b 2Q, 2017 (-10% qoq; -6% yoy); US$3.2t since 2009; i. US Household Net Worth (US$90t)
j. EM Consumption
k. Private Client Cash Levels as a % of Total Assets: Record Low (10.4%)
l. Institutional Investors: lowest levels of cash for past 8 years; 1/3 high in 2016
m. Private Equities: US$600b Cash

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

HK Properties
1. Vacancy tax
2. 9000 vacant apartments
3. CLSA, UBS and Citi - Prices may 10% to 15% by end 2019
4. Rising Interest rates
5. Slowing Economy
6. Depreciating Yuan
7. Weak Stock Markets

Spore Properties
1. 60,000 Units of Supply (7 years Supply of 6500 Homes per year )

Malaysian Properties
1. NAPIC: Overhang - 29,200 units (2018) vs 20,800 (2017) vs 13,400 (2016)
2. Overhang would be greater if Serviced Residence and SOHOs are included

Yield on 10 Year US Treasuries - Higher; 3.19% from 3.16% last week from 3.23% two weeks ago
a. Low 1.32%; High 3.12%
b. Resistance 3.3%

Yield on 2 Year Treasuries - Higher; 2.90% from 2.85% from 2.88%

Interest Rates:-
a. Expecting US Interest Rates to slowly rise over next 2 years
b. About US$6t or about 15% of the world’s bonds have negative yields
c. US rate hike in Dec, 2018? Three in 2019? One in 2020?
d. Argentina's Intertest Rate: 60%
e. Turkey's Interest Rate: 24%
f. Ukraine's Interest rate: 18%
viewtopic.php?f=16&t=7319&p=221670#p221670


JNK (SPDR Barclays High Yield Bond ETF) - Lower; 35.37 from 35.50 from 35.55

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 84.90 from 85.15 from 85.30

Baltic Dry Index - Lower; 1576 from 1579 from 1554; Low 290; High 2330 (2013)


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. 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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winston
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Re: Winston's Investment Ideas 04 (Oct 15 - Dec 18)

Postby winston » Sun Oct 28, 2018 9:32 am

Weekly Risk Management Progress Report:-
1. Reduce Equities: Worse (Increased from 36% to 41% of Liquid Assets)
2. Buy Inverse ETFs and Puts - No Progress
3. Increase "USD/HKD/Gold" - Slight Progress (24% to 25%)


Market Risk Indicators
1. Euphoria: 7 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;
2. Credit Problems: 8 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;
3. Recession: 8 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;
4. Liquidity: 7 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;
5. Inverted Yield: 8 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020
6. Valuation; 8 (Safe 1: PE15; Danger 10: PE30) - PE S&P 24, Nadsaq 26; Revenue; USD; Tax Reform; Deregulation
7. Geopolitical Issues: 8 (Peaceful: 1; War: 10) - NKorea; Syria; Iran; Qatar, Afghanistan; South China Sea; Europe; Venezuela; Russia
Total: 53 out of 70 (76%); (Safe: 50%; Danger: 80%)


Commodities: Risk-Off (Data from Commodities Live)

1. WTI Oil - Lower. US$67.68 from US$69.37 last week from US$74.31 two weeks ago; Support: US$58; US$34; Resistance: US$75, US$105
a. Trade Wars will reduce demand for Oil? -100k bpd?
b. Stockpiles: 2.5b barrels;
c. US SPR: 679m barrels (33 days); To sell 190m over 8 years.
d. US imports 8m bpd (Total Demand of India and Japan combined)
e. China (4th largest producer; largest importer) - Reserve life: 10 to 6 years
f. China: Ban on Petrolchemical Cars in 5-10 years ? Quotas?
g. IEA: Lowest amount of new discoveries; Supply shortage in 2020?
h. Saudi: Aramco's IPO 2019?; +300k bpd; No more Spare capacity;
i. China: SPR reached 51/90 days; 2018 Imports to decrease?
j. Libya: -850k bpd; Brazil +200k bpd; Canada +200k bpd; Nigeria -300k bpd; Iraq +500k bpd; Kurdistan -350k bpd; US +1m bpd (2019);
k. Venezeula: -1.2m bpd; Worst Case -2m bpd supply (50% cut by 2020)?
l. Iran: -1m bpd; On sanctions: -1.3m bpd?
m. Russia, Saudi, US - no more spare capacity
n. Winter: lower demand for oil
viewtopic.php?f=33&t=7550&start=210

2. Gold - Higher. US$1236 from US$1230 from US$1222
Support: $1150; $1050; Resistance: $1400
a. Global 33,000 tons; US 8000t; China 5000t; IMF 3000t; Germany 3000t
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
g. Gold only occupies 0.03% of US investments. In 1981, it was 8%
h: India Demand: Since 2010, down each year. 2017 (700t); 2020 (900t)
i. China Demand: Since 2013, decreased 33% from 940t to 630t last year
j. Global Demand: 2Q 2018: China +5%; India -8%; US & Eur ETFs buyers;
k. Central Banks: +20% yoy; Strong Russian buying
l. U.S. government holds 261.5m ounces at book value of US$42m
m. China: Reserves 185m oz; 400m oz ground; Output decreased 6% yoy
viewtopic.php?f=33&t=7589&p=202084#p202084

3. Silver - Higher. US$14.72 from US$14.65 from US$14.63
a. Support: US$16.10; US$15.20; Resistance: US$18.50; High: US$49
b. LED chips, Cell Phones, Nuclear Reactors, Photography, Solar Panels, RFID Chips, Semiconductors, Water Purification, Data Storage, Antibacterial products, Silver Coins, Jewelery
c. Demand: 1.2b ounces in 2015;
d. Supply: 0.9b ounces in 2015.
e. 4th year of deficit
f. 35% (7700 metric tons) for Electronics
g. 25% (5500 metric tons) for Bullions & Coins
h. India imports more Silver than the US
i. JPM has 67m ounces
j. High Gold/Siver Ratio: 50 t0 70; Currently 76, 50% higher than average
k, Production declining
l. Demand: 40% Investments / Speculation; 60% Industrial
m. About 1b ounces stored in China; 1 Year Production
n. How will US tariffs on Solar Panels affect silver prices?
viewtopic.php?f=33&t=7589&p=202084#p202084

4. Platinum - Higher; US$836 from US$834 from US$842
a. 28% for jewelry
b. 42% for diesel catalytic converters
c. Remainder for other industrial applications
d. Huge discount to Gold
e. Sixth year of deficit
f. 10 times more gold than platinum
g. Costlier to mine than gold as located deeper
h. Diesel cars losing market share
i. Strong demand from vehicles destroyed by Hurricanes (1m cars)

5. Zinc - Higher; US$2654 from US$2627 from US$2633
a. Global Demand: +14% pa for past 4 years
b. Supply: 13.7 tons; Supply Deficit 1.2m tons;
b. Breakpoint: High US$4400 (2007); Low $1600 (Jan 2016)
d. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer
e. Zinc inventories at the LME have dropped to their lowest level since 2009
f. Vehicle: DB Base Metal (Zinc, Aluminum & Copper); MMG
viewtopic.php?f=33&t=367&start=208.

6. Copper - Lower; US$2.75 from US$2.78 from US$2.81
a. Higher inventories at LME
b. China - 50% of global consumption
c. China - Lower Power Grid demand
viewtopic.php?f=33&t=5598&p=215285#p215285

7. Aluminium - Lower; US$1991 from US$2009 from US$2029
a. Sanctions on Rusal has removed 7% of world's supply

8. Uranium - Flat; US$27.80 from US$27.70 from US$27.50
a. Breakeven: US$40 per lb; Long-Term Contract - 2x Spot
b. Range: $20 (2005) to $136 (2008); 580% rise in two years
c. Global Supply: 158m lbs pa; 15% from decommisioned weapons
d. Global Demand: 190m lbs pa to 300m lbs pa (2030)
e. Stockpile: 1b lbs (till 2022?) ; Companies normally store 5 years supply
f. Japanese Demand: 3m lbs pa; Starting 21/54 reactors? Currently, only 9
g. No. of Nuclear plants: +8 pa for next 20 yrs, 440 to 595; Current 452
h. 56 new reactors being built; 481 planned;
i. China: 35 existing plants; Building 21; To build 177 more?
j. India: 22 existing nuclear plants; Building 5; To build 64 more?
k. 75% long-term contracts expiring between 2017-25
l. 200 European nuclear reactors will be shut down over the next 25 years
m. France: Reduce nuclear to 50% from 75% by 2025 and closure of 20
n. Nuclear Treaty - US pulling out
o. Kazakhtan reducing supply by 10% (40% of global production)
p. Competition: Natural Gas, Solar, Wind, Wave etc
q. US: Nuclear - 20% of electricity; 99/447 Plants; 25% drop by 2025; Two Year Moratorium on Closure
r. Supply: 50k tons; Demand: 68k tons; 2k tons enriched for weapons
s. 1b pounds to be purchased for long-term contracts over next 5-10 years
t. Average reactor needs around 650,000 pounds to run for a year
u. US: 100/420 reactors; Importing 95% uranium; Demand 50m lbs pa
v. Uranium from Sea Water; Viable at US$180/kg (US$80/lbs); Timing?
w. Glut at 15m pounds (23 reactors for 1 year)
x. Cameco mothballed McArthur River & Key Lake; 10% world's supply
y. Kazatomprom, world's second largest, cut production by 20% for 3 yrs
z. Russia banning export of Uranium?

8. Cobalt; Higher; $27.56 ($60750/t) from $26.31 ($58,000/t) from $26.31 ($58,000/t); Low $10; High US$43
a. Electric Vehicles (8 kg), Smartphones (8 grams), Jet Engines; Gigafactories
b. Congo: Supplies >50% world's supply; Child Labor?
c. Demand: 8% to 10% pa
d. Shortage: 2022 and beyond
e. Cobalt Reduced EV is 5-10 years away? Musk: Reducing Cobalt in Tesla;
f. 2018: 1m EVs (10k tonnes); 2027: 27m ( 27m tonnes)
g. Target: 2018 - US$62,000/t; 2022 - US$44.000/t

9. If there's a crash, Commodities would not be spared
10. The High USD is not good for Commodities


Equities - Risk-Off/b] (Data as of Saturday every week)

1. US Equities - Lower. 2659 from 2768 last week from 2886 two weeks ago
a. Support: 2740; 2560; Resistance: 3000; Fwd PE 16
b. No Trade
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Lower. 24718 from 25561 from 25801
a. Support: 24500, 23500; Resistance: 28400; 31600;
b. Bought Sands China (1928)
c. Bought CNOOC (0883)
d. Bought Sunny Optical
e. Bought AAC
f. Bought SJM
g. Bought Galaxy
h. Bought MMG
i. Added to Tencent
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Higher. 2599 from 2550 from 2607
a. Support: 2450; Resistance 2900; 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Lower; 2972 from 3063 from 3076
a. Resistance 3850
b. No Trade
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Lower. 21185 from 22532 from 22695
a. Forward PE 13
b. Resistance 25000
c. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Lower; 1683 from 1732 from 1731
a. Sold Datasonic
viewtopic.php?f=10&t=6292&start=30



[b]Currencies- Risk Off
(Data from XE.com)

1. USD to JPY - JPY Stronger; 111.99 from 112.41 last week from 112.26 two weeks ago
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Why is it a Safe Haven ?
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger; 3.0238 from 3.0173 from 3.0172
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Weaker; 0.7030 from 0.7141 from 0.7118
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. I need to diversify my AUD into another currency
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Weaker. 0.9731 from 0.9837 from 0.9802
a. The range is 0.98 (2016) to 1.36 (2012).
b. I would choose the AUD over the SGD

5. AUD to MYR - AUD Weaker. 2.9408 from 2.9686 from 2.9588
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Weaker. 1.1341 from 1.1464 from 1.1587
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Weaker. 7.8407 from 7.8394 from 7.8352
a. 52 week range is 7.7452 - 7.8530
b. USD Peg band: 7.75 to 7.85
c. Will they remove the peg to the USD during the next crisis?
d. Will China ask HK to depeg from the USD?
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Weaker. 4.1850 from 4.1576 from 4.1539
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9. USD to SGD:-

9. USD to SGD:- SGD Weaker; 1.3843 from 1.3778 from 1.3770
a. High 1.70 (2004); Low 1.20 (2011)
b. Am very uncomfortable holding the currency of a small country
viewtopic.php?f=32&t=136&start=100

10. USD to CNY:- CNY Weaker; 6.9458 from 6.9292 from 6.9230
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Weaker; 1.2782 from 1.3024 from 1.3219
a. Brexit; Politics;
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Weaker; 5.3510 from 5.4152 from 5.4927

13. Dollar Index - USD Stronger 96.83 from 95.98 from 95.08
viewtopic.php?f=32&t=7616&start=60


Others

Sentiment - Complacent?

Headwinds
i) Derivatives (US$700t);
ii) Debts (US$237t, 318% GDP);
iii) Corporate Debt (US$50t); US Corp Debts (US$6t)
iv) Institutional Investors (US$0.5t)
v) ETFs AUM (US$3.4t)
vi) Bitcoin (US$200b)
vii) US Pension Short-Fall: US$385b
viii) NPLs at European Banks: EUR$1t
ix) China's Bond Market: US$12t (third largest)


Tailwinds
a. Low Interest Rates
b. Cash Sidelines (US$50t)
c. QE US$18t: US (US$4.5t), ECB (US$3.7t), Japan (US$4.4t) & China (US$5.1t)
d. Negative Yield Bonds (US$6t from US$10t)
e. US Foreign Funds Repatriation (US$2.5t)
f. Cash US Corporations (US$1t)
g. Cash Japanese Corporations (US$2t)
h. Buybacks: US$120b 2Q, 2017 (-10% qoq; -6% yoy); US$3.2t since 2009; i. US Household Net Worth (US$90t)
j. EM Consumption
k. Private Client Cash Levels as a % of Total Assets: Record Low (10.4%)
l. Institutional Investors: lowest levels of cash for past 8 years; 1/3 high in 2016
m. Private Equities: US$600b Cash

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

HK Properties
1. Vacancy tax
2. 9000 vacant apartments
3. CLSA, UBS and Citi - Prices may drop 10% to 15% by end 2019
4. Rising Interest rates
5. Slowing Economy / Trade War
6. Depreciating Yuan
7. Weak Stock Markets

Spore Properties
1. 60,000 Units of Supply (7 years Supply of 6500 Homes per year )

Malaysian Properties
1. NAPIC: Overhang - 29,200 units (2018) vs 20,800 (2017) vs 13,400 (2016)
2. Overhang would be greater if Serviced Residence and SOHOs are included

Yield on 10 Year US Treasuries - Lower; 3.08% from 3.19% last week from 3.16% two weeks ago
a. Resistance 3.3%

Yield on 2 Year Treasuries - Lower; 2.81% from 2.90% from 2.85%

Interest Rates:-
a. Expecting US Interest Rates to slowly rise over next 2 years
b. About US$6t or about 15% of the world’s bonds have negative yields
c. US rate hike in Dec, 2018? Three in 2019? One in 2020?
d. Argentina's Intertest Rate: 60%
e. Turkey's Interest Rate: 24%
f. Ukraine's Interest rate: 18%
viewtopic.php?f=16&t=7319&p=221670#p221670


JNK (SPDR Barclays High Yield Bond ETF) - Lower; 35.09 from 35.37 from 35.50

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 84.23 from 84.90 from 85.15

Baltic Dry Index - Lower; 1516 from 1576 from 1579; Low 290; High 2330 (2013)


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. 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
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118522
Joined: Wed May 07, 2008 9:28 am

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