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

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

Postby winston » Sun Apr 01, 2018 9:54 am

TOL @ Apr 01, 2018

New Money From The New Month

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

Therefore, we should get at least one spike in the markets next week, unless the Fund Managers have already spent their money in advance on Thursday, for Window Dressing.

Anyway, over the next two weeks, I'm expecting the US markets to be treading water, until about April 13th, the start of the US Earnings season.

As for the Trade War between the US and China, I'm still not expecting a full blown one.

In view of the above, I may still buy on any sharp dip but will not chase any rip.


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: 8 (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: 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$64.89 from US$65.81 from US$62.24 last week from US$62.14 two weeks ago; Support: US$58; Resistance: US$66
a. Glut 0.5m bpd; Rebalancing in 3Q 2018?
b. Stockpiles: 2.5b barrels;
c. US SPR: 679m barrels (33 days); To sell 190m over 8 years. Released 1m;
d. US imports 8m bpd (Total Demand of India and Japan combined)
e. US: Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells;
f. US: Active rigs doubled, Currently, 743 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; Cutting 1m bpd
k. China: SPR reached 51/90 days; 2018 Imports to decrease?
l. Libya: -400k bpd; Brazil +200k bpd; Canada +200k bpd; Nigeria +225k 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: -250k to -700k; Worst Case -2m bpd supply (50% cut by 2020)?
viewtopic.php?f=33&t=7550&start=210

2. Gold - Lower. US$1325 from US$1347 from US$1314. Record US$1920.
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: H 2017: -14%; 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. Mid-Term Bullish but Short Term Bearish?
n. China: Reserves 160m oz; 400m oz ground;
o. US: Reserve 260m oz
viewtopic.php?f=33&t=7589&p=202084#p202084

3. Silver - Lower. US$16.34 from US$16.56 from US$16.34
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
viewtopic.php?f=33&t=7589&p=202084#p202084

4. Platinum - Lower; US$937 from US$950 from US$951
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. Demand from vehicles destroyed by Hurricanes (1m cars)
j. 2016: 17.5m cars sold in US

5. Zinc - Higher; US$3278 from US$3218 from US$3255
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$3.02 from US$2.98 from US$3.11
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. Uranium - Lower; US$21.10 from US$21.85 from US$21.90
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: 160m lbs pa to 225m lbs pa (2025)
e. Stockpile: 1b lbs (till 2022?) ; Companies normally store 5 years supply
f. Japanese Demand: 13 lbs pa; Starting 21/54 reactors? Currently, only 5
g. Number of Nuclear plants: +8 pa for next 20 yrs, 440 to 595; Current 456
h. 61 new reactors under construction; 149 planned; How many would be built ?
i. China: 35 existing plants; Building 21; 2017: 7 Ready: To build 177 more?
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more?
k. 25% long-term contracts expiring in 2017-18; 75% between 2017-2025;
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. Some buyers are locking in long term contracts 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. Nuclear: 20% of the electricity generated in the U.S
r. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons
s. 1b pounds has 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% of its uranium requirements
v. New technology to mine Uranium from sea water? Cost and How Soon?
w. Glut at 15m pounds (23 reactors for 1 year)
x. Cameco, world's largest, mothballed mine for 10 mths; 10% world's supply
y. Kazatomprom, world's second largest, cut production by 20% for 3 years

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


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

1. US Equities - Higher. 2641 from 2588 last week from 2752 two weeks ago.
a. Support 2560; 2400; Resistance: 2900
b. Sold SINA
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Lower. 30093 from 30309 from 31502
a. Support: 26900; Resistance: 38,000; 43,000
b. Sold Fosun (0656)
c. Sold ICBC (1398)
d. Sold AAC (2018)
e. Sold Ping An (2318)
f. Sold Tencent (0700)
g. Bought Zhaojin (1818)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Higher. 3169 from 3153 from 3270
a. Support: 3210; 2950; 2450; Resistance 3600
b. Sold A50 (2822) listed in HK
viewtopic.php?f=10&t=7190&start=210


4. Spore Equities - Higher; 3428 from 3421 from 3512
a. Sold HK Land
b. Traded Creative
c. Traded OCBC
d. Sold jardine Strategic
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Higher. 21454 from 20618 from 21676
a. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Lower; 1863 from 1865 from 1846
a. No Trade
viewtopic.php?f=10&t=6292&start=30


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

1. USD to JPY - JPY Weaker. 106.29 from 104.73 last week from 105.98 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 ?
e. Nikkei down 14% this correction
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Weaker 2.9477 from 2.9779 from 2.9666
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Weaker; 0.7681 from 0.7697 from 0.7713
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. 1.0071 from 1.0125 from 1.0165
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. 2.9684 from 3.0152 from 3.0157
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Weaker. 1.2324 from 1.2356 from 1.2290
viewtopic.php?f=32&t=5523&start=100Flat. EUR to MYR -

7. EUR to MYR - EUR Weaker; 4.7629 from 4.8403 from 4.8047
Flat. USD to HKD - HKD Stronger. 7.8186 from 7.8210 from 7.8178
a. 52 week range is 7.7452 - 7.8296.
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

9. USD to MYR:- MYR Stronger. 3.8647 from 3.9175 from 3.9095
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998);
c. Macquarie: 4.90 (Dec 31, 2017)
d. UOB: 4.35 (July 2017)
e. When is the right time to diversify from the MYR?
viewtopic.php?f=32&t=397&start=60

10. USD to SGD:- SGD Stronger; 1.3111 from 1.3155 from 1.3179
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

11. USD to CNY:- CNY Stronger; 6.2741 from 6.3033 from 6.3306
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

12. GBP to USD:- GBP Weaker. 1.4014 from 1.4134 from 1.3945
a. Brexit; Politics;
viewtopic.php?f=32&t=333&start=80

13. GBP to MYR:- GBP Weaker. 5.4149 from 5.5368 from 5.4518
a. Which is worst - Brexit or Malaysian Election?

14. CHF to MYR:- CHF Weaker; 4.0519 from 4.1356 from 4.1063

15. Dollar Index - USD Stronger. 89.97 from 89.44 from 90.21
viewtopic.php?f=32&t=7616&start=60


Yield on 10 Year US Treasuries - Lower. 2.74% from 2.81% last week from 2.84% two weeks ago
a. Low 1.32%; High 2.69%.

Yield on 2 Year Treasuries - Higher; 2.27% from 2.25% from 2.29%

Interest Rates:-
a. Expecting 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. Three rate hikes in 2018? Two in 2019?
viewtopic.php?f=16&t=7319&start=70

JNK (SPDR Barclays High Yield Bond ETF) - Higher; 35.85 from 35.62 from 35.97

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 85.64 from 84.92 from 85.80

Baltic Dry Index - Lower; 1005 from 1117 from 1150; Low 290; High 2330 (2013)


The above is to 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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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 Apr 08, 2018 7:23 pm

TOL @ Apr 09, 2018

Buy, Sell or Hold?

The markets have been volatile for the past few weeks and it's a good time to decide on whether to Buy, Sell or Hold.

The Bulls are saying that fundamentals have not really changed and the coming US Earnings season would be a good catalyst for the markets to rebound. They also believe that this Trade War will not escalate into a full blown one. They also point to the improving situation with North Korea.

The Bears are pointing to the charts and saying that the next supports on the US markets would be breached ie. 2533, 2470, 2417 and 2298. They also think that there would a full blown trade war and that any rally from the US earnings season should be sold. They do not think that there would be much improvement with North Korea.

And there are those complacent ones who are surprised with the above issues and do not really know what to do, as it's too low to sell now but not low enough to buy.

Intuitively, I think that the right strategy is to sell into any rallies. At the same time time, any buying has to be with a higher margin of safety.

Volatility and Sentiment have changed and Fundamentals are also changing quickly with the many moving parts. Having more bullets to buy on any panic, does not sound too unreasonable now.


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: 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?;
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; 7 (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$61.92 from US$64.89 last week from US$65.81 two weeks ago; Support: US$58; Resistance: US$66
a. Glut 0.5m bpd; Rebalancing in 3Q 2018?
b. Stockpiles: 2.5b barrels;
c. US SPR: 679m barrels (33 days); To sell 190m over 8 years. Released 1m;
d. US imports 8m bpd (Total Demand of India and Japan combined)
e. US: Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells;
f. US: Active rigs doubled, Currently, 743 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; Cutting 1m bpd
k. China: SPR reached 51/90 days; 2018 Imports to decrease?
l. Libya: -400k bpd; Brazil +200k bpd; Canada +200k bpd; Nigeria +225k 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: -250k to -700k; Worst Case -2m bpd supply (50% cut by 2020)?
viewtopic.php?f=33&t=7550&start=210

2. Gold - Higher. US$1337 from US$1325 from US$1347. Record US$1920.
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: H 2017: -14%; 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. Mid-Term Bullish but Short Term Bearish?
n. China: Reserves 160m oz; 400m oz ground;
o. US: Reserve 260m oz
viewtopic.php?f=33&t=7589&p=202084#p202084

3. Silver - Higher. US$16.37 from US$16.34 from US$16.56
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
viewtopic.php?f=33&t=7589&p=202084#p202084

4. Platinum - Lower; US$921 from US$937 from US$950
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. Demand from vehicles destroyed by Hurricanes (1m cars)
j. 2016: 17.5m cars sold in US

5. Zinc - Lower; US$3253 from US$3278 from US$3218
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$3.04 from US$3.02 from US$2.98
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. Uranium - Lower; US$21.00 frpm US$21.10 from US$21.85
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: 160m lbs pa to 225m lbs pa (2025)
e. Stockpile: 1b lbs (till 2022?) ; Companies normally store 5 years supply
f. Japanese Demand: 13 lbs pa; Starting 21/54 reactors? Currently, only 5
g. Number of Nuclear plants: +8 pa for next 20 yrs, 440 to 595; Current 456
h. 61 new reactors under construction; 149 planned; How many would be built ?
i. China: 35 existing plants; Building 21; 2017: 7 Ready: To build 177 more?
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more?
k. 25% long-term contracts expiring in 2017-18; 75% between 2017-2025;
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. Some buyers are locking in long term contracts 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. Nuclear: 20% of the electricity generated in the U.S
r. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons
s. 1b pounds has 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% of its uranium requirements
v. New technology to mine Uranium from sea water? Cost and How Soon?
w. Glut at 15m pounds (23 reactors for 1 year)
x. Cameco, world's largest, mothballed mine for 10 mths; 10% world's supply
y. Kazatomprom, world's second largest, cut production by 20% for 3 years

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


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

1. US Equities - Higher. 2604 from 2588 last week from 2752 two weeks ago.
a. Support 2560; 2400; Resistance: 2900
b. Sold General Mills (GIS)
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Lower. 29845 from 30093 from 30309
a. Support: 26900; Resistance: 38,000; 43,000
b. Sold Tencent (0700)
c. Sold BBMG (2009)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Lower. 3131 from 3169 from 3153
a. Support: 3210; 2950; 2450; Resistance 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210


4. Spore Equities - Higher; 3443 from 3428 from 3421
a. No Trade
viewtopic.php?f=10&t=6828&start=b110


5. Japan Equities - Higher. 21568 from 21454 from 20618
a. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Lower; 1837 from 1863 from 1865
a. No Trade
viewtopic.php?f=10&t=6292&start=30


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

1. USD to JPY - JPY Weaker. 107.39 from 106.29 last week from 104.73 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 ?
e. Nikkei down 14% this correction
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Weaker 2.9350 from 2.9477 from 2.9779
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Flat; 0.7680 from 0.7681 from 0.7697
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. 1.0128 from 1.0071 from 1.0125
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. 2.9728 from 2.9684 from 3.0152
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Weaker. 1.2241 from 1.2324 from 1.2356
viewtopic.php?f=32&t=5523&start=100Flat. EUR to MYR -

7. EUR to MYR - EUR Weaker; 4.7376 from 4.7629 from 4.8403
Flat. USD to HKD - HKD Stronger. 7.8186 from 7.8210 from 7.8178
a. 52 week range is 7.7452 - 7.8296.
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

9. USD to MYR:- MYR Weaker. 3.8701 from 3.8647 from 3.9175
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998);
c. Macquarie: 4.90 (Dec 31, 2017)
d. UOB: 4.35 (July 2017)
e. When is the right time to diversify from the MYR?
viewtopic.php?f=32&t=397&start=60

10. USD to SGD:- SGD Weaker; 1.3187 from 1.3111 from 1.3155
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

11. USD to CNY:- CNY Weaker; 6.3048 from 6.2741 from 6.3033
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

12. GBP to USD:- GBP Flat. 1.4013 from 1.4014 from 1.4134
a. Brexit; Politics;
viewtopic.php?f=32&t=333&start=80

13. GBP to MYR:- GBP Stronger. 5.4239 from 5.4149 from 5.5368
a. Which is worst - Brexit or Malaysian Election?

14. CHF to MYR:- CHF Weaker; 4.0183 from 4.0519 from 4.1356

15. Dollar Index - USD Stronger. 90.44 from 89.97 from 89.44
viewtopic.php?f=32&t=7616&start=60


Yield on 10 Year US Treasuries - Higher. 2.82% from 2.74% last week from 2.81% two weeks ago
a. Low 1.32%; High 2.69%.

Yield on 2 Year Treasuries - Higher; 2.30% from 2.27% from 2.25%

Interest Rates:-
a. Expecting 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. Three rate hikes in 2018? Two in 2019?
viewtopic.php?f=16&t=7319&start=70

JNK (SPDR Barclays High Yield Bond ETF) - Flat; 35.82 from 35.85 from 35.62

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 85.46 from 85.64 from 84.92

Baltic Dry Index - Lower; 953 from 1005 from 1117; Low 290; High 2330 (2013)


The above is to 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.

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viewtopic.php?f=26&t=3168

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

Postby winston » Sun Apr 15, 2018 7:56 am

TOL @ Apr 15. 2018

Beating The High Expectations Of US Earnings?

US Earning Season has started on Friday and the US banks were clobbered.

Maybe it's because of FridayThe 13th. Or maybe it's because expectations are so high this time, that it will be quite difficult to beat them.

In addition, we also have the following that is not helping things:-
1. A Chaotic White House
2. Potential Trade War with China
3. Sanctions on Russia and possibly, Iran
4. Strike on Syria

Although fundamentals have not really changed and there's still ample Liquidity in the markets, Sentiments have certainly being affected.

Therefore, it does not hurt to have a bit more Cash and to be deployed whenever there's a sharp correction.

On the horizon, we have the Kim-Moon Summit which I think that it's probably a non-event.

I'm more concerned that "Sell In May and Go Away" is coming soon. Personally, before I go on any trip, I will sell some of my holdings, especially in this type of markets.

My exposure to Equities is now only about 17% of my Liquid portfolio. It's a bit on the low side and whenever there's any sharp correction, I should buy some Equities, as long as Fundamentals and Liquidity of the markets have not changed.


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: 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?;
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; 7 (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$67.33 from US$61.92 last week from US$64.89 two weeks ago; Support: US$58; Resistance: US$66
a. Rebalancing in 3Q 2018?
b. Stockpiles: 2.5b barrels;
c. US SPR: 679m barrels (33 days); To sell 190m over 8 years. Released 1m;
d. US imports 8m bpd (Total Demand of India and Japan combined)
e. US: Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells;
f. US: Active rigs doubled, Currently, 743 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;
k. China: SPR reached 51/90 days; 2018 Imports to decrease?
l. Libya: -400k bpd; Brazil +200k bpd; Canada +200k bpd; Nigeria +225k 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: -250k to -700k; Worst Case -2m bpd supply (50% cut by 2020)?
o. Trade War will reduce demand for Oil
viewtopic.php?f=33&t=7550&start=210

2. Gold - Higher. US$1348 from US$1337 from US$1325. Record US$1920.
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: H 2017: -14%; 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;
n. US: Reserve 260m oz
viewtopic.php?f=33&t=7589&p=202084#p202084

3. Silver - Higher. US$16.65 from US$16.37 from US$16.34
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$934 from US$921 from US$937
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$3110 from US$3253 from US$3278
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$3.06 from US$3.04 from US$3.02
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. Uranium - Flat; US$21.00 from US$21.00 frpm US$21.10
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: 160m lbs pa to 225m lbs pa (2025)
e. Stockpile: 1b lbs (till 2022?) ; Companies normally store 5 years supply
f. Japanese Demand: 13 lbs pa; Starting 21/54 reactors? Currently, only 5
g. Number of Nuclear plants: +8 pa for next 20 yrs, 440 to 595; Current 456
h. 61 new reactors under construction; 149 planned; How many would be built ?
i. China: 35 existing plants; Building 21; 2017: 7 Ready: To build 177 more?
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more?
k. 25% long-term contracts expiring in 2017-18; 75% between 2017-2025;
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. Some buyers are locking in long term contracts 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. Nuclear: 20% electricity generated in U.S; 100 Plants; 25% drop by 2025
r. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons
s. 1b pounds has 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% of its uranium requirements
v. New technology to mine Uranium from sea water? Cost and How Soon?
w. Glut at 15m pounds (23 reactors for 1 year)
x. Cameco, world's largest, mothballed mine for 10 mths; 10% world's supply
y. Kazatomprom, world's second largest, cut production by 20% for 3 years

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


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

1. US Equities - Higher. 2656 from 2604 last week from 2641 two weeks ago.
a. Support 2560; 2400; Resistance: 2900
b. Sold JO (Coffee ETF)
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Higher. 30808 from 29845 from 30093
a. Support: 30,000; 26900; Resistance: 31600; 38,000; 43,000
b. Sold Sunny Optical (2382)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Higher. 3159 from 3131 from 3169
a. Support: 3210; 2950; 2450; Resistance 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Higher; 3501 from 3443 from 3428
a. Added to HPL
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Higher. 21779 from 21568 from 21454
a. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Higher; 1868 from 1837 from 1863
a. No Trade
viewtopic.php?f=10&t=6292&start=30


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

1. USD to JPY - JPY Weaker. 107.70 from 107.39 last week from 106.29 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 ?
e. Nikkei still down 9%
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger 2.9533 from 2.9350 from 2.9477
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.7797 from 0.7680 from 0.7681
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. 1.0226 from 1.0128 from 1.0071
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. 3.0198 from 2.9728 from 2.9684
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Stronger. 1.2323 from 1.2241 from 1.2324
viewtopic.php?f=32&t=5523&start=100Flat. EUR to MYR -

7. EUR to MYR - EUR Stronger; 4.7725 from 4.7376 from 4.7629
Flat. USD to HKD - HKD Stronger. 7.8186 from 7.8210 from 7.8178
a. 52 week range is 7.7452 - 7.8296.
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

9. USD to MYR:- MYR Weaker. 3.8731 from 3.8701 from 3.8647
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998);
c. Macquarie: 4.90 (Dec 31, 2017)
d. UOB: 4.35 (July 2017)
e. When is the right time to diversify from the MYR?
viewtopic.php?f=32&t=397&start=60

10. USD to SGD:- SGD Stronger; 1.3114 from 1.3187 from 1.3111
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

11. USD to CNY:- CNY Stronger; 6.2815 from 6.3048 from 6.2741
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

12. GBP to USD:- GBP Stronger. 1.4267 from 1.4013 from 1.4014
a. Brexit; Politics;
viewtopic.php?f=32&t=333&start=80

13. GBP to MYR:- GBP Stronger. 5.5264 from 5.4239 from 5.4149
a. Which is worst - Brexit or Malaysian Election?

14. CHF to MYR:- CHF Stronger; 4.0243 from 4.0183 from 4.0519

15. Dollar Index - USD Weaker. 89.79 from 90.44 from 89.97
viewtopic.php?f=32&t=7616&start=60


Others

Sentiment - Complacent?

Headwinds (Global)
i) Derivatives (US$700t);
ii) Debts (US$237t, 318% GDP);
iii) Corporate Debt (US$50t);
iv) Institutional Investors (US$0.5t)
v) ETFs AUM (US$3.4t)
vi) Bitcoin (US$200b)

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

Yield on 10 Year US Treasuries - Higher. 2.84% from 2.82% last week from 2.74% two weeks ago
a. Low 1.32%; High 2.95%.

Yield on 2 Year Treasuries - Higher; 2.35% from 2.30% from 2.27%

Interest Rates:-
a. Expecting 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. Three rate hikes in 2018? Two in 2019?
viewtopic.php?f=16&t=7319&start=70

JNK (SPDR Barclays High Yield Bond ETF) - Higher; 36.14 from 35.82 from 35.85

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 86.24 from 85.46 from 85.64

Baltic Dry Index - Higher; 993 from 953 from 1005; Low 290; High 2330 (2013)


The above is to 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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Re: Winston's Investment Ideas 04 (Oct 15 - Dec 18)

Postby winston » Sun Apr 22, 2018 4:20 pm

TOL @ Apr 22. 2018

Storm.jpg


Is The Storm Over?

The US market has rebounded quite a bit from it's bottom. So where do we go from here?

The Bulls are saying that:-
1. The number of New Highs has bounced
2. The number of New Lows has fallen
3. The Advance/Decline ratio has stabilized
4. Earnings Season is under way and the numbers are good
5. There's still plenty of Liquidity despite the increasing higher interest rates

The Bears are saying that:-
1. The increased Volatility will lead to further declines
2. Increase in Commodity prices will lead to higher Inflation which will lead to higher Interest Rates and hence, lower stock market
3. Trade War with China and Sanctions against Russia and possibly Iran, will affect Sentiments further
4. "Sell in May & Go Away" is just around the corner

Intuitively, I think that both camps maybe correct as this is probably a "Trading Market". Hence, one should try to buy during any sharp correction and at the same time, one must also sell into any strong rally.

For this week, I have been trading Rusal (0486) listed in HK. It has dropped from a high of HK$6.36 to a low of HK$1.31. It's the 2nd largest Aluminium producer in the world and it supplies 7% of the world's aluminium. It made US$1.2b last year and is trading at a historical PE of 2 with a yield of 10%. All American investors have to now divest their holdings by May 7.

Anyway, I think that the price of Rusal is just too "cheap" and it may be worth a bet if one is willing to wait two years for the rebound. Hence, I have taken a position in it, knowing full well that they could suspend or delist the company. I'm expecting Rusal to find a way around the sanctions. You can read my notes on Rusal at:- viewtopic.php?f=40&t=5354

On the horizon, we have the Kim-Moon Summit which is probably a non-event.


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: 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?;
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; 7 (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 - Lower. US$67.75 from US$67.33 last week from US$61.92 two weeks ago; Support: US$58; Resistance: US$70
a. Rebalancing in 3Q 2018?
b. Stockpiles: 2.5b barrels;
c. US SPR: 679m barrels (33 days); To sell 190m over 8 years. Released 1m;
d. US imports 8m bpd (Total Demand of India and Japan combined)
e. US: Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells;
f. US: Active rigs doubled, Currently, 743 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;
k. China: SPR reached 51/90 days; 2018 Imports to decrease?
l. Libya: -400k bpd; Brazil +200k bpd; Canada +200k bpd; Nigeria +225k 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: -250k to -700k; Worst Case -2m bpd supply (50% cut by 2020)?
o. Trade War will reduce demand for Oil
p. How will sanctions on Iran affect Oil prices?
viewtopic.php?f=33&t=7550&start=210

2. Gold - Lower. US$1338 from US$1348 from US$1337. Record US$1920.
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: H 2017: -14%; 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;
n. US: Reserve 260m oz
viewtopic.php?f=33&t=7589&p=202084#p202084

3. Silver - Higher. US$17.11 from US$16.65 from US$16.37
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$929 from US$934 from US$921
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$3241 from US$3110 from US$3253
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$3.14 from US$3.06 from US$3.04
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; US$2473
a. Sanctions on Rusal has removed 7% of world's supply

8. Uranium - Flat; US$20.50 from US$21.00 from US$21.00
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: 160m lbs pa to 225m lbs pa (2025)
e. Stockpile: 1b lbs (till 2022?) ; Companies normally store 5 years supply
f. Japanese Demand: 13 lbs pa; Starting 21/54 reactors? Currently, only 5
g. Number of Nuclear plants: +8 pa for next 20 yrs, 440 to 595; Current 456
h. 61 new reactors under construction; 149 planned; How many would be built ?
i. China: 35 existing plants; Building 21; 2017: 7 Ready: To build 177 more?
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more?
k. 25% long-term contracts expiring in 2017-18; 75% between 2017-2025;
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. Some buyers are locking in long term contracts 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. Nuclear: 20% electricity generated in U.S; 100 Plants; 25% drop by 2025
r. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons
s. 1b pounds has 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. New technology to mine Uranium from sea water? Cost and How Soon?
w. Glut at 15m pounds (23 reactors for 1 year)
x. Cameco, world's largest, mothballed mine for 10 mths; 10% world's supply
y. Kazatomprom, world's second largest, cut production by 20% for 3 years
z. Russia banning export of Uranium?

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


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

1. US Equities - Higher. 2670 from 2656 last week from 2604 two weeks ago.
a. Support 2560; 2400; Resistance: 2900
b. No Trade
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Lower. 30418 from 30808 from 29845
a. Support: 30,000; 26900; Resistance: 31600; 38,000; 43,000
b. Traded Tencent (0700)
c. Traded Rusal (0486)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Lower. 3072 from 3159 from 3131
a. Support: 3210; 2950; 2450; Resistance 3600
b. Traded A50 (2822) listed in HK
viewtopic.php?f=10&t=7190&start=210


4. Spore Equities - Higher; 3573 from 3501 from 3443
a. No Trade
viewtopic.php?f=10&t=6828&start=b110


5. Japan Equities - Higher. 22162 from 21779 from 21568
a. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Higher; 1888 from 1868 from 1837
a. No Trade
viewtopic.php?f=10&t=6292&start=30


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

1. USD to JPY - JPY Flat. 107.66 from 107.70 last week from 107.39 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 ?
e. Nikkei still down 7%
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger 2.9628 from 2.9533 from 2.9350
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Weaker; 0.7693 from 0.7797 from 0.7680
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. 1.0113 from 1.0226 from 1.0128
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. 2.9966 from 3.0198 from 2.9728
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Weaker. 1.2301 from 1.2323 from 1.2241
viewtopic.php?f=32&t=5523&start=100Flat. EUR to MYR -

7. EUR to MYR - EUR Stronger; 4.7913 from 4.7725 from 4.7376
Flat. USD to HKD - HKD Stronger. 7.8186 from 7.8210 from 7.8178
a. 52 week range is 7.7452 - 7.8296.
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

9. USD to MYR:- MYR Weaker. 3.90 from 3.8731 from 3.8701
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998);
c. Macquarie: 4.90 (Dec 31, 2017)
d. UOB: 4.35 (July 2017)
e. When is the right time to diversify from the MYR?
viewtopic.php?f=32&t=397&start=60

10. USD to SGD:- SGD Weaker; 1.3147 from 1.3114 from 1.3187
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

11. USD to CNY:- CNY Weaker; 6.2921 from 6.2815 from 6.3048
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

12. GBP to USD:- GBP Weaker. 1.4064 from 1.4267 from 1.4013
a. Brexit; Politics;
viewtopic.php?f=32&t=333&start=80

13. GBP to MYR:- GBP Weaker. 5.4575 from 5.5264 from 5.4239
a. Which is worst - Brexit or Malaysian Election?

14. CHF to MYR:- CHF Stronger; 3.9989 from 4.0243 from 4.0183

15. Dollar Index - USD Weaker. 90.32 from 89.79 from 90.44
viewtopic.php?f=32&t=7616&start=60


Others

Sentiment - Complacent?

Headwinds (Global)
i) Derivatives (US$700t);
ii) Debts (US$237t, 318% GDP);
iii) Corporate Debt (US$50t);
iv) Institutional Investors (US$0.5t)
v) ETFs AUM (US$3.4t)
vi) Bitcoin (US$200b)

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

Yield on 10 Year US Treasuries - Higher. 2.96% from 2.84% from 2.82%
a. Low 1.32%; High 2.95%.

Yield on 2 Year Treasuries - Higher; 2.46% from 2.35% from 2.30%

Interest Rates:-
a. Expecting 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. Three rate hikes in 2018? Two in 2019?
viewtopic.php?f=16&t=7319&start=70

JNK (SPDR Barclays High Yield Bond ETF) - Lower; 35.99 from 36.14 from 35.82

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 85.89 from 86.24 from 85.46

Baltic Dry Index - Higher; 1281 from 993 from 953; Low 290; High 2330 (2013)


The above is to 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.

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

Postby winston » Sun Apr 29, 2018 9:15 am

TOL @ Apr 29. 2018

May.jpg


New Money From The New Month

It's a new month and new money would be flowing into the markets again. Therefore, we should have one spike in the markets next week. unless the Fund Managers have already spent the money in advance, during the rally on Thursday.

Thereafter, I'm not too sure that the US markets can continue to be strong after that.

In addition, Liquidity has been quite good over the past few weeks. The US Treasury has poured about US$133b into the system. This is money from the tax receipts, every April. Once we reached mid-May, the liquidity from the tax receipts may no longer be available.

Moreover, "Sell in May & Go Away" is here. Personally, I'll also be travelling and I would also not want to have any "risky" assets in my portfolio when I'm travelling.

On the horizon, we have to watch the Trade Sanctions on China as well as Iran. It would also be interesting to see how Russia would retaliate against the sanctions on it's oligarchs.

Finally, I have added to my position in Rusal (0486.HK). Oleg has agreed to cede control of the company and I'm expecting the counter to continue rising in the near future.

I think the RNAV of Rusal is around HK$6.50. And if we apply a 30% discount, it would be around HK$4.50 (the price before the sanctions). That's still a >100% increase from the closing price of HK$1.98 on Friday. So far, it has risen about 50% from the bottom of HK$1.31 about 1.5 weeks ago.


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: 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?;
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; 7 (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$68.02 from US$67.75 last week from US$67.33 two weeks ago; Support: US$58; Resistance: US$70
a. Rebalancing in 3Q 2018?
b. Stockpiles: 2.5b barrels;
c. US SPR: 679m barrels (33 days); To sell 190m over 8 years. Released 1m;
d. US imports 8m bpd (Total Demand of India and Japan combined)
e. US: Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells;
f. US: Active rigs doubled, Currently, 743 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;
k. China: SPR reached 51/90 days; 2018 Imports to decrease?
l. Libya: -400k bpd; Brazil +200k bpd; Canada +200k bpd; Nigeria +225k 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: -250k to -700k; Worst Case -2m bpd supply (50% cut by 2020)?
o. Trade War will reduce demand for Oil
p. How will sanctions on Iran affect Oil prices?
viewtopic.php?f=33&t=7550&start=210

2. Gold - Lower. US$1324 from US$1338 from US$1348. Record US$1920.
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: H 2017: -14%; 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$16.47 from US$17.11 from US$16.65
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$917 from US$929 from US$934
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$3132 from US$3241 from US$3110
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$3.05 from US$3.14 from US$3.06
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$2228 from US$2473
a. Sanctions on Rusal has removed 7% of world's supply

8. Uranium - Flat; US$20.85 from US$20.50 from US$21.00
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: 160m lbs pa to 225m lbs pa (2025)
e. Stockpile: 1b lbs (till 2022?) ; Companies normally store 5 years supply
f. Japanese Demand: 13 lbs pa; Starting 21/54 reactors? Currently, only 5
g. Number of Nuclear plants: +8 pa for next 20 yrs, 440 to 595; Current 456
h. 61 new reactors under construction; 149 planned; How many would be built ?
i. China: 35 existing plants; Building 21; 2017: 7 Ready: To build 177 more?
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more?
k. 25% long-term contracts expiring in 2017-18; 75% between 2017-2025;
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. Some buyers are locking in long term contracts 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. Nuclear: 20% electricity generated in U.S; 100 Plants; 25% drop by 2025
r. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons
s. 1b pounds has 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. New technology to mine Uranium from sea water? Cost and How Soon?
w. Glut at 15m pounds (23 reactors for 1 year)
x. Cameco, world's largest, mothballed mine for 10 mths; 10% world's supply
y. Kazatomprom, world's second largest, cut production by 20% for 3 years
z. Russia banning export of Uranium?

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


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

1. US Equities - Higher. 2670 from 2656 last week from 2604 two weeks ago.
a. Support 2560; 2400; Resistance: 2900
b. No Trade
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Lower. 30281 from 30418 from 30808
a. Support: 30,000; 26900; Resistance: 31600; 38,000; 43,000
b. Bought Bank of China (3988)
c. Bought Ping An (2918)
d. Bought China Mengniu (2918)
e. Added to Rusal (0486)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Higher. 3082 from 3072 from 3159
a. Support: 3210; 2950; 2450; Resistance 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210


4. Spore Equities - Higher; 3577 from 3573 from 3501
a. Bought HK Land
viewtopic.php?f=10&t=6828&start=b110


5. Japan Equities - Higher. 22468 from 22162 from 21779
a. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Lower; 1863 from 1888 from 1868
a. No Trade
viewtopic.php?f=10&t=6292&start=30


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

1. USD to JPY - JPY Weaker. 109.36 from 107.66 last week from 107.70 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 ?
e. Nikkei still down 7%
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Weaker 2.9529 from 2.9628 from 2.9533
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Weaker; 0.7556 from 0.7693 from 0.7797
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. 1.0021 from 1.0113 from 1.0226
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. 2.9594 from 2.9966 from 3.0198
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Weaker. 1.2087 from 1.2301 from 1.2323
viewtopic.php?f=32&t=5523&start=100Flat. EUR to MYR -

7. EUR to MYR - EUR Weaker; 4.7353 from 4.7913 from 4.7725
Flat. USD to HKD - HKD Stronger. 7.8186 from 7.8210 from 7.8178
a. 52 week range is 7.7452 - 7.8296.
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

9. USD to MYR:- MYR Weaker. 3.9177 from 3.9001 from 3.8731
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998);
c. Macquarie: 4.90 (Dec 31, 2017)
d. UOB: 4.35 (July 2017)
e. When is the right time to diversify from the MYR?
viewtopic.php?f=32&t=397&start=60

10. USD to SGD:- SGD Weaker; 1.3266 from 1.3147 from 1.3114
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

11. USD to CNY:- CNY Weaker; 6.3393 from 6.2921 from 6.2815
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

12. GBP to USD:- GBP Weaker. 1.3794 from 1.4064 from 1.4267
a. Brexit; Politics;
viewtopic.php?f=32&t=333&start=80

13. GBP to MYR:- GBP Weaker. 5.4040 from 5.4575 from 5.5264
a. Which is worst - Brexit or Malaysian Election?

14. CHF to MYR:- CHF Weaker; 3.9597 from 3.9989 from 4.0243

15. Dollar Index - USD Weaker. 91.81 from 90.32 from 89.79
viewtopic.php?f=32&t=7616&start=60


Others

Sentiment - Complacent?

Headwinds (Global)
i) Derivatives (US$700t);
ii) Debts (US$237t, 318% GDP);
iii) Corporate Debt (US$50t);
iv) Institutional Investors (US$0.5t)
v) ETFs AUM (US$3.4t)
vi) Bitcoin (US$200b)

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

Yield on 10 Year US Treasuries - Flat. 2.96% from 2.96% from 2.84%
a. Low 1.32%; High 2.95%.

Yield on 2 Year Treasuries - Higher; 2.48% from 2.46% from 2.35%

Interest Rates:-
a. Expecting 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. Three rate hikes in 2018? Two in 2019?
viewtopic.php?f=16&t=7319&start=70

JNK (SPDR Barclays High Yield Bond ETF) - Lower; 35.87 from 35.99 from 36.14

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 85.76 from 85.89 from 86.24

Baltic Dry Index - Higher; 1361 from 1281 from 993; Low 290; High 2330 (2013)


The above is to 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: 118528
Joined: Wed May 07, 2008 9:28 am

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

Postby winston » Sun May 06, 2018 8:42 am

TOL @ May 6. 2018

Sell In May.jpg


Sell In May And Go Away?

My friend is currently in New York and he mentioned that the daytime temperature there can reached 32 degrees. So very soon, people would be taking their summer holidays.

In view of the above, as well as the uncertainties from the following:-
1. Sanctions on Russia
2. Potential Trade War with China
3. Potential Sanctions on Iran
4. Potential escalation of the war in Ukraine
5. Potential escalation of the war in Syria,
why would anyone want to hold risky assets when they go on their summer vacation?

Having said that, the markets seems to be holding it's Support. Whenever there's a sharp correction, the money on the sidelines would come in to buy.

However, those same money on the sidelines, does not appeared to be too willing, to chase the market higher.

And any spike upwards is currently seen as a Selling Opportunity.

As for myself, I'm holding a higher percentage in Cash as I would also be going on my vacation soon.

However, if there's any sharp correction, I also need to remind myself to pick up some "good" counters as I think that this is still a "Trading Market".


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: 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?;
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; 7 (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$69.78 from US$68.02 last week from US$67.75 two weeks ago; Support: US$58; Resistance: US$70
a. Rebalancing in 3Q 2018?
b. Stockpiles: 2.5b barrels;
c. US SPR: 679m barrels (33 days); To sell 190m over 8 years. Released 1m;
d. US imports 8m bpd (Total Demand of India and Japan combined)
e. US: Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells;
f. US: Active rigs doubled, Currently, 743 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;
k. China: SPR reached 51/90 days; 2018 Imports to decrease?
l. Libya: -400k bpd; Brazil +200k bpd; Canada +200k bpd; Nigeria +225k 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: -250k to -700k; Worst Case -2m bpd supply (50% cut by 2020)?
o. Trade War will reduce demand for Oil
p. How will sanctions on Iran affect Oil prices?
viewtopic.php?f=33&t=7550&start=210

2. Gold - Lower. US$1316 from US$1324 from US$1338. Record US$1920.
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$16.55 from US$16.47 from US$17.11
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$912 from US$917 from US$929
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$3061 from US$3132 from US$3241
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$3.08 from US$3.05 from US$3.14
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$2346 from US$2228 from US$2473
a. Sanctions on Rusal has removed 7% of world's supply

8. Uranium - Flat; US$21.00 from US$20.85 from US$20.50
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: 160m lbs pa to 225m lbs pa (2025)
e. Stockpile: 1b lbs (till 2022?) ; Companies normally store 5 years supply
f. Japanese Demand: 13 lbs pa; Starting 21/54 reactors? Currently, only 5
g. Number of Nuclear plants: +8 pa for next 20 yrs, 440 to 595; Current 456
h. 61 new reactors under construction; 149 planned; How many would be built ?
i. China: 35 existing plants; Building 21; 2017: 7 Ready: To build 177 more?
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more?
k. 25% long-term contracts expiring in 2017-18; 75% between 2017-2025;
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. Some buyers are locking in long term contracts 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. Nuclear: 20% electricity generated in U.S; 100 Plants; 25% drop by 2025
r. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons
s. 1b pounds has 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. New technology to mine Uranium from sea water? Cost and How Soon?
w. Glut at 15m pounds (23 reactors for 1 year)
x. Cameco, world's largest, mothballed mine for 10 mths; 10% world's supply
y. Kazatomprom, world's second largest, cut production by 20% for 3 years
z. Russia banning export of Uranium?

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


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

1. US Equities - Lower. 2663 from 2670 last week from 2656 two weeks ago.
a. Support 2560; 2400; Resistance: 2900
b. No Trade
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Lower. 29927 from 30281 from 30418
a. Support: 29500; 28200; 27000; Resistance: 31600; 38,000; 43,000
b. Sold Bank of China (3988)
d. Sold China Mengniu (2918)
e. Traded Rusal (0486)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Higher. 3091 from 3082 from 3072
a. Support: 3210; 2950; 2450; Resistance 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Lower; 3545 from 3577 from 3573
a. Sold HK Land
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Higher. 22473 from 22468 from 22162
a. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Lower; 1842 from 1863 from 1888
a. Malaysian Election on Wednesday, May 9, 2018
b. No Trade
viewtopic.php?f=10&t=6292&start=30


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

1. USD to JPY - JPY Weaker. 109.11 from 109.36 last week from 107.66 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 ?
e. Nikkei still down 7%
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Weaker 2.9561 from 2.9529 from 2.9628
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Weaker; 0.7539 from 0.7556 from 0.7693
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. 1.0052 from 1.0021 from 1.0113
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. 2.9715 from 2.9594 from 2.9966
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Weaker. 1.1965 from 1.2087 from 1.2301
viewtopic.php?f=32&t=5523&start=100Flat. EUR to MYR -

7. EUR to MYR - EUR Weaker; 4.7159 from 4.7353 from 4.7913
Flat. USD to HKD - HKD Stronger. 7.8186 from 7.8210 from 7.8178
a. 52 week range is 7.7452 - 7.8296.
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

9. USD to MYR:- MYR Weaker. 3.9415 from 3.9177 from 3.9001
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998);
c. Macquarie: 4.90 (Dec 31, 2017)
d. UOB: 4.35 (July 2017)
e. When is the right time to diversify from the MYR?
viewtopic.php?f=32&t=397&start=60

10. USD to SGD:- SGD Weaker; 1.3334 from 1.3266 from 1.3147
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

11. USD to CNY:- CNY Weaker; 6.3586 from 6.3393 from 6.2921
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

12. GBP to USD:- GBP Weaker. 1.3526 from 1.3794 from 1.4064
a. Brexit; Politics;
viewtopic.php?f=32&t=333&start=80

13. GBP to MYR:- GBP Weaker. 5.3315 from 5.4040 from 5.4575
a. Which is worst - Brexit or Malaysian Election?

14. CHF to MYR:- CHF Weaker; 3.9413 from 3.9597 from 3.9989

15. Dollar Index - USD Weaker. 92.57 from 91.81 from 90.32
viewtopic.php?f=32&t=7616&start=60


Others

Sentiment - Complacent?

Headwinds (Global)
i) Derivatives (US$700t);
ii) Debts (US$237t, 318% GDP);
iii) Corporate Debt (US$50t);
iv) Institutional Investors (US$0.5t)
v) ETFs AUM (US$3.4t)
vi) Bitcoin (US$200b)

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

Yield on 10 Year US Treasuries - Flat. 2.95% from 2.96% from 2.96%
a. Low 1.32%; High 2.95%.

Yield on 2 Year Treasuries - Higher; 2.50% from 2.48% from 2.46%

Interest Rates:-
a. Expecting 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. Three rate hikes in 2018? Two in 2019?
viewtopic.php?f=16&t=7319&start=70

JNK (SPDR Barclays High Yield Bond ETF) - Lower; 35.71 from 35.87 from 35.99

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 85.42 from 85.76 from 85.89

Baltic Dry Index - Higher; 1376 from 1361 from 1281; Low 290; High 2330 (2013)


The above is to 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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User avatar
winston
Billionaire Boss
 
Posts: 118528
Joined: Wed May 07, 2008 9:28 am

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

Postby winston » Sun May 13, 2018 9:49 pm

TOL @ May 13, 2018

cautiously-optimistic.jpg


Cautiously Optimistic?

The markets rose for the week and many people are wondering whether it can move higher.

Intuitively, I think that it may go sideways with a slight upward bias, despite the various issues eg. Iran, Syria, US-China Trade War, Russian Sanctions, North Korea etc.

Therefore, I still think that any steep corrections should bought, while any strong rally should also be sold.

In addition, "Sell In May & Go Away" is here until probably August or so.


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: 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?;
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; 7 (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$70.56 from US$69.78 last week from US$68.02 two weeks ago; Support: US$58; Resistance: US$70
a. Rebalancing in 3Q 2018?
b. Stockpiles: 2.5b barrels;
c. US SPR: 679m barrels (33 days); To sell 190m over 8 years. Released 1m;
d. US imports 8m bpd (Total Demand of India and Japan combined)
e. US: Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells;
f. US: Active rigs doubled, Currently, 743 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;
k. China: SPR reached 51/90 days; 2018 Imports to decrease?
l. Libya: -400k bpd; Brazil +200k bpd; Canada +200k bpd; Nigeria +225k 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: -250k to -700k; Worst Case -2m bpd supply (50% cut by 2020)?
o. Trade War will reduce demand for Oil
p. How will sanctions on Iran affect Oil prices?
viewtopic.php?f=33&t=7550&start=210

2. Gold - Higher. US$1319 from US$1316 from US$1324. Record US$1920.
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$16.70 from US$16.55 from US$16.47
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$925 from US$912 from US$917
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$3088 from US$3061 from US$3132
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$3.11 from US$3.08 from US$3.05
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$2273 from US$2346 from US$2228
a. Sanctions on Rusal has removed 7% of world's supply

8. Uranium - Higher; US$21.75 from US$21.00 from US$20.85
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: 160m lbs pa to 225m lbs pa (2025)
e. Stockpile: 1b lbs (till 2022?) ; Companies normally store 5 years supply
f. Japanese Demand: 13 lbs pa; Starting 21/54 reactors? Currently, only 5
g. Number of Nuclear plants: +8 pa for next 20 yrs, 440 to 595; Current 456
h. 61 new reactors under construction; 149 planned; How many would be built ?
i. China: 35 existing plants; Building 21; 2017: 7 Ready: To build 177 more?
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more?
k. 25% long-term contracts expiring in 2017-18; 75% between 2017-2025;
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. Some buyers are locking in long term contracts 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. Nuclear: 20% electricity generated in U.S; 100 Plants; 25% drop by 2025
r. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons
s. 1b pounds has 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. New technology to mine Uranium from sea water? Cost and How Soon?
w. Glut at 15m pounds (23 reactors for 1 year)
x. Cameco, world's largest, mothballed mine for 10 mths; 10% world's supply
y. Kazatomprom, world's second largest, cut production by 20% for 3 years
z. Russia banning export of Uranium?

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


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

1. US Equities - Higher. 2728 from 2663 last week from 2670 two weeks ago.
a. Support 2560; 2400; Resistance: 2900; Forward PE 16
b. Bought SINA
c. Bought EWM (Malaysian ETF
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Higher. 31122 from 29927 from 30281
a. Support: 29500; 28200; 27000; Resistance: 31600; 38,000; 43,000
b. Added Rusal (0486)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Higher. 3163 from 3091 from 3082
a. Support: 3210; 2950; 2450; Resistance 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Higher; 3570 from 3545 from 3577
a. Bought HK Land
b. Bought Wheelock
c. Sold Jardine Strategic
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Higher. 22758 from 22473 from 22468
a. Forward PE 13
b. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Higher; 1847 from 1842 from 1863
a. Bought EWM (Malaysia ETF) listed in US
viewtopic.php?f=10&t=6292&start=30


Currencies- Mixed (Data from XE.com)

1. USD to JPY - JPY Weaker. 109.41 from 109.11 last week from 109.36 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 ?
e. Nikkei still down 7%
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Flat 2.9564 from 2.9561 from 2.9529
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.7544 from 0.7539 from 0.7556
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. 1.0080 from 1.0052 from 1.0021
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. 2.9801 from 2.9715 from 2.9594
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Weaker. 1.1945 rom 1.1965 from 1.2087
viewtopic.php?f=32&t=5523&start=100Flat. EUR to MYR -

7. EUR to MYR - EUR Stronger; 4.7188 from 4.7159 from 4.7353
Flat. USD to HKD - HKD Stronger. 7.8186 from 7.8210 from 7.8178
a. 52 week range is 7.7452 - 7.8296.
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

9. USD to MYR:- MYR Weaker. 3.9505 from 3.9415 from 3.9177
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998);
c. Macquarie: 4.90 (Dec 31, 2017)
d. UOB: 4.35 (July 2017)
e. When is the right time to diversify from the MYR?
viewtopic.php?f=32&t=397&start=60

10. USD to SGD:- SGD Weaker; 1.3362 from 1.3334 from 1.3266
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

11. USD to CNY:- CNY Stronger; 6.3345 from 6.3586 from 6.3393
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

12. GBP to USD:- GBP Stronger. 1.3542 from 1.3526 from 1.3794
a. Brexit; Politics;
viewtopic.php?f=32&t=333&start=80

13. GBP to MYR:- GBP Stronger. 5.3498 from 5.3315 from 5.4040
a. Which is worst - Brexit or Malaysian Election?

14. CHF to MYR:- CHF Stronger; 3.9500 from 3.9413 from 3.9597

15. Dollar Index - USD Flat. 92.54 from 92.57 from 91.81
viewtopic.php?f=32&t=7616&start=60


Others

Sentiment - Complacent?

Headwinds (Global)
i) Derivatives (US$700t);
ii) Debts (US$237t, 318% GDP);
iii) Corporate Debt (US$50t);
iv) Institutional Investors (US$0.5t)
v) ETFs AUM (US$3.4t)
vi) Bitcoin (US$200b)
vii) US Pension Short-Fall: US$385b

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

Yield on 10 Year US Treasuries - Higher. 2.97% from 2.95% from 2.96%
a. Low 1.32%; High 2.95%.

Yield on 2 Year Treasuries - Higher; 2.53% from 2.50% from 2.48%

Interest Rates:-
a. Expecting 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. Three rate hikes in 2018? Two in 2019?
viewtopic.php?f=16&t=7319&start=70

JNK (SPDR Barclays High Yield Bond ETF) - Higher; 35.81 from 35.71 from 35.87

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 85.73 from 85.42 from 85.76

Baltic Dry Index - Higher; 1472 from 1376 from 1361; Low 290; High 2330 (2013)


The above is to 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.

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

Postby winston » Sun May 20, 2018 8:49 am

TOL @ May 20. 2018

sluggish.jpg


Sluggish Markets?

The markets have been sluggish over the past week and it does not help that we also have the following:-
1. Potential US-China Trade War
2. Potential Cancellation of US-North Korea Summit
3. Trump blaming Xi for the cancellation of the US-North Korea Summit
4. No progress on NAFTA discussions
5. Ongoing sanctions on the Russians
6. Moving of the US Embassy to Jerusalem
7. Ongoing fighting in Syria
8. US$29b of US bonds maturing on May 31

In view of the above, I think that maybe we will need to be a bit more careful until early June, where there would be new money flowing into the market from the new month, as well as some Window Dressing activities.

In addition, there may be a need to require a greater margin of safety now before taking a position.

I need to also remind myself to check my Position Size and tighthen my Trailing Stop Loss.

Going forward, I need to ensure that all my positions now are "bullet-proof" and can withstand a recession or bear-market that may last two years.


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: 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?;
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; 7 (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 - Higher. US$71.36 from US$70.56 last week from US$69.78 two weeks ago; Support: US$58; Resistance: 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. Released 1m;
d. US imports 8m bpd (Total Demand of India and Japan combined)
e. US: Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells;
f. US: Active rigs currently at 1050 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;
k. China: SPR reached 51/90 days; 2018 Imports to decrease?
l. Libya: -400k bpd; Brazil +200k bpd; Canada +200k bpd; Nigeria +225k 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: -250k to -700k; Worst Case -2m bpd supply (50% cut by 2020)?
o. Trade War will reduce demand for Oil
p. How will sanctions on Iran affect Oil prices?
viewtopic.php?f=33&t=7550&start=210

2. Gold - Lower. US$1292 from US$1319 from US$1316. Record US$1920.
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
o. Resistance: 1350
viewtopic.php?f=33&t=7589&p=202084#p202084

3. Silver - Lower. US$16.47 from US$16.70 from US$16.55
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$887 from US$925 from US$912
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$3094 from US$3088 from US$3061
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$3.06 from US$3.11 from US$3.08
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$2272 from US$2273 from US$2346
a. Sanctions on Rusal has removed 7% of world's supply

8. Uranium - Flat; US$21.70 from US$21.75 from US$21.00
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: 160m lbs pa to 225m lbs pa (2025)
e. Stockpile: 1b lbs (till 2022?) ; Companies normally store 5 years supply
f. Japanese Demand: 13 lbs pa; Starting 21/54 reactors? Currently, only 5
g. Number of Nuclear plants: +8 pa for next 20 yrs, 440 to 595; Current 456
h. 61 new reactors under construction; 149 planned; How many would be built ?
i. China: 35 existing plants; Building 21; 2017: 7 Ready: To build 177 more?
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more?
k. 25% long-term contracts expiring in 2017-18; 75% between 2017-2025;
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. Some buyers are locking in long term contracts 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. Nuclear: 20% electricity generated in U.S; 100 Plants; 25% drop by 2025
r. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons
s. 1b pounds has 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. New technology to mine Uranium from sea water? Cost and How Soon?
w. Glut at 15m pounds (23 reactors for 1 year)
x. Cameco, world's largest, mothballed mine for 10 mths; 10% world's supply
y. Kazatomprom, world's second largest, cut production by 20% for 3 years
z. Russia banning export of Uranium?

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


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

1. US Equities - Lower. 2713 from 2728 last week from 2663 two weeks ago.
a. Support 2560; 2400; Resistance: 2900; Forward PE 16
b. Bought Baidu (BIDU)
c. Sold EWM (Malaysian ETF)
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Lower. 31048 from 31122 from 29927
a. Support: 29500; 28200; 27000; Resistance: 31600; 38,000; 43,000
b. Added to Rusal (0486)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Higher. 3193 from 3163 from 3091
a. Support: 2950; 2450; Resistance 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Lower; 3529 from 3570 from 3545; Resistance 3850
a. Added to HK Land
b. Added to HPL
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Higher. 22930 from 22758 from 22473
a. Forward PE 13
b. Resistance 24,000
c. No Trade

viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Higher; 1855 from 1847 from 1842
a. Sold EWM (Malaysia ETF) listed in US
b. Sold Gamuda Warrants
viewtopic.php?f=10&t=6292&start=30


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

1. USD to JPY - JPY Weaker. 110.94 from 109.41 last week from 109.11 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 ?
e. Nikkei still down 7%
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Flat 2.9565 from 2.9564 from 2.9561
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Weaker; 0.7517 from 0.7544 from 0.7539
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. 1.0101 from 1.0080 from 1.0052
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. 2.9867 from 2.9801 from 2.9715
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Weaker. 1.1780 from 1.1945 rom 1.1965
viewtopic.php?f=32&t=5523&start=100Flat. EUR to MYR -

7. EUR to MYR - EUR Weaker; 4.6798 from 4.7188 from 4.7159

8. USD to HKD - HKD Weaker. 7.8501 from 7.8186 from 7.8210
a. 52 week range is 7.7452 - 7.8296.
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

9. USD to MYR:- MYR Weaker. 3.9725 from 3.9505 from 3.9415
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998);
c. Macquarie: 4.90 (Dec 31, 2017)
d. UOB: 4.35 (July 2017)
e. When is the right time to diversify from the MYR?
viewtopic.php?f=32&t=397&start=60

10. USD to SGD:- SGD Weaker; 1.3438 from 1.3362 from 1.3334
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

11. USD to CNY:- CNY Weaker; 6.3787 from 6.3345 from 6.3586
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

12. GBP to USD:- GBP Weaker. 1.3490 from 1.3542 from 1.3526
a. Brexit; Politics;
viewtopic.php?f=32&t=333&start=80

13. GBP to MYR:- GBP Stronger. 5.3589 from 5.3498 from 5.3315
a. Which is worst - Brexit or Malaysian Election?

14. CHF to MYR:- CHF Stronger; 3.9753 from 3.9500 from 3.9413

15. Dollar Index - USD Stronger. 93.55 from 92.54 from 92.57
viewtopic.php?f=32&t=7616&start=60


Others

Sentiment - Confused?

Headwinds (Global)
i) Derivatives (US$700t);
ii) Debts (US$237t, 318% GDP);
iii) Corporate Debt (US$50t);
iv) Institutional Investors (US$0.5t)
v) ETFs AUM (US$3.4t)
vi) Bitcoin (US$200b)
vii) US Pension Short-Fall: US$385b

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

Yield on 10 Year US Treasuries - Higher. 3.06% from 2.97% from 2.95%
a. Low 1.32%; High 3.12%
b. Resistance 3.3%

Yield on 2 Year Treasuries - Higher; 2.55% from 2.53% from 2.50%

Interest Rates:-
a. Expecting 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. Three rate hikes in 2018? Two in 2019?
viewtopic.php?f=16&t=7319&start=70

JNK (SPDR Barclays High Yield Bond ETF) - Lower; 35.65 from 35.81 from 35.71

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 85.40 from 85.73 from 85.42

Baltic Dry Index - Lower; 1273 from 1472 from 1376; Low 290; High 2330 (2013)


The above is to 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 May 27, 2018 5:01 pm

TOL @ May 27. 2018

Summer Doldrums?

The markets were again not going anywhere this week.

Maybe it's because of the nice weather and that the traders are starting to take their summer holidays.

Or maybe it's because of the chaotic WH eg. Iran, Syria, North Korea, Russian Sanctions, NAFTA, China Sanctions etc. who dont seemed to know what they are doing.

Anywhere, we will be having USD29b of bonds maturing on May 31st and that's not a pretty sight.

And if we can get through that unscathed, then we will have the new money from the new month, flowing into the market in early June.

Thereafter, we will have the 1H Window Dressing activities but probably after the FOMC Metting on June 12 and 13.


Commodities: Risk-Off (Data from Commodities Live)

1. WTI Oil - Lower. US$67.58 from US$71.36 last week from US$70.56 two weeks ago; Support: US$58; Resistance: 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. Released 1m;
d. US imports 8m bpd (Total Demand of India and Japan combined)
e. US: Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells;
f. US: Active rigs currently at 1050 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;
k. China: SPR reached 51/90 days; 2018 Imports to decrease?
l. Libya: -400k bpd; Brazil +200k bpd; Canada +200k bpd; Nigeria +225k 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: -250k to -700k; Worst Case -2m bpd supply (50% cut by 2020)?
o. Trade War will reduce demand for Oil
p. How will sanctions on Iran affect Oil prices?
viewtopic.php?f=33&t=7550&start=210

2. Gold - Higher. US$1301 from US$1292 from US$1319. Record US$1920.
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
o. Resistance: 1350
viewtopic.php?f=33&t=7589&p=202084#p202084

3. Silver - Higher. US$16.52 from US$16.47 from US$16.70
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$900 from US$887 from US$925
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$3058 from US$3094 from US$3088
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$3.08 from US$3.06 from US$3.11
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$2261 from US$2272 from US$2273
a. Sanctions on Rusal has removed 7% of world's supply

8. Uranium - Higher; US$22.65 from US$21.70 from US$21.75
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: 160m lbs pa to 225m lbs pa (2025)
e. Stockpile: 1b lbs (till 2022?) ; Companies normally store 5 years supply
f. Japanese Demand: 13 lbs pa; Starting 21/54 reactors? Currently, only 5
g. Number of Nuclear plants: +8 pa for next 20 yrs, 440 to 595; Current 456
h. 61 new reactors under construction; 149 planned; How many would be built ?
i. China: 35 existing plants; Building 21; 2017: 7 Ready: To build 177 more?
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more?
k. 25% long-term contracts expiring in 2017-18; 75% between 2017-2025;
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. Some buyers are locking in long term contracts 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. Nuclear: 20% electricity generated in U.S; 100 Plants; 25% drop by 2025
r. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons
s. 1b pounds has 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. New technology to mine Uranium from sea water? Cost and How Soon?
w. Glut at 15m pounds (23 reactors for 1 year)
x. Cameco, world's largest, mothballed mine for 10 mths; 10% world's supply
y. Kazatomprom, world's second largest, cut production by 20% for 3 years
z. Russia banning export of Uranium?

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

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

1. US Equities - Higher. 2721 from 2713 last week from 2728 two weeks ago.
a. Support 2560; 2400; Resistance: 2900; Forward PE 16
b. No Trade
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Lower. 30588 from 31048 from 31122
a. Support: 29500; 28200; 27000; Resistance: 31600; 38,000; 43,000
b. Traded Rusal (0486)
c. Bought A50 ETF (2822)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Lower. 3141 from 3193 from 3163
a. Support: 2950; 2450; Resistance 3300; 3600
b. Bought A50 ETF (2822) listed in HK
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Lower; 3513 from 3529 from 3570; Resistance 3850
a. Added to HK Land
b. Added to HPL
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Lower. 22451 from 22930 from 22758
a. Forward PE 13
b. Resistance 24,000
c. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Lower; 1797 from 1855 from 1847
a. No Trade
viewtopic.php?f=10&t=6292&start=30


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

1. USD to JPY - JPY Stronger. 109.43 from 110.94 last week from 109.41 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 2.9696 from 2.9565 from 2.9564
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.7567 from 0.7517 from 0.7544
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. 1.0142 from 1.0101 from 1.0080
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. 3.0119 from 2.9867 from 2.9801
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Flat. 1.1674 from 1.1677 from 1.1780
viewtopic.php?f=32&t=5523&start=100

7. EUR to MYR - EUR Weaker; 4.6471 from 4.6798 from 4.7188

8. USD to HKD - HKD Stronger. 7.8448 from 7.8501 from 7.8186
a. 52 week range is 7.7452 - 7.8296.
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

9. USD to MYR:- MYR Weaker. 3.9805 from 3.9725 from 3.9505
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998);
c. Macquarie: 4.90 (Dec 31, 2017)
d. UOB: 4.35 (July 2017)
e. When is the right time to diversify from the MYR?
viewtopic.php?f=32&t=397&start=60

10. USD to SGD:- SGD Stronger; 1.3403 from 1.3438 from 1.3362
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

11. USD to CNY:- CNY Weaker; 6.3899 from 6.3787 from 6.3345
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

12. GBP to USD:- GBP Weaker. 1.3346 from 1.3490 from 1.3542
a. Brexit; Politics;
viewtopic.php?f=32&t=333&start=80

13. GBP to MYR:- GBP Weaker. 5.3130 from 5.3589 from 5.3498
a. Which is worst - Brexit or Malaysian Election?

14. CHF to MYR:- CHF Stronger; 4.0117 from 3.9753 from 3.9500

15. Dollar Index - USD Stronger. 94.07 from 93.55 from 92.54
viewtopic.php?f=32&t=7616&start=60

Yield on 10 Year US Treasuries - Lower. 2.93% from 3.06% from 2.97%
a. Low 1.32%; High 3.12%
b. Resistance 3.3%

Yield on 2 Year Treasuries - Lower; 2.48% from 2.55% from 2.53%

Interest Rates:-
a. Expecting 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. Three rate hikes in 2018? Two in 2019?
viewtopic.php?f=16&t=7319&start=70

JNK (SPDR Barclays High Yield Bond ETF) - Higher; 35.70 from 35.65 from 35.81

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 85.56 from 85.40 from 85.73

Baltic Dry Index - Lower; 1109 from 1273 from 1472; Low 290; High 2330 (2013)


The above is to 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: 118528
Joined: Wed May 07, 2008 9:28 am

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

Postby winston » Sun Jun 10, 2018 11:05 am

TOL @ June 10, 2018

summer-break.jpg


Summer Trading Break

I was away for the past 2 weeks and am trying to catch up with my reading.

I think "Window-Dressing" activities will be kicking in soon, over the next two weeks.

In the past, I would watch the "G7 Meetings" as the Banksters would be coordinating their activities there. Not sure that they are that coordinated anymore with Trump around.

Wrt to the "Trump-Kim" Summit in Singapore on June 12, it would probably be a non-event. unless they start bashing each other.

As for the FOMC meeting on June 12-13, everyone is expecting a 25 bps increase in interest rates.

Wrt to the "US-China Trade War", it's very likely that the US would accept the US$75b in new purchases for the time being. The US knows that this is probably the most that they can get at this point in time, with the hope that they can pressure China to buy more in the future.

As for Italy, I think that they have managed to control the situation for the time being. I was just in Italy and the situation there does not look too good. Luckily, they still have their Fashion and Tourism industries to keep them going.

Therefore, I still think that this is a Trading Market and it's still safe to buy on any severe dips and sell into the technical rebounds. However, I will not be chasing any rallies anymore.


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: 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?;
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; 7 (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 - Lower. US$65.71 from US$67.58 two weeks agp from US$71.36 three weeks ago; Support: US$58; Resistance: 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. Released 1m;
d. US imports 8m bpd (Total Demand of India and Japan combined)
e. US: Capex: US$1t; 4100 "Drilled but Uncompleted" (DUC) Wells;
f. US: Active rigs currently at 1050 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;
k. China: SPR reached 51/90 days; 2018 Imports to decrease?
l. Libya: -400k bpd; Brazil +200k bpd; Canada +200k bpd; Nigeria +225k 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: -250k to -700k; Worst Case -2m bpd supply (50% cut by 2020)?
o. Trade War will reduce demand for Oil
p. How will sanctions on Iran affect Oil prices?
viewtopic.php?f=33&t=7550&start=210

2. Gold - Higher. US$1303 from US$1301 from US$1292. Support: 1280; 1260; $1050; Resistance: 1390; 1700; 920.
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
o. Resistance: 1350
viewtopic.php?f=33&t=7589&p=202084#p202084

3. Silver - Higher. US$16.80 from US$16.52 from US$16.47
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$908 from US$900 from US$887
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$3178 from US$3058 from US$3094
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$3.30 from US$3.08 from US$3.06
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$2301 from US$2261 from US$2272
a. Sanctions on Rusal has removed 7% of world's supply

8. Uranium - Higher; US$23.35 from US$22.65 from US$21.70
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: 160m lbs pa to 225m lbs pa (2025)
e. Stockpile: 1b lbs (till 2022?) ; Companies normally store 5 years supply
f. Japanese Demand: 13 lbs pa; Starting 21/54 reactors? Currently, only 5
g. Number of Nuclear plants: +8 pa for next 20 yrs, 440 to 595; Current 456
h. 55 new reactors under construction; 149 planned; How many would be built ?
i. China: 35 existing plants; Building 21; 2017: 7 Ready: To build 177 more?
j. India: 22 existing nuclear plants; Currently building 5; To build 64 more?
k. 25% long-term contracts expiring in 2017-18; 75% between 2017-2025;
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. Some buyers are locking in long term contracts 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. Nuclear: 20% electricity generated in U.S; 100 Plants; 25% drop by 2025
r. Supply: 50k tonnes; Demand: 68k tonnes; 2k tonnes enriched for weapons
s. 1b pounds has 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. New technology to mine Uranium from sea water? Cost and How Soon?
w. Glut at 15m pounds (23 reactors for 1 year)
x. Cameco, world's largest, mothballed mine for 10 mths; 10% world's supply
y. Kazatomprom, world's second largest, cut production by 20% for 3 years
z. Russia banning export of Uranium?

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


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

1. US Equities - Higher. 2776 from 2721 two weeks ago from 2713 three weeks ago.
a. Support 2740; 2560; Resistance: 2785; 2825;0; Fwd PE 16
b. Sold Baidu (BIDU)
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Higher. 30958 from 30588 from 31048
a. Support: 29500; 28200; 27000; Resistance: 31600; 38,000; 43,000
b. No Trade
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Lower. 3067 from 3141 from 3193
a. Support: 2950; 2450; Resistance 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Lower; 3426 from 3513 from 3529; Resistance 3850
a. No Trade
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Higher. 22695 from 22451 from 22930
a. Forward PE 13
b. Resistance 24,000
c. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Lower; 1778 from 1797 from 1855
a. No Trade
viewtopic.php?f=10&t=6292&start=30



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

1. USD to JPY - JPY Stronger. 109.55 from 109.43 two weeks from 110.94 three 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 2.9696 from 2.9565 from 2.9564
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.7603 from 0.7567 from 0.7517
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. 1.0152 from 1.0142 from 1.0101
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. 3.0324 from 3.0119 from 2.9867
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Stronger. 1.1779 from 1.1674 from 1.1677
viewtopic.php?f=32&t=5523&start=100

7. EUR to MYR - EUR Stronger; 4.6961 from 4.6471 from 4.6798

8. USD to HKD - HKD Weaker. 7.8469 from 7.8448 from 7.8501
a. 52 week range is 7.7452 - 7.8296.
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

9. USD to MYR:- MYR Weaker. 3.9886 from 3.9805 from 3.9725
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998);
c. Macquarie: 4.90 (Dec 31, 2017)
d. UOB: 4.35 (July 2017)
e. When is the right time to diversify from the MYR?
viewtopic.php?f=32&t=397&start=60

10. USD to SGD:- SGD Stronger; 1.3353 from 1.3403 from 1.3438
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

11. USD to CNY:- CNY Weaker; 6.4019 from 6.3899 from 6.3787
a. When is the right time to buy some CNY? How?
viewtopic.php?f=32&t=7720&start=90

12. GBP to USD:- GBP Stronger. 1.3394 from 1.3346 from 1.3490
a. Brexit; Politics;
viewtopic.php?f=32&t=333&start=80

13. GBP to MYR:- GBP Stronger. 5.3406 from 5.3130 from 5.3589
a. Which is worst - Brexit or Malaysian Election?

14. Dollar Index - USD Weaker. 93.54 from 94.07 from 93.55
viewtopic.php?f=32&t=7616&start=60


Others

Sentiment - Complacent?

Headwinds (Global)
i) Derivatives (US$700t);
ii) Debts (US$237t, 318% GDP);
iii) Corporate Debt (US$50t);
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

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

Yield on 10 Year US Treasuries - Higher. 2.95% from 2.93% two weeks from 3.06% three weeks ago
a. Low 1.32%; High 3.12%
b. Resistance 3.3%

Yield on 2 Year Treasuries - Higher; 2.50% from 2.48% from 2.55%
Interest Rates:-
a. Expecting 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. Three rate hikes in 2018? Two in 2019?
viewtopic.php?f=16&t=7319&start=70

JNK (SPDR Barclays High Yield Bond ETF) - Higher; 35.75 from 35.70 from 35.65

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 85.66 from 85.56 from 85.40

Baltic Dry Index - Higher; 1395 from 1109 from 1273; Low 290; High 2330 (2013)


The above is to 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
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It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Posts: 118528
Joined: Wed May 07, 2008 9:28 am

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