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Bullish on Gold Priced in Euro Gold Priced in Dollars, Not So Much
by Ade Odunsi of AdvisorShares,
In this weeks discussion we revisit our earlier analysis looking at the relationship between the gold price and real interest rates. Over the last three months the gold price in dollar terms has fallen 9% moving briefly below $1,200 and naturally raising concerns amongst investors that this pull-back may extend as the dollar continues to strengthen against a broad basket of currencies.
How Alibaba Could Capitalize on the EBay-PayPal Split
Ebay and Paypal Split - U.S. Global InvestorsInternet auctioneer and retailer eBay announced last week that it will be spinning off its online payment service PayPal into two listed companies. This decision, heralded by activist shareholder Carl Icahn, among other investors, will allegedly enable both companies to focus exclusively on what they do best.
Rethinking Core Fixed Income in a Rising-Rate Environment
Michael Hasenstab, chief investment officer, Global Bonds, Franklin Templeton Fixed Income Group, says it is time for fixed income investors to think outside traditional boxes. He believes that with todays market environment and the prospect of rising US interest rates on the horizon, investors need to rethink their core fixed income portfolio. He makes the case for an actively managed, global, unconstrained fixed income strategy.
Tocqueville Gold Strategy Investor Letter
John Hathaway, manager of the Tocqueville Gold Fund (TGLDX), states in his latest quarterly letter on gold that "On a near term basis, this looks and feels like a bottom to us. On a longer term view, we are more bullish than ever." He goes on to write that "Expanding earnings and valuations, the underpinnings of the four year bull market in financial assets, may be approaching an inflection point. A reversal of this cycle would in our opinion restore interest in gold."
High Yield Market Technicals
by Tim Gramatovich of AdvisorShares,
It has been a long quiet period in credit but volatility has returned with a vengeance. I have had an opportunity to discuss this with a number of our institutional clients in recent days, but there are a few factors that are exacerbating the recent price declines in the high yield bond market.
Letter to a Chinese "Little Emperor": It’s Nice To Be the King, but Not Always Easy
In his latest piece, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, imagines writing to a privileged child of the "new" China, comparing such a child's coming-of-age with his own, in booming post-World War 2 France. He goes on to discuss "the curse of early money," and the pitfall it can cause for friendships and for personal development.
Emerging from the Global Competitiveness Ranks
The World Economic Forum (WEF) recently released its annual Global Competitiveness Report, which details the strengths and weakness of 144 countries in myriad factors including education, infrastructure, health and technology. There arent many huge surprises in the developed markets, as most countries overall rankings were fairly stable from the prior year. There were, however, a few interesting shifts in the ranks among emerging markets: some making leaps forward, and others, regressing.
Weighing the Week Ahead: Will global weakness drag down the US economy?
Last week was all about data. This week will be the opposite. The calendar already dished up the big news, and the major earnings reports are still a week away. Meanwhile, we have more conferences and speeches than I can remember seeing for many months. For those of us who think of data as the signal and politicians and pundits as noise, we must get ready for a low ratio! This week will emphasize commentary rather than data, with world leaders, Fed types, and pundits all joining in.
Much Ado About 0.60%
Since 1962, the Dow has had a daily change of at least 0.60% over 45% of the time! (Ycharts.com 2014) There are 251 U.S. market trading days a year. This means that on average, about 113 trading days a year result in the Dow changing by 100 points or more, in current terms. Enough said. So, let's focus on what is really news. When market volatility truly returns, it will be like U.S. Justice Potter Stewart famously said about pornography (paraphrasing): you'll know it when you see it.
Gold update
by Adam Feik of Take Time For This,
I dont believe rising interest rates are or will be a reason for the dollar to continue to rally (or for gold prices to fall). Right now, investors seem convinced the dollars rally will continue for the foreseeable future. It may; but more likely, the dollar will continue to fluctuate when compared to foreign currencies, as well as when compared to gold. I, for one, will probably view any large declines in gold, silver, oil, gas, and the companies that produce those commodities as an opportunity to buy low. Note, Im not ready to
Uncertainty in markets, economy puts focus on stock picking
The U.S. Federal Reserve (Fed) has indicated it will stop buying U.S. Treasury bonds and mortgage-backed securities the taper of its QE3 program by the end of October. The Fed also has said it will keep interest rates at a very low level for a considerable time.
Six Months of Nothing
Political problems have escalated over the past seven months. Russia has been aggressive and so have extremists in certain Muslim countries. Having said that, financial markets seem to care about nothing but QE. Despite a growing disconnect in some markets between equity valuations and economic fundamentals, we expect the low interest rate environment to carry the equity bull market for a little longer, but eventually it will end in tears.
5 Reasons Why Short-Term Municipal Bonds Make Sense Now
Although short-term bonds might not be as sexy as common stocks in fashionable brands like Apple and Tesla, they play an important role in any serious investor's portfolio. Below are five reasons why investing in municipal bonds makes sense now more than ever.
Gold and US Monetary Policy
by Ade Odunsi of AdvisorShares,
In this weeks Gold Report we conduct a historical analysis of the impact of US monetary policy announcements on the price of gold in US dollars. Beginning with the Federal Reserves extra-ordinary 75 basis point Fed Funds rate cut in January 2008 and the most significant central bank policy announcements since, the analysis looks at the resulting reaction of the gold market and the US 10 year real yield over a three month period.
Open Sesame
by Brian Andrew of Cleary Gull,
Often times, investors are interested in pursuing investments in the hottest asset class. The hype surrounding the Alibaba IPO is an example of how a sector gets a boost from a hot new stock. The fact that the stock traded up almost 40% in the first day of trading is an indication that the sector is hot. It is difficult not to want to add more capital to that portion of your portfolio that is performing best while ignoring the portion that isnt performing as well. Of course that is exactly what you are supposed to do and what rebalancing is all about.
Evaluating Break-Even Levels when Interest Rates Rise
by Yung Lim of AdvisorShares,
In the current low interest rate environment across the Treasury curve and investment grade credit space, low coupon rates provide less protection against market value loss resulting from rising interest rates. When interest rates were higher, fixed income investors enjoyed the benefit of earning higher recurring income to offset any market value declines.
Wheres the Growth?
by John Mauldin of Mauldin Economics,
Call me a heretic, but I take a different view than the economists in charge. To my mind, the sluggish recovery is a sign that central banks, governments, and, quite frankly, the textbook economists (despite their best intentions) are part of the problem. As Detlev Schlichter commented in his latest blog post (Keynes was a failure in Japan No need to embrace him in Europe), To the true Keynesian, no interest rate is ever low enough, no quantitative easing program ever ambitious enough, and no fiscal deficit ever large enough. It&r
Banking on the Growing Strength of the Financial System
by Dave Ellison of Hennessy Funds,
Thiscommentary explores the U. S. financial systems profound changes. In 2007, the financial system began to unravel due to excessive leverage, credit risk and overall business complexity. As we look forward, we see a potentially more stable profit picture developing for these firms. And, a rising interest rates environment has historically translated to increased revenue for banks and financial institutions. Dave Ellison believes the financial sector is ripe with opportunity.
Gold for the Long Run
by Ade Odunsi of AdvisorShares,
We continue on the theme gold and the dollar but this week take a short look at their long-term relationship and relative movement over the last 40 years. In particular we focus on the period post the ending of the Bretton-Woods agreement by the Nixon administration in 1971 (the so-called Nixon Shock) which terminated dollar convertibility to gold and thus established the dollar as a fiat currency.
Abenomics 2.0
by Kenichi Amaki of Matthews Asia,
The reversal of Japan's equity markets so far this year, have led investors to wonder, "Is Abenomics working?" There are hundreds of components that comprise this economic plan, and among the recent successes has been job creation. However, macroeconomic statistics point to some emerging near-term challenges, including still-muted wage growth. This month Kenichi Amaki takes a look at both current pressures and progress in Japan.
Will the Scottish Vote on Independence Be the "Black Swan"to Financial Markets?
I wonder if the issue of an independent Scotland would actually be something of a black swan for the U.S. and world financial markets? According to Reuters, the international news agency, investors this past month, August 2014, have pulled approximately $27 billion out of UK financial assets. This is the biggest capital outflow since the Lehman crisis in 2008.
What are the 'Magic Words' to Re-engage Past Clients?
My partner and I left a firm where we worked with clients for years. It's very disheartening how few of our former clients have followed us to our new firm. In some cases, they won't even return a phone call. What magic words can we use to get them re-engaged with us?
Conditions are right for the dollar to weigh on gold
by Ade Odunsi of AdvisorShares,
In last weeks Gold Report we looked at the historical relationship between the gold price in dollars and the value of the dollar, as measured by the Intercontinental Exchange US dollar trade weighted index (USDX) and found a strong inverse relationship between the two a strong dollar has historically tended to be associated with a weak gold price.
A Choppy Path Stretches Ahead, but It Could Favor Equities
U.S. equities continued their winning ways, with the S&P 500 Index advancing 0.2% last week. Although the August employment data were somewhat disappointing, investors were cheered by strong manufacturing trends. Events outside of the U.S. also contributed to the positive tone.
Europe Takes the QE Baton
by John Mauldin of Mauldin Economics,
This week well look at what is happening across the pond in Europe, where the above-mentioned negative rates are only one ingredient in a big pot of Bizarro soup. And well think about what it means for the US Federal Reserve to be so close to the end of its quantitative easing, even as the ECB takes the baton to add 1 trillion to the worlds liquidity. And meanwhile, Japan just keeps plugging away.
The New Challenges of Price Discovery
In the past few years, price discoveryor the act of finding the right price for a securityhas become much more challenging because of falling stock volume and widening bid-ask spreads. These challenges are directly attributable to the infiltration of high-frequency traders into the market, not to mention the expansion of dark pools and non-exchange trading.
Are US Stocks Reacting Rationally?
When major market indexes reach new heights, some investors may become wary. Given that the US stock market has enjoyed robust total returns over the past five years (20092013), its only natural to question the sustainability of rising stock prices.Grant Bowers, portfolio manager of Franklin Growth Opportunities Fund, believes many of the same drivers of stock market performance over the past few years remain in place, including low inflation, healthy corporate profits and accommodative monetary policy. However, he also cautions that volatility is likely to pick up, particularly
Gold in the Time of the US Dollar
by Ade Odunsi of AdvisorShares,
Continuing on the theme of the impact that strength in the US dollar might have on the price of gold in dollars, in this weeks discussion we investigate the close historical relationship between the price of gold expressed in dollars and the value of the dollar.
Growth
by John Mauldin of Mauldin Economics,
This week I will respond to the second part of David Brins letter. Please note that David and I characterize our conversations as joyous deliberations, excited parry and thrust in the realm of ideas. I especially appreciate David because he forces me to think about many of my casual assumptions, although in a battle of wits with David I often feel as if Im bringing a knife to a gunfight. (Every writer needs a few David Brins in his life. Sometimes I think I have more than my share.)
Frustrations of a Frugal Investor
by Kendall Anderson of Anderson Griggs,
The other day I was leaving the office and a gentlemen who has known me for quite some time asked about the model year of my truck. I told him it was a 2001 and that it should still be good for another 100,000 miles. Of course my truck is known to me and many of my friends as Big Red, and it has become a family member of sorts, capable of and willing to take on any job, rather than just a truck that hauls things around.
Gold: Keeping Calm And Carrying On
by Ade Odunsi of AdvisorShares,
We continue from last weeks discussion on the role of interest rates in the gold market by looking at trends in the cost of carry of gold as priced in dollars, euro, yen and pounds. By way of a brief primer we define the cost of carry of gold in dollars as the London Bullion Markets Association 3 month Gold Forward Offered Rate (GOFO). GOFO is published every day by the LBMA and is calculated as US dollar Libor minus the gold lease rate.
Broken Links: Fed Policy and the Growing Gap Betweeen Wall Street and Main Street
by John Hussman of Hussman Funds,
The issue is not whether the U.S. economy does or does not need life support. The issue is that QE is not life support in the first place. How can policy makers help to build the economy from the middle-out, and slow the both the unproductive diversion and the lopsided distribution of resources in our economic system? We should begin by stopping the harm.
Our Take on the Fed Minutes
Usually, I don't have anything intelligent to say more than once every month or so and since I'm not a journalist, I'm never forced to make stuff up just to sell papers. I do believe, however, that the release of the Fed Minutes was worth a few of my minutes and perhaps yours. Even if you're yawning right now, please know that putting my thoughts in writing helps me to better manage your investments. As a money manager, we pick your investments, not your money managers. The buck starts and stops with us.
Gold – Keeping it Real
by Ade Odunsi of AdvisorShares,
One of our favorite measures to monitor in relation to the gold market has been the relationship between the gold price expressed in US dollars and the US 10 year real yield with the real yield being the nominal yield on a government bond adjusted for inflation expectations. Over the long term studies have shown that gold has a much stronger relationship with real interest rates versus nominal interest rates.
Australia’s Terms of Trade: Implications For Credit Investors
by Tracy Chin, Aaditya Thakur of PIMCO,
Australia is contending with a multi-year decline in the terms of trade and a rebalancing toward the non-mining sectors of the economy. For companies, the macroeconomic consequences of a downswing in the terms of trade provide both challenges and benefits. For investors, it is important to find companies that have a clear, demonstrated understanding of the macro environment and can navigate the headwinds through operational efficiencies, cost control, market positioning and balance sheet management.
7 Phrases Investment Professionals Should Never Say
Robert Isbitts posted: "As a big Robin Williams fan, this was a tough week. Ironically, before this comedic genius's shocking death on Monday, my team and I planned for this week's blog to be a parody of the work of another comedian taken from us too soon, George Carlin.
Managing Expectations - Part III
In the first of this three-part series on managing expectations, I discussed the role cycles play in the investment management process. At U.S. Global Investors, we actively monitor both short- and long-term cycles, from the annual seasonality of gold to four-year presidential elections, in order to manage expectations based on historical patterns.
A New York State of Mind
by Jeffrey Saut of Raymond James,
I met Arthur, as well as a host of other friends, last Thursday afternoon during my NYC sojourn to see institutional accounts and do media events. Over a scotch, he related the aforementioned story to me. The timing was propitious because another one of our friends had just telephoned to tell us the President was authorizing air strikes against ISIS. After a dinner at Mr. Chows, I went back to my hotel to find the preopening S&P 500 futures printing down roughly 11 points.
Theres No Place Like Home
The Comic-Con convention comes to Seattle every year. The city teams with 15 to 45-year-old folks who love to emulate their favorite comic and movie characters. We have joked lately that we should hire a young woman to dress up like Dorothy from the Wizard of Oz and come with us when we speak in public. Wed have her click her ruby red heals together and say, There is no place like home!
Low-Pressure Ways to Follow Up With Prospects
by Dan Richards,
For many advisors, the part of the business they hate the most is following up with prospects. I was reminded of this in a recent conversation with a veteran advisor who has done a great job of building visibility and relationships among an affluent community of prospects, but is struggling to turn those relationships into clients. I made three suggestions to help him move forward with the people in his target community.
Results 3,601–3,650
of 4,316 found.
