An unexpected and unfortunate outbreak of the coronavirus puts pressure on the sustainability of the increase in global growth momentum. The fact that the uptick in momentum had only just started makes it relatively vulnerable to any negative shocks. In addition, the significant amount of uncertainty related to containing the virus as well as its economic impact requires an appropriate cautious stance on risky assets. ‘Appropriate’, however, does not imply getting too gloomy too early, as other factors remain positive for risky assets, and for equities in particular. Global health emergency On 30 January, the World Health Organization declared a global health emergency related to the coronavirus outbreak in China. Since then, an increasing list of countries and companies have taken numerous measures to prevent the virus from … [Read More...]
How to Harness the Power of Moving Average Crossovers
A moving average is one of the most popular technical indicators. Traders frequently use them to discern trends, identify reversals, and locate support and resistance levels. Let’s look at these powerful technical tools and one unique event: the moving average crossover. What Is a Moving Average Crossover? Moving average (MA) is a “calculation used to analyze data points by creating a series of averages of different subsets of a complete data set,” according to Investopedia. As it applies to the capital markets, an MA is an indicator that represents a smoothed representation of price action. MAs come in many types. These are the most commonly used by active traders: Simple moving average (SMA): The simple moving average is the most basic type of MA. It is … [Read More...]
2020 in tweeted charts!
Welcome to the 2020 edition of ‘the year in tweeted charts’: a reasonably concise overview of the year, with some eye-popping graphs. But, also, a useful exercise to improve my understanding of market dynamics and future investment decisions. Here goes… New highs The year started off well, with equities continuing their stellar run – the S&P 500 realized a return of more than 30% in 2019, remember – and rising 3% in the first few weeks of January. It seemed, therefore, that the longest bull market in history would last a little while longer. The longest bull market in history! https://t.co/DRLRs6DmW8— jeroen blokland (@jsblokland) January 06, 2020 What virus? If only we knew what was coming. There was an occasional mention of some new flu-… [Read More...]
Why Eurozone stocks have lagged
Since the low point for the equity markets during the global financial crisis in 2009, Eurozone equities have lagged their US counterparts by an impressive 300%. Why is this? By the look of things, it’s a combination of different factors. The first – and most important – reason is that US companies have performed much better than their European counterparts when it comes to corporate earnings. The graph below shows that since March 2009, the earnings per share of companies in the S&P 500 have increased 170%, compared with an increase in earnings of precisely 0% for companies in the Eurostoxx 50. Some of this difference can be explained by share buybacks, but for the most part it can simply be put down to profitability. Heavyweights The second reason is … [Read More...]
2019 in tweeted charts!
Below is a relatively concise overview of financial markets in 2019 using a selection of charts I tweeted throughout the year. While this probably aggravates the already pronounced calendar-year thinking of investors, it also offers potential insights to the, at times erratic, behavior of financial markets. For example, looking back chronologically towards 2019 reveals that while there was an awful lot of negative news surrounding ‘the trade war’ there was also a continuous stream of positive news. Most of this was related to a game-changer swing in monetary policy. As in many years since the financial crises, central banks were the most dominant factor in financial markets in 2019. Those who were confident enough to rely on them, once again did very, very well. January In January, … [Read More...]
Nucleus
Looking at Nucleus Software’s massive eight years of yawning under performance made me look further back in its history. There is a lot wrong with the company and the company is generally compared with OFSS and Polaris. This may not be the right comparison, 80% of revenues of Nucleus are earned outside India.All continents account for nearly equal percentage of revenues now giving it multiple legs.Annual revenues and Profits Year Revenues INR Crores Profit After Tax INR Crores 2000-01 27 10 2001-02 40 10 2002-03 60 7 2003-04 54 10 2004-05 67 15 2005-06 94 28 2006-07 146 42 2007-08 288 61 2008-09 328 32 2009-10 291 38 2010-11 270 26 2011-12 282 35 2012-13 293 45 2013-14 346 64 2014-15 350E 65E The company is dependent on a very narrow and niche segment with lumpy earnings and marked by absence of growth for multiple years at times.- No Growth, Value Trap, Mediocre Management and a few more issues with the company.Positives:Intellectual Property, Product Based company, … [Read More...]
Birkin Bag
Hermes is a legendary company. A great company, however does not always translate into a great investment for numerous reasons.This is a fairly large and mature company with 37 Billion USD market cap. with stock up 15x in past 15 years, not bad.If you remember Warren Buffett’s money spinning antennae turned on when he saw a Rich Person smoking expensive Cigar during the depression era, salivating over the profits for the business owner.One of the prestigious products of Hermes is a Birkin Bag, costing as much as sports car, ~50,000 to ~80,000 USD. In Auctions it can go up to 150,000 USD. Money isn’t enough, there is a waiting list for many years. Birkin Bag is classic example of a Veblen Good (http://en.wikipedia.org/wiki/… [Read More...]
Hairy (squared) Business – Radix Industries
Unique and thematic businesses are characterized by steep PE multiples, disregarding DCF or other sane measures of value.This company (RADIX INDUSTRIES BSE: 531412) piqued my interest as it bids and sells hair ( remy hair ) donated in South Indian temples. Human hair sell for as much as 50 Lac INR per tonne. Industry size is roughly 2500 Crores INR.This hairy business get more hirsute as I feel the company’s share have already been cornered by promoters and their friends and family members indirectly leaving no value. Company is growing 100% YoY but the industry size / MCAP (300 Crores) of 8 times leaves little room for appreciation for investors as promoters bought shares for 2 Rs but have artificially kept the price inflated at 300 Rs.TTD sells human hair … [Read More...]
The J-Hook Pattern for Massive Partners
How to use the J Hook Patterns in Trading Often you get in an uptrend when trading and you just know that it is about to pull back or do a trend reversal. Thus the J Hook becomes your best friend. Robert Hooke FRS was an English natural philosopher, architect and polymath. He originally discovered what became the J Hook pattern. He made contributions to human knowledge spanning Architecture, Astronomy, Biology, Chemistry, Physics, Surveying & Map Making, and the design and construction of scientific instruments. The J-hook starts with a strong uptrend that produces stronger than normal returns in a short period of time. The J-hook provides some simple profitable applications. The first uptrend usually shows candlestick sell signals when the initial upmove comes to … [Read More...]
Turner’s Take Podcast | Inflation and Ag Market Lows
Play Turner’s Take Ag Marketing Podcast Episode 311 If you are having trouble listening to the podcast, please click here for Turner’s Take Podcast episodes! New Podcast In this week’s episode we ask the question how will inflation change trading ranges in the ag markets once we go back to adequate and burdensome stocks. Will we see $3.00 corn again or $4.00 wheat? How about $8 soybeans or $400 canola? We take a look at what inflation did to commodity prices in the 1970s and how they never did go back to the old ranges from the 1960s. Make sure you take a listen to the latest Turner’s Take Podcast! Inflation & Ag Market Lows Below is a 60 year chart of corn. In the… [Read More...]
Sarup Industries
I had written a deep value investment idea for the partners in 2013. I had only invested in personal capacity and then sold most at no profit no loss.I got a bit late in identifying the changes recently and again entered at 80 Rs levels post BSE announcements in Dec 2014, which I failed to notice and another on 6th of Feb, bought only after 10th Feb. Main proposition of the footwear company that started same time with same financial muscle as Relaxo, i.e. little to nothing, (and is 50 times smaller today than Relaxo) is a mall project. This project was held in suspended animation due to some conflicts, my guess and real estate slowdown.The six floor mall project would have market value anywhere between 400 – 600 Crores. Even … [Read More...]
Candlestick Sentiment Trading
Trading Candlesticks As many of you know, I have been trading for over 22 years. As the years go by I become a bigger and bigger fan of Candlestick analysis because it shows investor sentiment. Here are four of my friend Steve Bigelow’s latest “How to Trade…” series. Moving Averages – We all use moving averages. Here is the “insiders” way to profit from them Trend Analysis – The trend is your friend and now it becomes your profit center Projecting Price Targets – After you get he 1-2-3 signals from the Futures Trading Secrets Course, you will no exactly where to get out Gap Analysis – I love gaps and you will too after mastering this technique These programs are practically guarantied to work … [Read More...]
Price Action to Predict Market Turns
Predicting Market Turns with Price Action If you watch market action closely you will pick up on a reliable market pattern. Strangely enough it is almost totally independent of the time frames you use. It does not matter if you are using 1 minute 15 minute, one hour, daily or even weekly time frames. Watch this video or any of your charts on any stock, ETF, or index and research this for yourself. You will find that the market reverses itself after runs of 3-4-5 or 6 consecutive trends. Technically this is called the Reversion to the Mean. After a short run like this it seems to just run out of gas. 3-6 bars from William F. McCready on Vimeo. .dpsp-networks-btns-wrapper.dpsp-networks-btns-content {margin-bottom:20px !important} … [Read More...]
Turner’s Take Podcast | Spring Wheat Planting Delays
Play Turner’s Take Ag Marketing Podcast Episode 308 If you are having trouble listening to the podcast, please click here for Turner’s Take Podcast episodes! New Podcast Today we go over what planting delays mean for the hard red spring (HRS) wheat. This market is also known as Minneapolis wheat. The US plants about 11mm acres of HRS and Canada will plant over 17mm for a combined 28 million acres. North Dakota accounts for half of all US HRS wheat acres, and makes up about 20% of all HRS production in N. America. The delays in ND are serious and if farmers can’t plant HRS wheat in the next three weeks they could choose their Prevent Plant option. To make matters worse, hard red winter (HRW)… [Read More...]
Continues to Ooze sweet
I wrote about this company as “The only company I like in Australia” two years backhttp://multibaggersindia.blogspot.com/2013/09/roe.htmlFor a developed country, it offered decent growth and was below the radar. Sadly, I only talked but not walked as the company was satisfied with 10% revenue growth. The stock has grown quite well backed by acquisitions, not only organic growth, and is 6 times up since 2013 when I wrote i.e. 210% CAGR.Even now no institution has evinced much interest in CAPILANO HONEY It is certainly hard to foresee such a strong performance from a mere low revenue compounder.But the 70% market share Capilano had in Australia, conjoined with 5% yield was screaming for attention.These days I am mulling a company which is … [Read More...]
Earnings Season Trading
How to trade Options and Futures During Earnings Season Earnings season is up on us again at the end of the quarter. First of all you will need to know what, when and how much the expected stock of your dreams is expected to move. You find this quite handily by going to Yahoo finance to find the date earning come out for your stock. You can highlight the stock to send you alerts if you like. We dot recommend placing order before earnings because the market makers tend to jack up the prices as the Implied Volatility (IV) rises. Rather we suggest you wait until after earnings are announced and if you are not sure of the direction of the stock movement, place either a straddle … [Read More...]
Crash Month is Near: Late September and early October have hietorically had large market crashes. Remember 1987. I am trading short most of this…
The post Crash Month is Near: Late September and early October have hietorically had large market crashes. Remember 1987. I am trading short most of this month to guard against large quick drops. appeared first on Futures Blog by Bill McCready. [Read More...]
Technical Analysis of Stocks: Understand the Pros and Cons
In today’s equities marketplace, the technical analysis of stocks is a popular discipline. Each day, millions of market participants use tools, indicators, and price action as primary decision-making mechanisms. Read on to learn more about the advantages and disadvantages of stock market technical analysis. The Technical Analysis of Stocks Technical analysis is the study of past and present price fluctuations to predict future market behavior. It is a go-to method in the forex, futures, and shares markets. Within the realm of equities, technical analysis helps market participants address volatility in shares, indices, and exchange-traded funds (ETFs) from a practical standpoint. Of course, you should remember a few important pros and cons when using technical analysis to trade and invest in stocks: Pros Every type … [Read More...]
Wide Moat Investing in a Leaky Boat market
I wrote six months back (March 2014) at http://multibaggersindia.blogspot.com/2014/03/replicate-and-imitate.htmlthat “I missed Nigeria (A mistake I hope to fix in coming weeks and months).” I’ve not been smart enough and yet to correct that blunder.7UP Bottling (Pepsi Cola) at the time was 70 Nigerian Naira, in six months since then the latest price of 7UP is 162, these are high quality ideas where one can bet 10% of a large fund portfolio. In Calender 2014 the company has appreciated 128% as of date.Buffett, “Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks” In this case the ‘chronically leaking boat’ for me is absence of … [Read More...]
GlaxoSmithKline Nigeria – initial thoughts
GSK NigeriaAbstracts and thoughts based on previous four annual reports and some news articles:Revenue Growth between 2006 – 2010 at 12-14% rate2010 Turnover up 13% PAT up 45%, PE Ratio 10 -122011 Turnover up 28% PAT up 16% PE Ratio 1015 new products were launched in 2011 ! This is a great innovation metric used by 3M and Google. It quantifies an otherwise black art of innovation estimation.3M mandates that 35% of the revenues should come from products launched in the past four years. The company stands out distinctly with its assorted collection of knick knacks.GSK stood out in the past decade on this score. Some organisations call it “vitality index” or “innovation index”, measured as new product revenues dividedby total revenues. New product in Silicon Valley may be 9 months, 3 years… [Read More...]