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| Kuwait Expects Faster Growth, Lower Inflation Rate BusinessWeek Crude prices, which fell to a low of $34 a barrel in December 2008, have averaged about $79 this year. Oil is trading at about $83 a barrel today. ... See all stories on this topic » |
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| Irish Min: Talks With IMF/EU Seen Concluding Sunday Wall Street Journal By Quentin Fottrell Of DOW JONES NEWSWIRES DUBLIN (Dow Jones)--Irish Communications Minister Eamon Ryan said Saturday talks between the EU and International ... See all stories on this topic » |
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Stopping the foreclosure process is on the minds of many across America. The housing sector is struggling and interest rates for long term loans were just subject to another minor increase. Interest rates though remain at relative lows right now and many would like to lock into a long term 15 or 30 year fixed rate mortgage. Unemployment applications are decreasing and the average American income is moving in a positive direction. Americans are now in a better position to close on a home. One problem right now is the foreclosure process. Homes that were potentially available due to foreclosure are waiting in limbo right now due to red tape and paperwork related to the foreclosure process. Since banks across America came under fire for improperly seizing homes for foreclosure, the process of completing a foreclosure has been stalled and those waiting on the sidelines to make the purchase must wait longer. The documentation, which is part of the foreclosure process, is elongated and is detrimental to the housing sector recovering in our market. October sales of existing homes fell 2.2%, more than analysts had forecast according to the National Realtors Association. An efficient process is needed when reviewing the foreclosure process. The state of the housing sector and national economic recovery overall would both benefit. Author: Stephen Johnson
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Dow Jones Ends on the Losing End of Black Friday Planet Insane – 28 minutes ago The Dow Jones Industrial Average (INDEXDJX:.DJI) went down by 0.85 percent or 95.28 points to 11,092. Friday saw JP Morgan Chase (NYSE:JPM) go down by 1.7 percent. Dupont also went down by 1.6 …
Dow Jones Ends on the Losing End of Black Friday
CPI International, Inc. (NASDAQ:CPII) shares are currently trading at $19.28, a spike of 33.24% from previous closing price of $14.47. The company's shares have 52-week trading range of $16.20 – $9.27. The stock is trading at volume of 208,962 shares. The market capitalization of the company is $324.1 million. Today, the company announced its merger agreement under which CPI International will be acquired by an affiliate of Veritas Capital for $19.50 per share in cash. The purchase price reflects a premium of approximately 35% over the closing price of CPI common stock on November 24, 2010, and 38% over the average closing price of the CPI common stock for the 90 days ending November 24, 2010. The transaction is valued at approximately $525 million. CPI International is a provider of microwave, radio frequency, power and control products for critical defense, communications, medical, scientific and other applications. Disclaimer: The assembled information distributed by epicstockpicks.com is for information purposes only, and is neither a solicitation to buy nor an offer to sell securities. Epicstockpicks.com does expect that investors will buy and sell securities based on information assembled and presented herein. EpicStockPicks.com will not be responsible in any way for or accept any liability for any losses arising from an investor's reliance on or use of information obtained from our website or emails. PLEASE always do your own due diligence, and consult your financial advisor.
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Epic Stock Picks
More breaking news stories could affect stocks when trading continues later. The following stocks should see some movement: Delta Air Lines (NYSE:DAL), JP Morgan Chase & Co. (NYSE:JPM), Ford Motor Company (NYSE:F). Here is a more detailed look at the news that will affect each company when trading continues. Delta Air Lines (NYSE:DAL) Delta Air Lines (NYSE:DAL) has offered its support to Garuda Indonesia's joining SkyTeam. Delta Air Lines (NYSE: DAL) issued the following statement in support of Garuda Indonesia’s decision to join the SkyTeam global airline alliance in 2012. Vinay Dube, the senior vice president of Delta Air Lines (NYSE:DAL) Asia Pacific said that, “We are honored that Garuda Indonesia has chosen to link its future growth and success with Delta and our SkyTeam partners, while bringing our alliance unique access to Indonesia. Garuda’s growing hubs in Jakarta and Denpasar, and extensive network throughout Southeast Asia and the Pacific, will bring our customers greater access to destinations across one of the world’s fastest-growing regions.” JP Morgan Chase & Co. (NYSE:JPM) J.P. Morgan Chase & Co. (NYSE:JPM) has raised their target price on Ship Financial Int't Ltd. J.P. Morgan Chase & Co. (NYSE:JPM) is raising its price target on Ship Finance International Limited to $22 from $21, and is keeping its Underweight rating on the name. J.P. Morgan Chase & Co. (NYSE:JPM) said to clients that, “SFL posted 3Q10 EPS of $0.46 (excluding one-time items), coming in below our estimate of $0.52 and slightly lower than the average Street forecast of $0.47 as lower-than-expected revenue ($0.06 EPS impact) and higher-than-expected interest costs ($0.03 impact) were partially offset by lower G&A expense than we forecasted ($0.02 benefit). SFL’s board approved a third consecutive quarterly dividend increase for 3Q, up $0.01 to $0.36 per share. We are lowering our 4Q10 and '11 EPS forecasts primarily to reflect lower profit-sharing revenue projections and a higher interest expense run rate. We reiterate our Underweight rating on SFL, though we are raising our December 2011 price target to $22 (from $21).” Ford Motor Company (NYSE:F) Ford Motor Company (NYSE:F) has helped raise $6,000 for a local high school. Ford Motor Company (NYSE:F) and Delehanty Ford recently partnered to raise $6,000 for Flushing High School as part of Ford Motor Company (NYSE:F)'s Drive One 4 UR School program. Community members took advantage of the opportunity to raise money by test driving a new Ford Motor Company (NYSE:F) vehicle. For every person who test drove a 2010 or 2011 Ford Motor Company (NYSE:F)'s vehicle, Delehanty Ford donated $20 to Flushing High School. The school will use the funds to benefit the band and athletic boosters. We could possibly see more movement when trading continues for Delta Air Lines (NYSE:DAL), JP Morgan Chase & Co. (NYSE:JPM) and Ford Motor Company (NYSE:F).
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E money daily
Inflation? Why, it’s just what we always wanted…!
WITH THE U.S. markets shut down for Thanksgiving and a game of football, there was no Wall Street ‘lead’ for the local bourse to follow yesterday, writes Greg Canavan of Australia’s Sound Money, Sound Investments.
Just as well then that Reserve Bank governor Glenn Stevens gave investors something to focus on. In his ‘Opening Statement’ to the House of Representatives’ Standing Committee on Economics, Mr Stevens told the assembled bureaucrats that the price of money in Australia is just about right. The vibe of the speech was that rates would stay where they are for the time being, but further increases down the track were still on the cards.
Stevens is concerned about the cost of labor, which has a major bearing in the cost of money:
“Growth in labor costs, however, is no longer declining, but rising. The overall pace could not be described as alarming at this stage, but the turning point is behind us.”
Wages are a big deal in the inflation equation. Price rises without compensating wage increases are actually deflationary. If the price of your electricity bill goes up (and it certainly has in New South Wales lately) for a given disposable income you have less to spend elsewhere. That’s not inflationary.
But if you bargain for a wage increase and do not increase your output, THAT is inflationary. Wages are the biggest expense for businesses so wage pressures are generally followed by price rises. Hence Stevens’ legitimate concerns.
So if the unions, the great protector of the worker, continue to have success in fighting for higher wage claims without offsetting productivity gains, you can expect to see inflationary pressures strengthen, and interest rates to rise again next year.
Speaking of productivity, or lack of it, we should point out that the government is contributing heavily to the upward pressure on wages. The latest figures from the ABS show that full time adult total earnings for the public sector rose a hefty 6% for the 12 months to August 2010 on a trend basis. This compares to private sector growth of 4.3%. The problem is, government workers do not produce anything of value. The productive part of the economy, the private sector, sustains the public sector via the taxes they pay. So the fact that wages are rising faster in the non-productive part of the economy is troubling.
What’s also troubling for Stevens and his mission of guessing the right level for the price of money in Australia is China. What happens there is the wildcard for interest rates. Credit conditions in Australia are very weak and do not call for interest rate tightening at all. Credit growth is down to an annual rate of 3.3% (all due to housing, by the way) while growth in M3 money supply is 5.8%.
The inflationary impetus is coming from China. While Stevens didn’t mention China directly, he mentioned its proxy, the ‘terms of trade’ on a few occasions.
“Measured in nominal terms, the rise in GDP is running at about 10% per annum just now, because of the rise in the terms of trade.”
China’s credit boom (where growth in bank lending reached 33% in late 2009 and is still buzzing along at around 18%) is clearly spilling over into Australia via record high iron ore and coal prices.
As Stevens’ points out, this is due to very strong demand for steel. We all know the emerging economies are growing strongly/industrializing, hence the demand for steel.
But what is really causing it? If the developed economies of the west are struggling to recover from the credit crisis and experiencing below average levels of demand, why are the developing nations growing so fast? After all, isn’t the west meant to be the buyer of the emerging markets’ goods?
In China at least, the answer comes down to the lending binge that kicked off in late 2008. This was an unprecedented attempt to reflate the Chinese economy during the deflationary shock of the credit crisis.
It certainly worked. Get a load of this. In 2009, China’s banks lent out a whopping 9.6 trillion Yuan, equivalent to around US$1.44 trillion. The lending target for this year is 7.5 trillion Yuan (US$1.13 trillion) but that looks like being exceeded easily.
As the Chinese bureaucrats are now finding out, once a credit boom takes hold it is very hard to stop.
The majority of these loans are going into ‘fixed asset investment’. According to an article in Fortune: ‘Fixed-asset investment accounts for more than 60% of China’s overall GDP. No other major economy even comes close. And of that fixed investment, slightly less than a quarter is attributable to new real estate investment.
Fixed-asset investment means buildings, road, property. Tangible, ‘fixed’, objects. There’s your steel demand right there. That’s certainly good for Australia now and it is giving Stevens plenty of food for thought when it comes to setting interest rates. But surely he must be wondering what happens when the Chinese lending and fixed asset boom ends, as it surely will. (Or is it different, this time, in China?)
One thing is for certain. The bureaucrats in Canberra wont be asking Stevens about Australia’s very heavy reliance on China’s ongoing boom. More than likely they’ll be playing politics (it’s what they do) and asking why banks can’t make the price of money for housing cheaper than it should be.
After all, no one wants to see the end of a boom, especially politicians.
Buying Gold or physical Silver Bullion today…?
gol2664
Below are the top 10 best-performing U.S.-listed Chinese stocks year-to-date, UPDATED TODAY before 4:30 AM ET.
China Shen Zhou Mining & Resources Inc. (AMEX:SHZ) is the 1st best-performing stock year-to-date in this segment of the market. It has risen 278.87% since the beginning of this year. Its price percentage change is 202.25% for the last 52 weeks. Spreadtrum Communications, Inc. (NASDAQ:SPRD) is the 2nd best-performing stock year-to-date in this segment of the market. It has risen 206.23% since the beginning of this year. Its price percentage change is 256.50% for the last 52 weeks. 51job, Inc. (ADR) (NASDAQ:JOBS) is the 3rd best-performing stock year-to-date in this segment of the market. It has risen 184.03% since the beginning of this year. Its price percentage change is 169.55% for the last 52 weeks. Baidu.com, Inc. (ADR) (NASDAQ:BIDU) is the 4th best-performing stock year-to-date in this segment of the market. It has risen 165.96% since the beginning of this year. Its price percentage change is 147.34% for the last 52 weeks. Renhuang Pharmaceuticals, Inc. (AMEX:CBP) is the 5th best-performing stock year-to-date in this segment of the market. It has risen 144.90% since the beginning of this year. Its price percentage change is 140.00% for the last 52 weeks.
China Southern Airlines Limited (ADR) (NYSE:ZNH) is the 6th best-performing stock year-to-date in this segment of the market. It has risen 125.29% since the beginning of this year. Its price percentage change is 103.99% for the last 52 weeks. Jingwei International Limited (NASDAQ:JNGW) is the 7th best-performing stock year-to-date in this segment of the market. It has risen 108.50% since the beginning of this year. Its price percentage change is 85.33% for the last 52 weeks. Fuwei Films (Holdings) Co., Ltd (NASDAQ:FFHL) is the 8th best-performing stock year-to-date in this segment of the market. It has risen 96.72% since the beginning of this year. Its price percentage change is 103.39% for the last 52 weeks. ReneSola Ltd. (ADR) (NYSE:SOL) is the 9th best-performing stock year-to-date in this segment of the market. It has risen 96.43% since the beginning of this year. Its price percentage change is 135.52% for the last 52 weeks. VanceInfo Technologies Inc. (NYSE:VIT) is the 10th best-performing stock year-to-date in this segment of the market. It has risen 95.21% since the beginning of this year. Its price percentage change is 113.68% for the last 52 weeks.
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China Analyst
Top 10 Best-Performing U.S.-Listed Chinese Stocks Year-to-Date: SHZ, SPRD, JOBS, BIDU, CBP, ZNH, JNGW, FFHL, SOL, VIT (Nov 27, 2010)
What if we told you that there was a way to find stocks that the market had already sold, ahead of a pullback. Wouldn’t it make sense to buy these “pre-sold” companies when the market pulled back as they’re the stocks likely to rally earlier? Our data says yes. The market made a dramatic pullback on Tuesday, thanks to international tensions over the developments in North Korea and South Korea, Ireland’s bailout from the EU, with Portugal and Spain possibly next, and the Fed’s lowered economic forecast. The pre-holiday jitters have stocks trading to key support level as the S&P 500 Index is now hovering around the 1,175 level that provided support a week or so ago. So, you’re asking, where should I be buying if everyone is now selling? How about the companies that investors have been “pre-selling” during the rally? What I’m referring to are the companies that have seen an increase in short interest activity. Short sales represent the bearish bets that investors make by selling stock that they’ve borrowed on margin with the plan to buy the shares back at a lower price in the future to satisfy the liability of the shares they sold earlier. We use the term “pre-sold” when referring to companies that have seen a rise in short interest while their share prices have trended higher. Our goal? To find technically strong stocks that have been extensively “pre-sold.” This provides us with a list of strong bounce candidates when the market finally sees a correction, as it is seeing now. The table below displays some of the top results of our latest “pre-sold” model, which evaluates more than 7,000 companies daily for signs of healthy bounce-back potential. According to our work, the stocks on this list are more likely to post a strong recovery from the selling pressure that has pulled stocks lower. Among the list are a few companies that have caught our attention as bullish candidates that are worthy of leveraging with call options. Rackspace Hosting, Inc. (NYSE: RAX ) This is one of the cloud computing companies that investors have been so excited about. Short sellers have pre-sold the stock, despite the fact that RAX posted fundamentally strong results and remains in a strong technical uptrend. We like the opportunity to get into these shares on a pullback to the $27 level before the shorts start covering their positions. Williams-Sonoma, Inc. (NYSE: WSM ) High-end retail continues to rule the holiday season, and you have to consider a store that sells turkey roasting pans for $300 high end. The stock dropped from $36 to $32 last week after its earnings report, but the stock’s short interest ratio of 7.4 suggests that it had been pre-sold before that report hit the wire. We would consider the current price of around $32 to be an opportunity to jump back into this retail play. Aruba Networks, Inc. (NASDAQ: ARUN ) Another cloud computing play, ARUN has been on a tear after a positive earnings report last week. The stock is pulled back Tuesday, retracing back to $23. We took the opportunity to close out a winning trade on this company today in our Winning Edge service , but we’re looking for an opportunity to get into this pre-sold stock before the shorts start to cover their positions by buying the stock. Consider $21.50 a great entry price for a bullish call position on this popular cloud company.
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InvestorPlace
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As a resident of California, I am very aware of the issues and political football called water rights. Access to water is a topic of concern for all the states in the southwest. But it is not just a United States issue, water scarcity is a problem for countries around the world, especially in the Middle East . Water desalination, also referred to as desalinization and desalinisation, could be one of the leading industries in the next decade. Some major companies, such as Siemens (SI) and General Electric (GE) have water desalination divisions that make up a small part of their businesses, but there are other companies which are more of a pure play in the industry. According to the list of water purification and desalination stocks at WallStreetNewsNetwork.com, there are over twenty companies involved in the treatment of water, and several of them have specifically targeted desalination. Consolidated Water Co. Ltd (CWCO) is one of the purest plays in the sector. It operates seawater desalination plants and other water services in the Cayman Islands, the Bahamas, Belize, the British Virgin Islands, and Bermuda, using reverse osmosis technology to convert seawater to drinkable water. The stock trades at 17 times forward earnings and provides a nice yield of 3.2%. The company has raised its dividend in eight of the last ten years. Tetra Tech (TTEK) designs and builds desalination systems that use seawater, brackish water, and reclaimed wastewater sources to help increase water supply, and has been designing desalination plants in Florida since the 1990s. It also designed the first California desalination plant, the Corona Temescal Desalter. The stock has a forward price to earnings ratio of 15. To see an Excel list of all the stocks involved in desalination and purification , which can be downloaded, sorted, and updated, go to WallStreetNewsNetwork.com. Disclosure: Author did not own any of the above at the time the article was written. By Stockerblog.com
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Dow Jones Industrial Average Falls Amid Worries over Europe's Debt Crisis ThirdAge – 20 hours ago The Dow Jones industrial average fell 81.21 points or 0.73 percent to 11,106.10 in early trading Monday, UPI reported. The Nasdaq composite index fell 9.39 or 0.37 percent to 2,533.73. Investors …
Dow Jones Industrial Average Falls Amid Worries over Europe's Debt Crisis
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Gold and Silver are trending lower due to world concerns. It was an up and down week in the U.S. stock market due to these overseas concerns. Economic reports in the U.S. were relatively positive during the week, but world news overshadowed with anxiety provoking reports. As of end of week close and last trade posted in the U.S. session this week, gold and silver price per ounce had fallen. Gold for December delivery price per ounce was lower by .77% at $1,362.40. Silver price per ounce for December delivery contract was lower by 3.01% at $26.70. Gold and silver fell lower on Friday on continued apprehensions relating to the North and South Korean animosities, in addition to anxieties relating to the European debt crisis and financial instability. China is the largest consumer of metals and as the Chinese government continues attempts to slow down its economy, apprehensions in this sector grow. Overall in 2010, Gold has jumped 23%. Analysts believe that the price jump overall stems from oversees demand, but the message out of China right now is indirectly negative. The move to slow down their economy will be interpreted as an inflation reducing event and increase apprehensions about investing in precious metals right now. In addition, the dollar is gaining relative strength on the euro’s struggles. A recession in Europe is possible and the the euro’s struggles are boosting the dollar’s value. The inverse relationship between the dollar and precious metal investing may also stem the tide for the safe haven asset acquisition in the current global economy. Author: Camillo Zucari
Below are today's top 10 focus stocks. These momentum stocks are attracting a lot of interest from traders. Three Chinese companies (SYUT, CMM, CIS) are on the list.
CPI International, Inc. (NASDAQ:CPII) is today's 1st best focus stock. Its daily price change was 33.5% in the previous trading day. Its upside potential is -18% based on brokerage analysts' average target price of $16 on the stock. It is rated positively by 0% of the 2 analyst(s) covering it. Its long-term annual earnings growth is 12% based on analysts' average estimate. Synutra International, Inc. (NASDAQ:SYUT) is today's 2nd best focus stock. Its daily price change was 17.1% in the previous trading day. Its upside potential is 11% based on brokerage analysts' average target price of $16 on the stock. It is rated positively by 67% of the 3 analyst(s) covering it. Its long-term annual earnings growth is 27% based on analysts' average estimate. Vertro Inc (NASDAQ:VTROD) is today's 3rd best focus stock. Its daily price change was 14.5% in the previous trading day. Its upside potential is -12% based on brokerage analysts' average target price of $6 on the stock. It is rated positively by 100% of the 1 analyst(s) covering it. Its long-term annual earnings growth is 20% based on analysts' average estimate. China Mass Media Intl Adv Corp. (ADR) (NYSE:CMM) is today's 4th best focus stock. Its daily price change was 8.5% in the previous trading day. Its upside potential is 54% based on brokerage analysts' average target price of $4 on the stock. It is rated positively by 50% of the 2 analyst(s) covering it. Its long-term annual earnings growth is 9% based on analysts' average estimate. Camelot Information Systems Inc (NYSE:CIS) is today's 5th best focus stock. Its daily price change was 4.9% in the previous trading day. Its upside potential is 4% based on brokerage analysts' average target price of $19 on the stock. It is rated positively by 67% of the 6 analyst(s) covering it. Its long-term annual earnings growth is 23% based on analysts' average estimate.
Del Monte Foods Company (NYSE:DLM) is today's 6th best focus stock. Its daily price change was 4.7% in the previous trading day. Its upside potential is -9% based on brokerage analysts' average target price of $17 on the stock. It is rated positively by 20% of the 10 analyst(s) covering it. Its long-term annual earnings growth is 7% based on analysts' average estimate. Continental Airlines, Inc. (NYSE:CAL) is today's 7th best focus stock. Its daily price change was 1.3% in the previous trading day. Its upside potential is 31% based on brokerage analysts' average target price of $33 on the stock. It is rated positively by 86% of the 7 analyst(s) covering it. Its long-term annual earnings growth is 15% based on analysts' average estimate. IRSA Inversiones Representaciones (ADR) (NYSE:IRS) is today's 8th best focus stock. Its daily price change was 1.2% in the previous trading day. Its upside potential is 10% based on brokerage analysts' average target price of $18 on the stock. It is rated positively by 100% of the 3 analyst(s) covering it. Its long-term annual earnings growth is 13% based on analysts' average estimate. Forestar Group Inc. (NYSE:FOR) is today's 9th best focus stock. Its daily price change was 0.7% in the previous trading day. Its upside potential is 38% based on brokerage analysts' average target price of $26 on the stock. It is rated positively by 100% of the 2 analyst(s) covering it. Its long-term annual earnings growth is 20% based on analysts' average estimate. NCI, INC. (NASDAQ:NCIT) is today's 10th best focus stock. Its daily price change was 0.4% in the previous trading day. Its upside potential is 18% based on brokerage analysts' average target price of $26 on the stock. It is rated positively by 42% of the 12 analyst(s) covering it. Its long-term annual earnings growth is 15% based on analysts' average estimate.
tdp2664
China Analyst
Top 10 Focus Stocks of The Day: CPII, SYUT, VTROD, CMM, CIS, DLM, CAL, IRS, FOR, NCIT (Nov 27, 2010)
Atlantic Coast Federal Corporation (NASDAQ:ACFC) shares are currently trading at $1.50, a spike of 10.29% from previous closing price of $1.36. The company's shares have 52-week trading range of $4.25 – $1.08. The stock is trading at volume of 511shares. The market capitalization of the company is $20.1 million. Recently, the company announced its commencement of stock offering for sale the 65.1% ownership interest in the company currently owned by Atlantic Coast Federal, MHC, which is equivalent to between $17.0 million and $23.0 million, or between 1,700,000 and 2,300,000 shares of common stock at $10.00 per share. The company may increase the number of shares that it sells in the offering, without notice to persons who have subscribed for shares, by up to 15%, to $26.5 million or 2,645,000 shares at $10.00 per share, as a result of market demand or changes in the financial markets. The number of shares to be sold in the offering is based on an independent appraisal of the estimated pro forma market value of Atlantic Coast Financial Corporation as of August 20, 2010. Atlantic Coast Federal Corporation's primary activity is holding all of the stock of Atlantic Coast Bank. The Bank's principal business consists of attracting retail deposits from the general public and investing those funds primarily in permanent loans secured by first mortgages on owner-occupied, one- to four-family residences, home equity loans, commercial real estate loans and, to a lesser extent, automobile and other consumer loans. Disclaimer: The assembled information distributed by epicstockpicks.com is for information purposes only, and is neither a solicitation to buy nor an offer to sell securities. Epicstockpicks.com does expect that investors will buy and sell securities based on information assembled and presented herein. EpicStockPicks.com will not be responsible in any way for or accept any liability for any losses arising from an investor's reliance on or use of information obtained from our website or emails. PLEASE always do your own due diligence, and consult your financial advisor.
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Epic Stock Picks
ProShares Ultra Russell2000 Value ETF (NYSE: UVT ) — This leveraged ETF seeks daily investment results that correspond to twice the daily performance of the Russell 2000 Value Index. On Aug. 30, the Trade of the Day recommended taking a position in UVT at $19 with a target of $22 to $24. And on Sept. 29, I said that since $24 had been achieved, “it is time to take your gain and run.” Well, UVT had other plans and jumped above $28.50. Now, with a correction in progress, we’d like to get back into this ETF at under $25 with a trading objective of $30. Leveraged ETFs carry greater risk than ordinary ETFs. The SEC has determined that these investments are designed for short-term trades and are not appropriate long-term investments. The margin requirement for most leveraged ETFs is 100%, but check first with your broker before entering an order. Also, please keep in mind that the Trade of the Day is not a managed portfolio. You must decide where to get in and where to get out, and I strongly urge you to use stop-loss orders. If you have questions or comments for Sam Collins, please e-mail him at samailc@cox.net .
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InvestorPlace
People making Gold Investments break into 3 different types…
OVER THE LAST 10 YEARS, the Gold Price has risen from $300 to $1400 an ounce, writes Julian Phillips of the Gold Forecaster.
There are several more important reasons than its being ‘just a commodity.’ The strongest driving force behind gold’s rise in the last four years has been investment demand. As a commodity, it doesn’t tarnish, it’s a great conductor, and makes good looking jewelry. But these reasons are not the reasons why people invest in gold.
When they do Buy Gold, people lock it away. When they do keep it close, they take it out only occasionally to look at it. Most gold is never looked at or ever seen by its owners. It is stuck in a vault below ground. So if gold is not used or admired, why was so much of it bought so as to make the Gold Price multiply more than four times over this century and why will so much be bought in the future so as to make it likely to multiply a few times more in the future?
In short, the Gold Price is not about gold, but what the investor believes it to be and the value he assigns to it. More than that, it is about the gold investor and what drives him.
Gold Investment requirements are different for different investors. In gold, there are three types of investor.
The first type is one who starts Gold Investing for profit. His aim is to buy low and sell high. He usually uses technicals (charts) and other similar tools to guide him to do this well. He will use currencies as his measuring rod. So to buy for $100 and sell for $200 would mean to make a 100% profit. The assumption is that the Dollar’s value will remain constant. Whereas, the reality is that when one is Buying Gold, one sells the Dollar and when one sells gold one buys the Dollar. (Remember that the writer of the Dollar note stated that he trusts in God – which God?)
Nevertheless, since the last war the Dollar, equities and the plethora of different investment instruments available to the US investor have served the purpose of building up a store of wealth that can take care of him in his old age or be left to his heirs. The mindset of the developed world investor is to use his education and investment skills to build up profits to create his wealth. But more than that, he uses and implicitly trusts financial institutions to support his quest for wealth.
The second type of investor has the same eventual aim of creating wealth for his old age or to leave to his heirs. However the path to that wealth is not through the use of profits to create more, but primarily through his own separate endeavors taking profits from them and investing in a safe place such as property or Gold Bullion – two assets that represent a store of wealth not associated with profits, but simply a recognized store of wealth that will retain its value throughout his life. More than that, he puts his wealth out of the reach of financial institutions and his government.
The third type of investor is government, which is completely different today, in that it wants gold to sit in his reserves on a permanent basis, with no profit in mind at all. Government holds it for the best reason and that is to keep things going on the dark rainy days, when its own currency just won’t do the job it should and to counter the swings in his other currency holdings. It is used as a measure of stability in his reserves and gold helps to get that. Apart from a 40 year courtship without gold at center stage, gold has always been internationally respected and valued as money. It is still, as the central banks now confirm, through the cessation of their gold sales and by those who are persistently buying irrespective of the price. It is the central banks alone that will ensure that the Gold Price will continue to rise, because it is not about gold itself, but about gold as money trusted internationally by people and governments.
The profiteer may well find the second investor’s approach too simple, until he looks back over the last ten years and measures the growth of the value of gold against that of equities. The second type of investor usually comes from the world east of Europe, where corruption, changes of government and turmoil have left a people with little trust in institutions and a great deal of self-sufficiency. Until a few years ago the west could trumpet that their institutions were part and parcel of wealth creation. That is changing now. While the east has far less institutional cohesion as a result of their past, they have never lost their belief that gold is the real money. The west is headed back that way now.
And the central banks are now either holders or buyers, but not sellers. Why?
Gold is money in a crisis when nothing else can be trusted or relied on. It retains it value when enemies exchange it. It is an international asset. A man from China will value it as much as a man from South Africa or Canada. Its price is set in London and used in the far reaches of the earth. There are no unfulfilled obligations attached to it. It is free from all national restraints that come with paper cash. Today, most importantly it reflects no national economic fundamentals and is not under the control of any individual or group of nations. It is free of government!
Nothing else fits that bill, nor will it. As we watch the Gold Price move like a flowing tide subject to the ebbing and flowing waves of price movements, we are intrigued that there are still so many commentators that believe it is a metal in a bull market that will inevitably be followed by a bear market. We do not subscribe to that opinion. We feel that mankind is moving back to a period of time marked by uncertainty, instability and a tremendous shift in world power, when debt obligations issued by individual governments, called currencies will have a relative value. Gold on the other hand, will reach the point where it will be an arbiter of value. Even the head of the World Bank has suggested that role. Despite the restraint it puts on all governments, the pressure we see ahead for the world will ensure that more and more people will come to consider gold as real money.
Buying Gold today…?
gol2664
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