The latest revelation on CNBC is that overseas growth can offset a slowing U.S. economy enabling the big U.S. multi-national companies to continue generating outstanding earnings. Talking head after talking head have parroted this theme for the last week and a half. Well, it is nice to be ahead of a trend for a change. Over the past three years, this has been the predominant theme of stocks in my portfolios. However, I haven’t limited myself to U.S. companies.Â
Is China Too Hot?
I am sure many were concerned on April 19th as it appeared that the markets were in for a repeat of the China led melt-down on February 27. The Chinese Stock Market’s negative take on the countries 11.1% first quarter growth rate spilled over to Europe and cast a black cloud over the U.S. Markets as it opened. The surge in growth rate coupled with a higher than acceptable consumer price index and a 23.7% growth in fixed-asset investment prompted statements such as the following from the government:Â
“If this type of fast growth continues, there is the possibility of shifting from fast growth to overheating. There is that risk,” Li Xiaochao, spokesman for the National Bureau of Statistics, told a news conference.
The government will work to “reduce the country’s large trade surplus, limit rapid growth in house prices and maintain basic price stability” – was posted on the State council’s Web site following a meeting chaired by Premier Wen Jiabao
Profit From China’s Railroad Expansion
Many thought that Warren Buffett had lost his touch when he continued buying old boring companies in the late nineties when clearly technology stocks were the key to riches. Today, how many wished that they had bought McDonald’s instead of Microsoft in 1999? Last week, news surfaced that he was buying into another industry that doesn’t have much appeal to modern investors. The smirks have long since faded. Now Buffett creates a buzz.
Anatomy of a Stock Trade: Entry Techniques
I received an email from a subscriber asking for my opinion on when to enter a trade. Do I prefer to wait for pull-backs or buy new highs? Before I answer, let’s take a look at the different elements of a trade.
I believe that there are 3 elements to each trade – Entry, Exit and Risk Management. According to Van Tharp in “Trade Your Way to Financial Freedom,” he estimates that 95% or more of the people attempting to design trading systems concentrate on finding a “great” entry signals. He goes on to say that the entry only plays a small part in making money trading. Continue reading “Anatomy of a Stock Trade: Entry Techniques”
Is it Time to Double Up on Brazil in your BRIC portfolio?
BRIC is becoming a fairly common acronym amongst investors. The term was coined in a research paper by Goldman Sachs in 2003 to describe an economic block composed of Brazil, Russia, India and China. The combination has the potential to be larger than the G6 in US dollar terms by 2050. Since the paper’s release, investors have been scrambling for ways to leverage this theme. Last fall, Claymore introduced the first BRIC ETF (EBB).Â
Before the Claymore ETF, the easiest way to invest into the theme was to use country specific ETFs. In the past, I have used EWZ (Brazil), TRF (Russia), IFN (India) and FXI (China) to capture the trend. An advantage of the country ETF approach is the ability to specify your own weighting for each country versus being locked in to Claymore’s weighting. Continue reading “Is it Time to Double Up on Brazil in your BRIC portfolio?”