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Tag Archives: Investing
Jim Rogers on commodities investing
Jim Rogers – Bernanke simply does not know what he’s doing; Gold reaching $2000 in 5-10 years is given.
Ten predictions for the next ten years
From Bob Doll, chief equity strategist at BlakRock:
1. US equities experience high single-digit percentage total returns after the worst decade since the 1930s.
2. Recessions occur more frequently during this decade than only once a decade as occurred in the last 20 years.
3. Healthcare, information technology and energy alternatives are leading growth areas for the United States.
4. The US dollar continues to become less dominant as the decade progresses.
5. Interest rates move irregularly higher in the developed world.
6. Country self-interest leads to more trade and political conflicts.
7. An aging and declining population gives Europe some of Japan’s problems.
8. World growth is led by emerging market consumers.
9. Emerging markets weighting in global indices rises significantly.
10. China’s economic and political ascent continues.
Read more about his predictions here.
Treasury current is shifting, part 2
From WSJ (April 5, 2010):
The 10-year Treasury yield, the benchmark for U.S. consumer and corporate borrowing, rose to 4% for the first time since June.
The move extends a steady increase by Treasury yields, which move inversely to prices, lifted by a combination of stronger economic data and the barrage of debt issued by the government to meet its financing needs. Recent Treasury auctions have met with much weaker demand and Monday’s move comes ahead of more auctions this week, with the Treasury Department set to sell $82 billion of Treasury notes and bonds.The 10-year yield is a key benchmark for mortgage rates and other consumer and corporate lending.
My best take on the surge of 10-year rate is: this is due to more of investors’ early worry about US fiscal situation and rising long-term inflation expectation; rather than expectation of strong economic recovery.
Remember, the Fed can’t directly control long-term interest rate. IF the 10-y rate continues to rise as the result of rising inflation expectation, the Fed will be forced to raise short-term interest rate. This will put a brake on the tepid economic recovery, potentially causing a double-dip scenario, like the recession in 1981.
Now watch this great debate on the issue, between Jim Grant and Dave Rosenberg, on the topic whether “Treasury is for losers”…
Jim Grant holds the view that high inflation is ahead of us, and Rosenberg thinks deflation is a bigger risk, so treasury/bond securities are not bad bet.
(click to play, about 50 mins)
Peter Bernstein on risk
Late Peter Bernstein interview…highly recommended (from McKinsey)
Grantham on value investing and China
Jeremy Gratham of GMO talks about value investing: high growth does not mean high return to capital; it all depends on your entry point. He applies this classic investment philosophy to China. (source: Morngingstar Investment Conference, May 2009)
Bear Market Rally: then and now
I am not indicating at all we are going to have another Great Depression, mainly because today’s policy makers learned the past mistakes, especially Fed’s monetary/credit policy is much more expansionary (also innovative) than in Great Depression. Bernanke’s famous comments were “we won’t do it again”. But one and half years into recession, banking sector is still in a huge mess. I am very worried.
The graphs below compare bear market rallies, then (1929-1933) and now (2007- ).
Great Deleveraging:
Great Depression:
(click to enlarge)