Spain & the U.K. – unloved & contrarian.

September 30, 2020 Leave a comment

Today, my best Long Term Buy & Hold Equity Index ideas are;

the UK’s FTSE 100 and Spain’s IBEX 35

They are currently trading at 5,897 & 6,713 respectively.

(preferring the FTSE 100 between 2%-4% lower from today)

They are both unloved, contrarian opportunities.

Heck, the FTSE 100 and the IBEX are both trading is trading at the same price they were 22 years ago (in 1998).

Let’s check back in 5 years….

September 30, 2020

by Rob Zdravevski

rob@karriasset.com.au

Filed under Finance & Investment Tagged with

The NASDAQ is not in a bubble

September 30, 2020 Leave a comment

As the Nasdaq 100 (and S&P 500) completes a bearish outside reversal month, I wanted to show that historically, this index is not in a bubble.

The index is trading at an extreme and although the P/E ratio and other valuation metrics are lofty, they are not at all time highs.

They are not in a bubble.
We have not seen a mania.

Although it is cringeworthy that 5 stocks (Apple, Amazon, Microsoft, Alphabet & Facebook) make up 45% of the index’s weighting, the Nasdaq 100 is yet to trade to the stratospheric percentage levels above its 200 day moving average, as seen in 2000.

My macro view on this index is another thing.
hint – I am not a buyer of the Nasdaq 100 Index.
(see my other posts about certain Nasdaq stocks resembling the Nifty 50)

p.s. be careful of those using the word ‘bubble’, especially when they use it for effect and more so, without doing their research.

Those type of folks tend to fabulously successful reaping reward by selling fear to the uninformed and the jittery.

September 30, 2020
by Rob Zdravevski
rob@karriasset.com.au

Filed under Finance & Investment Tagged with , ,

2nd chance to buy coffee

September 29, 2020 Leave a comment

Coffee didn’t quite trade down to the $1.06 buy price I was looking for, as per my July 31, 2020 note. (see link below)

Instead, it carried on higher from the $1.15 level mentioned, towards a $1.34 high.

The chart below shows a trend line it hugged and held, until it didn’t.

A trader protecting their position may have placed a stop loss order about 1 cent below that trend line.

The long term supply disruption theme remains intact, however the short term gyrations have seen it trade back to its 200 day moving average albeit its not yet oversold.

I may have a second chance to buy coffee around the $1.05 level, but I’ll watch it closely for the velocity of the decline and whether it holds recent lows.

https://lnkd.in/eSrBa-i

September 29, 2020
by Rob Zdravevski
rob@karriasset.com.au

Filed under Finance & Investment Tagged with ,

You won’t lose your job hedging at these levels

September 28, 2020 Leave a comment

When the price of Gold in Australian Dollars trades at 50% above its weekly 200 moving average……it may be time for Aussie gold producers to hedge.

Similar to my previous work on the USD price,
https://lnkd.in/gK9hj-P

…..the chart below shows the various percentages that the XAUAUD price is relative to its 200 dma.

If you combine the recent surge in the gold price with the historic peaks of the CME gold futures margin requirements, a long term overbought reading in the AUDUSD and my other extremes seen in Gold……

you’re unlikely to lose your job, hedging your gold resource and reserves at these prices.

Incidentally, when the CME hiked margins requirements on August 11th, 2020, the AUD gold price fell and closed at A$2,676.

Today, it’s trading at A$2,636. Much of a muchness, although mean reversion and probability can be unpleasant.

September 28, 2020
by Rob Zdravevski
rob@karriasset.com.au

Filed under Finance & Investment Tagged with ,

Apple’s market cap is larger than South Korea’s GDP

September 28, 2020 Leave a comment

If Apple’s market cap (currently $2 trillion) doubles from here, it’ll be larger than the German economy. *
(and Amazon and Microsoft aren’t too far behind)

Today, Apple’s value is already larger than economies of Italy, Brazil, Canada, Russia, Spain or South Korea.

It’s already nearly double that of Australia’s GDP.

Many speak about “big tech” being overvalued and perhaps so, but a more pertinent reason to consider before buying shares in such behemoths at today’s prices is the LAW OF LARGE NUMBERS.

And a couple years ago, I thought Exxon Mobil was a Goliath at $350 billion market cap…..

Investors may find more interesting investment ideas in the Mid Cap market. FYI, the average market cap of a stock in the S&P 400 Mid Cap Index is about US$4.7 billion.

* Germany’s annual GDP is $3.7 trillion.

p.s. we know that GDP isn’t an equal measure to market capitalisation, but it made me raise an eyebrow.

#aapl#amzn#nasdaq#midcaps

September 29, 2020
by Rob Zdravevski
rob@karriasset.com.au

Filed under Finance & Investment Tagged with , , , , , ,

The great cities won’t die

September 28, 2020 Leave a comment

Reports and theories about cities “dying” are greatly exaggerated.

The novelty and convenience of working from home should wear off and if you are ‘institutionalised’, commercial reality and economic necessity will prevail.

Falling rents, a social yearning amongst those in their 20’s and 30’s and the fact that innovation or progress tends to be more successful in an environment of physical collegiality…….are some of the reasons which will bring people back to the office.

Although some regional centres and cities may prosper, it’s difficult to believe that great cities such as New York and London won’t bounce back.

The investment opportunities will then be in the re-valued property sector and the ancillary commercial real estate services such as Jones Lang LaSalle and OTIS Worldwide.

September 28, 2020

By Rob Zdravevski

rob@karriasset.com.au

Filed under Finance & Investment Tagged with , ,

What’s been missing in Oil & Gas?

September 26, 2020 Leave a comment

‘Innovation’ has been the most scarce thing in the oil and gas industry over the last 50 years.

That’s a long time to be doing things the same way and expecting a better result.

Oilfield services companies have curtailed and gazumped competitive technology which probably threatened their own staid practices.

It could be curtains for them when E&P companies cease pandering to these incumbent giants and accepting the continually woeful outcome of budget and project overruns.

And within the current market of uneconomic exploration and extraction, what if the E&P companies start using the competing software and technology available to create one of the most important advantages they could possibly yearn for…….

efficiencies

September 27, 2020
By Rob Zdravevski
rob@karriasset.com.au

Filed under Finance & Investment Tagged with , , ,

Retail investors on the wrong side of the trade

September 25, 2020 Leave a comment

There was little chance that the AAII Survey respondents would have turned bullish following the market declines seen over the past week.

My take on this contrarian indicator suggests higher stock prices, thus I added to positions the past few days.

See next post…..

September 25, 2020
by Rob Zdravevski
rob@karriasset.com.au

Filed under Finance & Investment

We’re only renting Gold

September 25, 2020 Leave a comment

But to be clear about today’s gold post, it is only a “trade”, that’s why I placed that reference, “it’s something to rent rather than own”.

I still think Gold still remains a marginal trade in the larger context as mentioned in these two previous posts.

Mean reversion and extremes above 200 day moving averages warrant attention.

https://lnkd.in/gK9hj-P

https://lnkd.in/gj3fJF8

September 25, 2020
by Rob Zdravevski
rob@karriasset.com.au

Filed under Finance & Investment Tagged with

The current Gold trade

September 25, 2020 Leave a comment

Gold needs to hold US$1,843….
if it doesn’t, US$1,795 is the next stop.

For now, probability of Gold staying above US$1,850 is increasing;
the AUDUSD is holding 0.7000,
and AUDJPY and Silver registered oversold readings overnight,
while Bitcoin is holding $10,100

On a daily basis, Gold and Silver moved 3 standard deviations below their mean, which coincides with the aforementioned oversold readings.

So, “long” Gold (or a proxy Gold equity) at the current US$1,863 (cash market) is to be treated as a “trade” pending supports being broken.

In other words, it’s something to rent rather than own.

n.b. if Gold trades to $1,795 the AUDUSD should then be around 0.6835.

September 25, 2020
by Rob Zdravevski
rob@karriasset.com.au

Filed under Finance & Investment Tagged with

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