The recent news on the retail sales on the Black Friday, deemed by most analysts to be the most important indicator of the sector for the whole year, advanced by 0.5% versus last year (2008),according to ShopperTrak RCT Corp. Should this be enough to lift the retail stocks?
A simple search on this title over any search engine will show you the true power of the concept – there are 118,000 results only on Google. I don’t know if this because of the “Dummies” franchise or because of the number of traders willing to learn the ropes of the field. Certainly there is an incredibly high demand for this title and the reasons are simple – the demand for online currency trading is surging.
The recent news that Dubai suspended the repayment of its $59 billion debt sent shockwaves through the markets. Some shockwaves were expected, others came completely out of the blue.
In the first category there are the news of the spreads widening. In the second enter the appreciation of the yen, completely unexpected. Nobody was thinking that the panic will make the yen become what it was once – a safe haven for the investors. Yet, the yen continues to trade higher and higher.
The main resource of Dubai was the oil. And the government from Dubai has to repay somehow their debts. Even in the case of default, they must repay at least partially those bonds. It means that the Dubai sovereign funds and the Dubai asset owners must pump more oil to sell on the global market.
There is a lot of debate whether the oil will come back or not to the levels from 2008 (mostly May and June levels, where it reached a peak of $140/barrel. Since then, it continued to drop until February 2009, since it started again to grow. This time, in a much slower manner.
It is true that the recent economical news are slightly better than the previous ones. The US GDP has decreased in quarter 3within the economists expectations. The important word here is “decreased”. And the S&P 500 companies have seen a small recovery. Yet, I think we are several months from the economic recovery whcih could turn recession into a growth trend.
And of course, there is a debate of whether oil prices will anticipate these oil price increases or whether it will go down further, before it picks up.
The truth is that is a really tricky question. Why is that? First of all GE is one of the largest companies in the world, and to foresee its direction with precision is slightly impossible (to use kind words). It is such a big company, that probably not even their own directors have an exact idea of where it is going to head for the next 6-12 months…
Yet, the analysts remain convinced that the current share price ($16.1/share) might go even upper in the incoming weeks. Some analysts mention $17 share, others even recommend entering long positions with GE since a recovery will come sometimes for GE.
The analysts point at its strong rating (AAA-), at its strong profit margin (9.54%) and its strong ROE (16.4%) for 2008. Impressive indeed. What those analysts ignore that those financial parameters went down substantially in 2009 and that no one knows when and how much will they turn around. It might seem logical, but my opinion is that most of the analysts are ignoring the simple truth that a crisis recovery takes 1.5 to 2 times longer than the plunge. And we have just seen the first signs of the recovery, but…
Technical analysis is one of my passions, so here we go with another recent release of a book focusing on that topic. Given the recent advent of the online trading platforms (e.g the MetaTrade 4 or MT), trading has ecome much easier than a few years ago. In the same time, it has become also much more dangerous, since the easiness of trading is simply translated into a greater risk for the trader. And risk means the possibility to have huge profits in a short time, but also the possibility to be wiped out from the market very quickly. Being wiped out from a trading platform means loosing all the money you deposited as a leverage (your trading capital, of course).
One interesting question was asked by the Forbes panel yesterday:
“What does the recent jump in the unemployment rate (to 10,2%, as reported by the US Bureau of Statistics) mean for the recent college graduates and others entering the job market for the first time in this employment climate? What would you counsel them?”
It is a provocative question, since we live in a challenging economic environment. And it looks quite difficult to be optimistic when the US companies continue to reduce their payrolls by limiting the number of the new employees and reducing those with the lowest company service years.
Yet, the crisis would not last forever. Yes, this is my first advice, similar to the Bible adagio - “Be always ready.” The turnaround is closer than you might think. 6 months might look like an eternity when you are unemployed and have very slim chances to get your dream job, yet these months might pass very quickly. And the best you can do is to prepare yourself.
How?
Why not a blogroll? Why didn’t we post a sidebar laterally on our investing blog, with all the investing links we considered interesting?
Well, first of all because this would be definitely too long. We at doitinvest.com read lots of investing blogs. And we are very human after all - we have opinions on these, of course. Here we go with some of the most popular blogs we watch constantly, as well as with some comments on them.
The blogs are not in any particular order or ranking. We posted them here as they crossed our minds.
Below you will find some of the more interesting investment oriented blogs from the wonderful virtual kingdom we all live in more and more. We can’t guarantee their results on your investing portfolio - but we can tell you that they are good at distilling the barrage of daily financial information. Sometimes, you could even have some fun with these. And sometimes you can make some money. Too bad that we do not know which comes when.
Today the Kraft CEO Irene Rosenfeld refused to raise the $ 16.4 billion bar for their offer of Cadbury, as the latest releases showed. Instead, they preffered to go with the offer directly to the shareholders.
Why is this called a “hostile bid”? Well, it is easy - the hostile bid, by definition, goes around the existing board of directors (i.e. without their official approval) and tempts the shareholders directly.
