Archive for Stocks

What is going on?

Looking at the status of the G20 economies, one might say nothing works. Keynesianism taken extreme has led to negative interest rates, moderate unemployment and no growth. Neo-liberalism generated uncontrolled banks, opinionated leadership and polarization of welfare. Trickle down economics do not work at all, especially if we look at the African or the Latam economics. Even the Chinese market-oriented communism is crumbling here and there. So now what?

Apple Stock Should Rise with the Ipad Mini – But How Much?

Yes, this is the question. At every new product launch, the Apple stock rises almost automatically in anticipation to the future earnings. In this respect, Apple exhibits something quite close to the perfect market hypothesis – data about future earnings should be incorporated into the stock price at the time of the announcement.
The question is thus not how much will the apple stock rise in the incoming weeks, but how much. In fact, if you make it right, you could do a fortune. Most of the equity analysts are battling and scratching their heads for this question – what will be the impact of the Ipad mini launch into the stock price?
Let us try to do a small calculation here:
Between the launch announcement of the first Ipad (January 27, 2010) and the first sales hitting the stores (typically first two weeks of sales, starting with April 3rd, 2010) the Apple shares rose from $208 to $259 (24.5%). At 4 million units as the first Ipad was to be sold, the impact of each IPad into the 904 million shares was at the time $15 billion (assuming a 1/3rd impact of Ipad from the total results).
The Ipad 2 story is somehow different, in a sense that the market has anticipated the launch of the second Ipad in March and the Apple share price has increased in advance with approximately 30 USD.Following the same logic of calculation, Apple had an IPad 2 impact in its share growth of around 10 billion USD. Again, Ipad 3rd generation had again a stock impact of $15 billion USD. Calculations are shown below: Read more

European Crisis – August is a Moment of Respiro?

As promised earlier on our investment blog, I am coming back to the periodical analysis of the European crisis. These weeks’ radio silence is quite strange – let me explain why: at the end of July 2012 there was a loot of noise about Greece (complaining they are not able to meet the new deficit and financing targets anyway – PASHOK source) and Italy (where some regions from South were stating that they are broke). Now there was nothing new about these two countries and these weak points on their geographies. It was known since 2010 that Greece will have a very hard time to meet any financing commitments, whilst the south of Italy was never a model of public excedents in terms of budgets (especially if you look at their taxes collection history and habits). But the noise surrounding these events caused the major European stock exchanges to have mini-strokes again, whilst even some rating agencies threatened the all-mighty Germany with downgrading their ratings (based on its exposure to these two countries).
Now it is quiet on all media fronts. So quiet, that you can hear a Euro coin falling from Berlin to Athens. Could be that all politicians are on holidays – or could be that the speculating bankers are on holidays or thinking about new ways to profit from this. Either way, for me this silence is not good. So I would actually take advantage of this respiro moment to revise my investing priorities. What do you think?

Salaries in Investment Banking – Investment Analysts

frankfurt-river-bank-scenery-with-skyscrappers-may-2011-courtesy-of-wwwrecenziaro-2 Here we have compiled a short list of what an investment banker can expoect to be paid depending on the seniority and the experience.

As a general remark, 2011 is seeing a return to normal levels of pay (before crisis, id est to 2007-2008 level). This doesn’t mean unrealistic expectations from your side, but rather a coming back to normal.

As a general rule, the starting salaries for a junior investment banker range from $90,000 to $150,000. These salaries are paid usually in US by the large investment banks who operate there (salaries in Europe will be at 70-80% usually, translated in Euros at spot rate – if you can read this you can do the maths). Bonuses range from 10% to 80% and are included in the above figures anyhow. Lately the banks are trying to pay less cash and move more to offering share options even to the newcomers. This might not be a bad move – as Harvey McKay said, “it is better to own 1% of something than to control 100% of it). Read more

Tech Bubble Bursting or Still Ongoing?

yandex-image-and-logo-courtesy-of-the-investment-blog-doitinvestcom Just as we discussed about the LinkedIn IPO, another piece of news hits the shelves of Internet. Yandex, Russia’s largest search enngine (and often compared to Google), entered the NASDAQ market. Yandex is not the first but still an important player on the latest string of internet companies listed in the US. The price of Yandex’s shares has increased with 50% in the first day of trading., which is good news. However, the signals of the stock markets are mixed: for example RenRen, the Chinese Facebook, now trades for less than the issue price, which means that some speculative activity was at play during the initial listing.
Yandex is not quite a child company. In March 2011, the yandex.ru website attracted 38.3 million unique visitors. It also has a 64% market share of all the Russia searches, which is quite impressive. However, the share is declining, as Google and Yahoo are bidding aggressively to enter that market.
The Yandex technology is a bit older than its competitors and dates from 1989-1990, when Yandex technology was first developed in partnership with the language experts from the Academy of Sciences as
a search system for the government of the Soviet Union. Since then, it has aggressively expanded to become one of the largest search engines in the world, with an algorithm quite different from its US counterparts.

Book Review – “Trade the Trader” by Quint Tatro

Trade the trader book review by www.doitinvest.comOne more book about trading various financial assets… Shouldn’t the world be tired about these?

I guess not. Trading is a financial knowledge field which advances at a blistering pace, not only technologically, but also behaviorally. Take for example the way the introduction of the Ipad has changed the trading behavior of the masses – now you can research, plan and place your orders online, straight from your morning coffee table. Isn’t this brave new world wonderful?

Yes it is my friends. But it is also dramatically different from one year ago. Think about it a little – how many traders are now online compared with 5 years ago? (this means increased competition, right?) How many tools are you using today compared with one year previously? How did the playing field changed?

Read more

Tech Giants War – Google vs Apple

Yesterday a piece of news from the Wall Street Journal hit the markets – Google intends to launch a tablet simillar to the Apple IPad as functionalities. And of course, its stock increased a bit.
Whilst this is good news for Google and bad news for Apple, I wonder why people are surprised at the news. After all, Google is the larges internet player on the planet Earth and it should go on that direction. What surprises me is why Google is trying to launch such a device so late…
…which brings my thoughts to the idea that in gadget terms, Google is an Apple follower. But not in the bad sense of the word. Surprisingly enough, Google might have the ability to take a newly launched product and make it better than its no.1 competitors. It is the old strategy of the largest FMCG producer in the World, Procter & Gamble. But whilst |P&G does this since forever and has some associated risks, Google seems to have found a nice recipy to overcome the issues. Read more