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Tuesday 31 January 2012

Trading Blog Update

Trading Blog Update

Although the purpose of this trading blog isn’t to have people buy everything I’m bullish on and sell everything I’m bearish on, many seem to find it useful to keep track of what an author’s trading views are at that time. Therefore I always try to list a couple of things I’m buying or selling at the moment (or looking to be), but I try not to include size of positions, risk element, profit expectations etc – just a broad overview to be taken as hearsay and nothing more. Regardless, I thought it might be good to take a quick look back and see how some of the early calls have gone, and where they might be heading:

Monday 23 January 2012

Silver Price - Boom or Bust?

Trading Silver – Boom or Bust?

The price of silver has been unusually volatile this last year, with some calling for the bubble to collapse and others predicting silver prices to reach $50 per troy ounce in the medium term. My mood is certainly more silver than gold this week (with bronze being the only worse alternative), so please excuse my complete lack of humour, but hopefully my focus remains intact.


Tuesday 17 January 2012

Copper Price Signalling Growth


Copper Signalling Growth Ahead

Copper prices are often seen as a leading indicator of global growth, not dissimilar from the relationship between partner and Christmas which states that the earlier your partner asks what you’re getting them for Christmas, the bigger present they expect on the day. If you fudged the latter, don’t ignore current copper prices and read on.

Friday 13 January 2012

Forex Trading - USDJPY

Trading Forex Pairs

Never before has it been such a blessing to be trading forex pairs that rely so heavily upon their fundamentals. Whilst the Euro and USD are whipsawing with every conflicting news/spin story, the Japanese Yen is maintaining its safe haven status, and its economic fundamentals show no signs of changing anytime soon. European politicians are still making my goldfish look intelligent – politicians are swimming in circles without realising the solution (food) is right in front of them – but then again my fish doesn’t face the fear of being voted out of its tank. Though not directly related, I think John Cleese’s piece early last year summed it up perfectly: http://marionvalentine66.wordpress.com/2011/01/23/new-european-terrorist-alerts-by-john-cleese/. Completely politically incorrect, and therefore well worth a read.

Monday 9 January 2012

Hedging your Mortgage Rate


Can you hedge your mortgage rate?

So you’ve gone for the floating mortgage rate. Seems cheaper at the time, right? In Australia, floating mortgage rates are around 6.6% and 7.6% for a fixed mortgage rate. Over in the US, the mortgage rates are more like 2.6% for a floating mortgage rate and 3.6% for a fixed mortgage rate. Firstly, yes us Australians appear to get a raw deal, and should move overseas. Everything about the cost of living in America has convinced me of that. But secondly, it doesn’t take long (potentially just a few months) for your new floating mortgage rate to be equal to the fixed mortgage rate when you originally signed up.

Friday 6 January 2012

Bank of America vs. Commonwealth Bank

Bank of America vs. Commonwealth Bank

In the US, Bank of America (BAC) and its friends have struggled. Only recently has it emerged that the retail side of their operations is performing better amidst struggling trading revenue, but stock prices are still down over 50% from their 52 week high. These banks are high growth stocks, if you pick them up in 2008 at the right price, and therefore Bank of America is paying a measly 0.01 cent dividend. No guarantees, just a rollercoaster ride into rags or riches.

Tuesday 3 January 2012

Gold Miners vs. Gold Price

Gold Miners vs. Gold Price

Recently I had the choice of buying a new mobile phone, and being a trend follower, I came to the logical decision between a Blackberry and an iPhone. A year on I can’t help but notice how overpriced the former was considering the functionality, reliability and versatility of the other option, according to those who chose the iPhone anyway (and my Blackberry experiences). RIM are undoubtedly losing market share to Apple, and in hindsight the RIM team do seem to be pricing to a high end consumer that has since defected to a superior product.

Gold miners and the spot gold price are bearing a similar, yet totally opposite resemblance to this analogy, as the ratio of gold price : gold stocks price has risen over the course of the year. Gold miners are pricing in a low gold price that hasn’t existed in two years, and unlike RIM smartphones, are seriously undervalued. The two picks of the Australian equities are undoubtedly Newcrest (NCM, down 22% for 2011) followed by Kingsgate (KCN, down 43% for 2011), and overseas Newmont (NYSE NEM, flat) and select gold stock ETF’s also offer value in comparison with gold’s 16% increase over the same period.