INFLATION FEARS SLAM CHINESE STOCKS AGAIN

16 November 2010 by TPC 2 Comments

The Shanghai Composite is adding to last Friday’s -5.2% debacle after further fears of inflation and government intervention roiled the markets. ?Shanghai stocks lost -4% with heavy losses in the banking sector and commodities. ?The Shanghai Composite is now down -7.7% in the last week and -11.7% ytd.

Via Trade The News:

- (CH) Former PBoC advisor Fan Gang: China inflation is being imported; China policy makers will take action on inflation, policy makers are mulling more steps to cool prices and they can use interest rates or quantitative measures
- (CH) China top planning agency National Development and Reform Commission (NDRC) to introduce price limits and subsidies for shoppers to help curb food inflation pressure – China Securities Journal
- (CH) PBoC Gov Zhou: China will push forward with interest rate reforms; Economy moving in line with govt expectations

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CHINESE STOCKS GET SLAMMED -5%+ ON RATE HIKE FEARS

12 November 2010 by TPC 5 Comments

The Shanghai Composite declined -5%+ overnight on fears that the PBoC has fallen behind the curve in containing inflation.? Rumors of a sizable rate hike are spreading.? Yesterday’s 4.4% inflation print showed an alarming increase in the inflation rate. Reuters reports:

“With Chinese inflation jumping to 4.4 percent and liquidity also swelling, there is growing concern that Beijing has fallen behind the curve in tamping down on price pressures and will have to crank up the intensity of its monetary tightening.

Goldman Sachs said in a client note on Friday that Chinese stocks had lost their near-term “risk and reward appeal”, as Beijing looks set to roll out more tightening measures.”

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BARTON BIGGS: STOCKS TO RALLY 10% AFTER QE2 ANNOUNCEMENT

31 October 2010 by TPC 2 Comments

While the conventional wisdom appears to be that stocks will sell-off after the FOMC announcement this week Traxis Partners founder Barton Biggs believes stocks will likely do exactly the opposite.? He says equities are likely to rally another 10% following the news:

Source: Bloomberg TV

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FAVORITE EVALUATION METRIC BUFFET: STOCKS ARE SLIGHTLY EXPENSIVE

Warren Buffett has been famous swale in the late 90′s and came to be very optimistic at some more opportune moment to buy shares.? Investor most famous world claims to have any capacity to market timing but still manages transactions outstanding stocks are severely depressed.? His latest ventures Burlington Northern and Goldman Sachs are two notable shopping crisis which, in retrospect, appear as the remarkable case of market timing.

In a fortune magazine famous article in 2001 Buffett revealed its assessment market favorite metric and showed why he was downward late 90′s and distributed on the rise at the time of this writing (which proved prescient new evidence):

"On a macro basis, quantification has to be complicated at all." Here is an array, starting with almost 80 years ago and really fundamental in what he said. The chart shows the market value of all securities traded as a percentage of the business-that is, as a percentage of GDP. The report has some limitations to tell you what you need to know.However, it is probably the best single measurement where the evaluations are all moment.Et as you can see, almost two years ago the ratio reached an unprecedented level. Which ought to be a warning signal very hard.

For investors to acquire an asset at a rate that exceeds growth in U.S. companies, the relationship chart percentage line should keep going until and plus.Si the GNP will increase by 5% per year and you want to get market values up to 10%, you have line go directly on the upper part of the graph.It won't happen.? ?

? Buffet prepared index explaining that stocks are good procurement ratio decreased to 70-80%:?

"For me, the message of this chart is as follows: If the percentage relationship lies in the region of 70% or 80%, the purchase of stocks is likely to work very well for vous.Si ratio 200% warning in 1999 and 2000 - part you play with fire."

The last recession also shows why Buffett could have done with these calls fat in the latter part of 2008 and 2009. The ratio declined to the desired 70-80% that Buffett described in 2001. Since then, he has soared higher and currently sits at 105% - just a bit overrated. Of course, as we have seen in the late 90′s and during the housing boom assessments can become extremely stretched, however, the lesson of recent occurrences is this future risk adjusted returns tend to be poor, when the report is at levels.

After 100% reading in 1997 you extraordinary known 3 years on the market before the collapsed the Nasdaq bubble and evaluations stagnated. Finally, for the ten years that followed your average annual statement equalled + 5.31%. If you held until now an average of + 2.31% per year. Since the crossing 100% mark in 2006 S & P 500 returned an average of-1. 53%.Of course, while long-term yields were less stellar, period of 2006 and the period of 1997 show that markets can be seriously overstated before correction.This probably means that long-term yields are likely to be lower than the average for the investors who buy now, however, speculative fever can reward investors in the short term.

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The contents of this site is provided as general information only and should not be construed as investment advice.All content on the site should not be interpreted as a recommendation to buy or sell any security or financial product, or participate in any particular strategy of trade or investment.The ideas expressed on this site are solely the opinions of the authors and do not necessarily represent the views of the companies affiliated to the author (s).The opinions of the authors of the guest or contributors and will differ from those of Mr. Roche.Ces views do not necessarily represent views or Mr. Roche.Les authors investment decisions can or may not have a position in any security referenced herein are or may not ask to do business with one another or companies referred to by this site Web.Toute action you take information and analysis on this site is your responsabilité.Consultez ultimately your advisor placement before taking an investment decision.

A short note on the comments-the increase in users of recent months has led to increased improductifs.Tout user who engages in the use of racial epithets or uses the comment section as a place to insult other users is prohibited on the comments section site.La feedback is welcome to all readers interested in relevant questions and engage in a thoughtful, intelligent discussion and brief productive.En, just be agréable.Merci.

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