Archive for category Uncategorized
Feeling The Direction of The Wind
Posted by blodmell in Uncategorized on February 5th, 2012
The world was preparing for death by a thousand cuts for 2012 only a month ago. Here we are after a bizarrely fast rally all over the world. I just finished reading Foreign Affairs this Sunday morning. What defined the issue other than the case for bombing Iran as the least worse option was the general optimism. Gideon Rose reminded us what relative peace and prosperity we live in while the editors seem to think that all this clashing of ideas isn’t going to be so bad afterall?
The theme that I keep coming back to is that we are in a world where emerging markets are the future. Even the Western minded Council on Foreign Affairs and Economist mag are coming to that conclusion. The Foreign Minister of Australia, Asia’s only Anglo Saxon/Western bastion, announced Europe’s “early grave”.
The point is that the global economy probably has more legs in it than ever and we are simply confused by the changing landscape.
It takes the long view to survive the volatility though…
Our Brazilian Steelmakers Are Oversold
Posted by blodmell in Uncategorized on October 19th, 2011
Ive been watching the news carefully regarding our Brazilians such as Gerdau and Companhia Siderugica Nacional SID. The markets have been too pessimisitic about them and dont forget they are some of the best dividend paying stocks around.
Build on these cheap prices.
Europe
Posted by blodmell in Uncategorized on September 18th, 2011
Common sense must be king with respect to Europe. I mentioned in the last blog that “Europe” and the broader crisis that word has become for global financial markets and “China tightening fears” continue to headline the fear element. Europe seems to have emerged as the number one fear and the unthinkable, the dissolution of the EMU, is now thinkable. Again, common sense has to guide us to the answer. Will it be in Germany’s interest to allow the collapse? What will cost more, Union or Disunion? AS the Economist magazine noted in their leader, Merkel has to spell out to the German people.
Let’s See If September Can Sustain A “Risk Rally”
Posted by blodmell in Uncategorized on September 2nd, 2011
I am posting less these days. I feel like a movie reviewer who has to write about the same movie every day. Every government on earth took debt to spend out of the financial crisis of 2008 and interest rates in the developed world haven’t left zero. Emerging markets have experienced an aggressive rebound while interest rates have risen to tame the growth yet the two great fears (drum roll…..Europe debt cris/ drum roll…China tightening fears have caused sell off in EM equity prices, twice!
Some of our China stocks, like China Life are trading at three year lows? Go figure? We watched Geely Auto go from 2 to 5 back to 2 again? Go figure. The boring and highly profitable mining business of iron ore, dominated by Vale has been a gripping soap opera. Go figure?
Even Brazil has been a rollercoaster and the “Brasil story” never changed. Yesterday the Brasil central made a daring and enviable move to lower interest rates after having raised them all year. They manage their economy with the same grace and style as they samba.
They can’t get the job machine in the USA going and Merkel is struggling to keep the momentum politically to defend the most basic vision of the EU, monetary union.
I am still an optimist but many have good reason not to be. Two years ago I posted that these would be tricky years for investors. The risk free rate would disappear as it has and equities would be the domain in a world of low interest rates. Even I didn’t imagine the intensity of the volatility but I have always said that it isn’t hard to pick good assets. The key is your average price.
As Painful As It Is, Spend Free Cash To Build On Cheap Prices. Brazil Is Overselling
Posted by blodmell in Uncategorized on August 10th, 2011
This has been a stunning week and will likely have an ugly finish. The pendulum will also probably overswing with all the fear. This is exactly why we don’t get invested from the start, but it’s time to show courage and use cash to build. The crisis is political and not fundamentally economic. We are formally entering global equity bear territory. Assets are truly becoming cheap.
A General Client Update
Posted by blodmell in Uncategorized on May 11th, 2011
I have been off the blog for almost two weeks due to a business trip in the USA. I met with a lot of people and it was just another affirmation that the global economy is truly shifting towards emerging markets and China for future growth. I also sensed that a growing number of Americans are becoming aware of that fact and are opening up to the concept of placing assets in foreign institutions and beginning to diversify away from the USD and US securities. It’s not rocket science to perceive that the situation in the USA is unsustainable. It happened to be another rocky week but if you are down on positions then limit orders should be occasionally ticking off. I also think it is appropriate to get more invested if you are heavily in cash. More positive hard economic data came out of China today and they are lowering the inflation rate. Also, Europe’s monetary crisis is coming to a head and should find resolution after all the brinksmanship.
Please note page 8 in HSBC s report
http://www.hsbc.com/1/PA_1_1_S5/content/assets/investor_relations/strategy_day/2011/110511_strategy_day_gulliver.pdf
The biggest bank in Europe which is now headquartered in Hong Kong, HSBC, is throwing all of their weight towards emerging markets.
For Our Clients Whom Are Holding Chinese Carmakers…
Posted by blodmell in Uncategorized on April 17th, 2011
No country on earth has ever bought so many cars in so little time as China. Little surprise then that the Shanghai motor show, which opens on Thursday, has in a few short years become one the largest events in the motoring calendar.
Strictly a second-rate affair until a few years ago, Auto Shanghai has become the place to be for automakers scrambling for a piece of the world’s largest auto market.
Emerging Market Inflation Has Become The Focal Point Threat To the Global Economic Recovery
Posted by blodmell in Uncategorized on April 16th, 2011
This was the FT headliner. I live in an emerging market and inflation is for real. A lot of easy money was unleashed into the global economy and it is payback time. Data released on Friday showed a surge in Chinese and Indian inflation, highlighting the threat to the global economic recovery as emerging markets overheat and commodity prices rise. Consumer prices in China increased 5.4 per cent year-on-year in March – their biggest jump since July 2008.
Benjamin Reid Lodmell: I Am Beginning To Watch Global/Emerging/Frontier Market Small Caps
Posted by blodmell in Uncategorized on April 12th, 2011
Today was ugly. Japan is nagging. The markets fell all over the world even though we are up on the week. I know I sound like a broken, broken, broken record player….but hard economic data and corporate earnings (despite Alcoa´s disappointment today) are solid. We are recovering from the greatest economic setback since the depression!
I have been an advocate for the building blocks of the global economy since the collapse of 2008: Energy, Materials, Financials. As evil as the finacial sector may be, they have a quasi governmental role in the global economy: the financial nervous system. I think we are breaking out into a subtle expansion. The opportunity of the future lies with companies nobody is watching right now, emerging market small caps…or ¨global¨small caps. More later. These are thoughts from your money managers mind.
Just When Doubters Started Doubting The World’s Largest Bank
Posted by blodmell in Uncategorized on March 30th, 2011
Industrial & Commercial Bank of China (1398) Ltd., the world’s largest lender by market value, posted a 33 percent gain in fourth-quarter profit as wider loan margins allowed Chinese banks to overcome a slowdown in credit growth.
Net income climbed to 37.9 billion yuan ($5.8 billion) in the quarter ended Dec. 31, based on figures released by the Beijing-based bank today. That exceeded the 36.6 billion yuan average estimate of 19 analysts surveyed by Bloomberg.
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