Investor Market News

Gold surging with economic uncertainty in sight

2011-08-22T13:24:00.000+05:30

Gold is rapidly rising breaking new records, with so much uncertainty in the US economy and European debt issue. With big economies like Spain, France and Italy facing the debt problem entering their countries, and European leaders especially German Chancellor Angella Merckel and French President Nicholas Sarkozy holding meet to come to decision.

Investors are finding safety in gold and yen for their safe haven qualities and equities are being sidelined. It can be said gold can reach $2500 an ounce by the end of the year if a solution to pull the US out of recession and bring Europe out of the debt crisis is not found.

New to Trading?

2011-05-16T12:58:00.004+05:30

New to Trading? Well well I have heard this question many many times, and the best answer for it is 'don't look far, internet is there to help you.' Four years back when I myself was a newbie, I started looking for courses online, since we did not have any centres close to where I live. I started hunting for websites which were user friendly and also gives you the hands-on practise of trading. I found quite a few good sites, but the one which stood out and the only one I stuck to was Gnutrade.com. It has a Learning Centre which is visually appealing and is easy to follow. It also negates the usual financial jargon, which totally goes over your head.

Most importantly they don't charge you for this. They also give you 10,000 worth of play money to simply practice with before even putting in your own money. They also replenish this amount if you run out of it. There are so many of my friends who still ask for play money and also trade with real money when they see that they are making profits with play money.

Since I am a senior player now and a bloody good one, I also get backed by other players, if I am making money. That is a feature I like the most, since if I win, I take a share out of the profit I made for the person who put money on me. So its a win-win situation. I hope those who read this article take some time out and go through this site and join them. Please also come back to me with your feedback on how you liked the site and how it benefitted you.

Till then HAPPY TRADING!!!!

La Nina, scarce cooking oil

2010-12-03T12:12:00.005+05:30

Cooking oil, an essential ingredient in world cooking, seems to near scarcity with the La Nina weather effect, where the temperatures drop or gets cooled. Many oil refineries around the world have shown drop in production, due to drought and heavy rains. Crops which are raw materials for oil like soya beans, sunflower etc have also suffered with weather changing drastically effecting production.

As demand for oil rises, China, one of the important importers may have to pay huge amount to acquire the seeds. According to Dorab Mistry, director of Godrej International Ltd, "The market is focused on Chinese monthly imports of beans. If the Chinese government releases State Reserves and they skip one month’s imports, it will have a bearish impact on prices in the short term.”

Low demand for sunflower oil and rapeseed oil also may raise demand and price for soya bean oil. I reckon cooking oil prices will eventually rise, cause: environmental changes.

China and India, Internet centres

2010-11-24T13:30:00.002+05:30

China is yet again trying to woo global internet lovers to invest in more techonology, as it launches its very own version of You Tube, claimed to be better and innovative than the former, called Youku.com. The company, Youku.com Inc which came up with this virtual product, predict the world is shifting and foreign companies will invest in China's innovation. According to a technology consultant, Duncan Clark, chairman of BDA China in Beijing, : "The Internet’s center of gravity is shifting toward China. China has almost double the number of U.S. Internet subscribers. That concentration matters.”

China with its strict censorship rules, has kept away gaints like Google, Skype,Msn and Yahoo, giving chinese local companies the opportunity to come up with their own products like QQ.

Now India is not far behind, with its own Ibibo.com and many more such sites catering to Indian internet users. There are many companies in India who are also developing applications like Android and Iphone for Foreign companies, which is a plus point when the US is still struggling with recession blues. China and India are where Japan was some years back, a bloom in technology. Way to go !!!

Managing employees in India

2010-11-17T15:22:00.004+05:30

For a Foreigner or a Non-resident Indian coming and working in a country like India can be very daunting. First there is huge difference in cultures along with conversing in correct English. When I was studying in the UK for a post-graduate degree, I used to work to earn a bit of extra money. I had four employers during my total stay in the UK, namely a brokerage firm, KFC, Phones4U and Gnutrade N.V. My experience there as an employee taught me to be self dependent, honest and motivating to others. In my last company, Gnutrade N.V., I showed interest towards bring the customer support wing of the company to India, since I planned to come back for good. The company was delighted that this was another way of outsourcing which will save them money.

Back in India, I was all geared up to open my own company, and bringing in more work for myself other than the work from the UK based company. It was time I employed a few people who could help me smoothen out the day to day activities. The point where I stand now and look behind, I see a few employees who were self obsessed, dishonest and the least motivating people I ever worked with. Presently 2 people work under me and only one of them is a dedicated person like me. Managing employees in India is a huge task where you not only have to do your own work, but also finish theirs too just to save your own ass. Many employees who have worked under me lacked confidence, imagination, creativity, will power and most of all the discipline at the work place.

I do not say that all Indians are the same, but if one is working in a professional arena, discipline, honesty and hard work form the most important part of a job, which many Indian employees lack. This is where managerial skills of the boss comes in, getting work done is a more challenging task.

A manager can only see success in his employees if:
- he himself is disciplined in checking how his employees work and correcting them when needed.
- Answerable to the manager from time to time keeps employees under check.
- Placing realistic goals for employees keeps them interested in their work.

I hope these pointers are useful to both managers and employees to be best at their work.

Short Selling in Hong Kong

2010-10-13T14:58:00.002+05:30

To start with let me educate my readers about 'Short Selling'. Short selling is a way of selling shares which the owner doesn't own still. The broker on behalf of the owner will buy or sell shares, and then it is upto the owner to keep it or close the trade, also called 'Covering'. The short selling is expensive for customers since they are charged interest on the Margin Balance accounts if they decide to hold any shares for long. So basically the customer has borrowed the shares from the broker and sold it and later you must pay back the broker any dividends or rights declared when holding the share loan.

Now coming to the news about Hong Kong topping the list of Short Sellers in Asia. According to a study by Data Explorers, a financing company, Hong Kong has taken over Japan's equities in short selling after banks, pensions and mutual funds reaped profits from loaning out Hong Kong shares. Investors are keen in investing in Chinese companies, showing a fading interest in Japan. The Singapore head of Asian regional strategy from the Royal Bank of Scotland Group Plc, Emil Wolter, thinks, :"As the Hong Kong market grows, there’s an increasing amount of activity that is not necessarily directional, like arbitrage, program trading and more complex trading strategies that are being put to work. Japan has been a market that’s been fading away for a long time and people are frustrated with it.”

It is good for Chinese companies and the economy as a whole for getting undivided attention from investors. Chinese companies are making moey for them and so investors are sticking to them.Lets hope short selling picks up like this India too.

(source: bloomberg.com & investopedia.com).

Investing wisely

2010-10-04T18:53:00.002+05:30

Recently I was watching a video on forbes.com, which featured billionaire Ron Baron who is also listed as number 306 among the Forbes 400 richest people in the world. In the interview, Ron said: 'save and invest, and invest and save, in small and mid cap companies and invest in businesses who believe in investing and saving'. He also asked not to judge people and businesses, and have faith in other's business and their foresight. 'Build a brand', is what Ron says. Building a brand is possible with repetitive advertising and also maintaining that brand. He thinks stocks are cheap now when compared to 12 years earlier, because people are afraid to invest. Bonds are also favorable long term investments according to him.

So if you decide to invest in long-term, tips from Ron Baron could be very useful.

Rupee symbol

2010-07-15T16:42:00.002+05:30

You must be wondering as to what the title means and the symbol above means, I'll tell u. India has joined the dollar, pound, euro and yen in coming up with a rupee symbol of it's own, designed by a post-graduate student from IIT, and chosen from around 3000 designs. According to the Information and broadcasting misiter of India, Ms. Ambika Soni, the government proposes to launch the symbol in India within 6 months and worldwide in 18-24 months. Common man will be able to use the symbol very soon on personal computers and laptops manufactured in India. It is a long wait for us Indians to join the big league of currencies and I am very happy for the currency and the country as a whole.

Can we actually see the warning signals?

2010-06-16T15:08:00.004+05:30

It has been sometime since I have written anything on my blog, and I appologize to my readers for not doing so. The thought which has been consuming me day in and day out was why did anybody not see the economic downfall signal? Or someone saw it but ignored it since it did not effect them........

The National Bureau of Economic Research in the US does study of the various business cycle peaks and trough to determine the economic health. The Center for International Business Cycle Research also in the US does coincident index study coinciding with the business cycle turns. The components it includes are industrial production, nonfarm employment, real personal income, total business sales in constant prices, GDP iin constant prices and the unemployment rate. (source: findarticles.com).

Next time I hope such signals are foreseen and appropriate measures are taken to avoid such catastrophic financial troubles. I also hope that situation improves, especially in Europe. European leaders are planning to sit down and chalk out stricter financial regulations in the upcoming G20 meet this month. A good outcome will result in Europe leaping back, if Greece stabilises that is.

BRIC the way to global economic health

2010-03-02T11:45:00.002+05:30

(source: http://totalgadha.com)

Like one of my earlier posts, I again stress here that developing countries will take the rest of the world out of recession and BRIC countries would be the ones to do it. BRIC stands for Brazil, Russia, India and China. There countries show promising future for any country or company ready to invest. An investor, Mark Mobius, Templeton Asset Management Ltd, wrote in a note on 1st March 2010, (according to bloomberg.com): "India’s macroeconomic fundamentals have significantly improved. The government has done a good job in managing the economy through the recent crisis and, unlike companies in the US and Europe, most companies have healthy balance sheets and strong cash flows.”

US consumer confidence fell

2010-02-25T16:53:00.001+05:30

(source: resources1.news.com.au)

Economic data from the US dragged equities lower this week. US consumer confidence data fell from 56.5 points to 46 according to Director of The Conference Board Consumer Research Center, Lynn Franco. Mr. Franco said: "Consumer Confidence, which had been improving over the past few months, declined sharply in February. Concerns about current business conditions and the job market pushed the Present Situation Index down to its lowest level in 27 years (Feb. 1983, 17.5). Consumers' short-term outlook also took a turn for the worse, with fewer consumers anticipating an improvement in business conditions and the job market over the next six months. Consumers also remain extremely pessimistic about their income prospects. This combination of earnings and job anxieties is likely to continue to curb spending."
(source: conference-board.org).

Federal Reserve raises discount rate

2010-02-22T00:18:00.002+05:30

Seems like the US Central bank is making efforts to put across the message to investors that the recession may be coming to a close by raising the discount rate for borrowing banks. But there is still uncertainty and fear in the markets, that just in case the the bank withdraws stimulus measures and other global Central banks may follow suit. Dan Greenhaus, chief economic strategist at Miller Tabak & Co. in New York ellaborated on Reserve Bank's move of lifitng discount rate,: "There’s no inflation for the Fed to fight. If easy monetary policy and supportive fiscal policy have helped boost equities thus far, data such as today’s CPI argues for a continuation of supportive policies.”

The US markets have seen week long gains, which have helped build investor confidence in the economy recovering. I just hope this trend continues and global markets take cues from rising US stocks.

Greece, Portugal and Spain in trouble.......... or may be not

2010-02-10T23:04:00.002+05:30

Well well seems like in Europe people are continuing to be horrified by yet another revelation that after UK's rising inflation, Greece has managed to put itself in a budget deficit. Portugal and Spain are following Greece very amicably.

No matter how much the Greek government tried to avoid interference by the European Union officials, it is inevitable to push away Germany from taking huge interest in Greece. Looks like Germany not only want to help build Greece's economy, but also inturn see itself getting more rich by tapping into the country's resources. There you go, Germany still continues to be greedy sans hitler. I just wish all the very best to Greece and the rest of the European Union countries who are yet to follow Greece's budget crisis.

Markets may rebound soon

2010-01-27T18:14:00.004+05:30

Markets globally do not seem to catch up with developments like China's stand on slowing down its economic accelaration and Obama's plan to lower pressure on taxpayers by stagnating some amount from the Federal spending for three years to be able to accumulate upto $250 bn in over 10 years. Hopefully these measures will help the economic hardships globally.

(image source:google.com)

China and India the new age developed countries - true or not?

2010-01-19T17:20:00.004+05:30

Hello again everyone, I am back again from the old year into the new, but I know I am 19 days late to start blogging again in the new year..... but I excuse myself by saying that I was awfully busy with my 13 month old daughter and ofcourse quite engrossed in the economic news enfolding all over the world.

The year started on a rather sombre state for the markets all over with bad fourth quarter earnings from JPMorgan Chase, but very good results from Intel Inc. This shows that technology shares have come back with a bang, and this may be possible because of huge collaborations these tech companies have with China and India.

It is a huge bonus to know that these two Asian countries have actually dragged the rest of the world (US) into the new year with some signs of economic recovery. China and India have shown a lot of promise on being able to increase exports as well as imports in various industries. They have made themselves self sufficient with manpower, brilliant minds (many Indians and Chinese working and living abroad have come back to their respective countries) and growing infrastructure. This alone is enough to change the face of these two countries in the next 10 years, changing from developing to developed countries.

I see these countries as good investment options as well for anyone who wants to look into the future. I have put my money on them and the question is who else hasn't? India and China will soon be called the two new developed nations of the world fighting to claim the number one spot. I wish both of them best of luck for this year.

Dragging out of the recession pit

2009-11-16T23:37:00.005+05:30

Voila!!!! do we hear everyone talking about the recession under control? Well when you think about it prudently, markets seem to jump and dive at every other good news or bad news. But the truth is far from what one thinks it to be. The market rallies when the US Federal Reserve keeps the interest rates near zero, then the markets drop when news trickles in about Central banks from various countries may withdraw stimulus packages. So it is very clear that markets are simply doing well most of the time just because the cash flow is continuing into the financial system to keep markets from falling and economies keeping a bold face in front of investors.

Lets hope a solution which solves the above two comes out quickly before Central banks run out of cash themselves!!!!!

Who is in more trouble - Europe, US or Asia?

2009-02-03T11:47:00.006+05:30

'Who is in more trouble?', well all 3 are and there are no exceptions and no continent can escape economic recession. It is like a huge chain, downfall of the housing market and dire unemployment in the US directly affected the European and Asian countries. That is why we see governments in all these continents have been coming up with stimulus packages to minimize the problem if not stop it.

According to Nader Naeimi, a Sydney based investment strategist with AMP Capital Investors, said: "These sorts of stimulus measures are steps in the right direction. We need circuit-breakers to unlock the credit logjam." (source: bloomberg.com).

Australia wants to be away from recession as hence the government announced $42 billion Australian Dollars more. But there is still pessimism floating in the market, like one Chief Asian economist at Credit Suisse Private Bank in Singapore, Joseph Tan said:"Stimulus measures will help minimize the downside to some degree in the short term. There’s always that shadow hanging down our heads. Jobs are still being lost, consumption is coming down and economies are falling." (source: bloomberg.com).

Hence, all economies are in trouble and are likely to come to the stage of recession at some point in the future and stimulus plans are going to give relief in the short-term and not long term. There are tough times ahead for all, so be prepared.

Is anything else precious than gold?

2009-01-30T17:13:00.003+05:30

Gold is a very good investment is what we hear all the time. But due to the volatility in the markets it is risky to trade with the precious metal on the live markets. It is safer to buy physical gold these days. Lesser demand from countries like India, China and the Middle East has also hampered the demand for the metal in recent days.

Volatile markets give investors the only option of buying physical gold since gold is seen as a hedge against inflation related risk. Some also believe that owning physical gold is a priviledge in times of recession and this was aptly quoted by Michael Pento, chief economist at Delta Global Advisors Inc. in California: "The government can print endless money, but they cannot increase the supply of gold. Anything the government cannot replicate by decree, I want to own.” (source: bloomberg.com).

Hence, at this time, gold is the best bet, but buy gold outright, trading in gold in open market is still very risky. All the best with your gold purchase.

Can the new US President save the country's economy?

2009-01-29T15:52:00.004+05:30

When it was time for the Bush administration to step down the whole world was jubilant especially the US citizens on the positive note that the new Presdient, Barack Obama will bring a change to the economic recession. But when we look at the bigger picture, there is more to the problem than what is seen. There are no jobs, people do not want to spend money anymore like before resulting in many businesses closing down, people do not have enough money to pay back their housing loans, many banks are on the verge of closing down, the list can go on.

The Obama administration is trying hard to convince that they can make a difference, example of which was the $825 billion stimulus package for banks being approved by the US House yesterday, There is more to do, like creating jobs so that the unemployed are sucked back into the system and also stabilizing the housing market.

This is a very long process and cannot be achieved in a year or two, it can take upto five years or even more for the economies to come back to normal. I just hope the new administration really makes an effort to resolve this issue unlike the Bush administration.

Bailout plans are they a neccessity or a conspiracy?

2008-10-17T17:20:00.004+05:30

Well every other country and even a sectors within countries and planning to bailout banks, airlines etc. After the US government came forward to bailout the US financial sector, European governments and in fact Central Banks all over the world have also come up with plans to rescue their respective big banks. In India, there are also plans to rescue the airline industry which is in doldrums.

The question is whether this is really neccessary that the governments are coming forawrd to do this with the tax payers money? If these governments really had so much spare money why did they not come forward to rescue Africa as a whole country, I am sure if they made an effort to do something Africa would have been above poverty line a long time back. Don't these countries have a little courtesy to atleast bring some stability in the African countries after taking away their resources like coal and diamonds to make themselves rich and wealthy?

I think these bail out plans are nothing but a huge chance for politicians to fill their pockets before leaving their postitions. And the so called bad assets which they claim to take over are nothing but wealthy businessmen who had falsely valued houses and taken huge loans against them, but in fact the houses or lands costed much lesser than what they claimed to be. This was widely done by many businessmen, taking the housing market down. So why are the governments saving them?

I think this is a huge conspiracy, when one government started doing it, other countries have also come forward with similar plans, no one knows how far this is going to last, but I am sure that it is going to get even worse in the next year.

Markets are nothing but a James Bond movie

2008-03-28T15:31:00.003+05:30

It is evident that financial markets are unstable and lack liquidity. No matter how hard the Federal Reserve tries to pump in cash in the banking sector, the U.S. dollar seems to be seeing a downward turn. When after a long drop dollar does go up for a single day investors rejoice thinking 'tomorrow never comes'. It certianly looks like a bond movie to me, James Bond- Reserve Bank trying to save the banking sector and the investors - the heroine, and the slowing economy (credit losses) - villian. The only problem in the real situation is that the rescue process may take as long as a year, that is if the markets recover on consumer confidence.Comments are welcome on what others think about this.

Liquidity problem still prevails

2008-03-20T15:52:00.007+05:30

Financial Markets are still facing liquidity problem. The U.S. Federal Reserve is trying it's best to maintain confidence among investors by cutting interest rates on the borrowing loans given to banks. Due to interest rate cuts government securities have risen giving a safe investment option compared to the volatile equity markets. Rising bonds have still not brought any respite to the weakening dollar, which has weakened against the euro, the yen and the pound. The fall in dollar price has effected the commodities too, at one time these were traded to hedge against equity risk but now the commodities cannot go any higher as a correction was going to happen and now it has. Oil and Gold are overvalued and they are bound to go down. Not a good time to buy gold. The Federal Reserve needs to come up with a very good plan to bring some confidence back into the markets. But one thing is sure that this credit loss crisis is far from getting over, it will continue in the next year too, unless there is a miracle.

Indices rise on Fed. cut news

2008-03-19T15:38:00.007+05:30

Markets in the U.S., Europe and Asia rose yesterday,18th March 2008, after news was going round that the Federal Reserve will cut the interest rates further on direct loans offered to banks. The markets witnessed a very good trading day showing an increase between 3 percent to 4 percent in the markets overall, showing some amount of confidence generated among the investors. Apart from this there were still concerns among investors that the credit loss crisis faced by banks is going to widen even more, discouraging people from taking home loans. The Manufacturing also slowed down a lot, effecting the industry and it's earnings. At one end the Federal Reserve is figthing hard to retain investor confidence by cutting interest rates and on the other end investors are loosing hope of any recovery in the credit loss situation, creating more liquidity problems in the market, which is lowering the dollar rate against the Euro, the Pound and the Yen, putting the pressure back on the Federal Reserve to come up with a concrete, effective and a permanent solution to the economic slowdown. It is very likely that the Federal Reserve may not be able to bail out all the banks during this year, it is very likely that this situation is going to continue in the next year also.

Markets on a roller coaster ride

2008-03-04T15:33:00.005+05:30

The markets yesterday saw both an upward and a downward turn. The european markets saw a very late rise in stocks after a rebound in the U.S. market shares.I feel that the markets are going to start at a higher rate and so a bullish ( market may rise) market is expected though if other experts are to be beleived the markets are going to take a bearish (market may fall) turn.The markets in the U.S. saw an upward trend with the commodities like gold and oil spurring into demand and overshadowing the losses in the techonology and financial shares.The U.S. and Europen success story was however not repeated on the Asian front. The mood all over the asian markets was that higher oil prices and expectations of them rising further will cause the rise in fuel costs eroding the profits. This was also evident in the indian market which lost aorund 900 points due to this piece of news even after a good budget 2008 given by the Finance Minister of India Mr. P. Chidambaram.I say markets will continue to be volatile, hold on to your stocks do not sell them, market may see some correction.

Top 10 Trading tips in Finance for Newbies:

2008-03-03T12:57:00.005+05:30

1. First and foremost tip is to keep aside a portion of your extra money if you decide to start trading, do not take out the amount from your savings ,for the simple
reason that in case you loose you cannot retreive the lost amount.

2.Research and research on the best stocks if you are interested to trade in stocks of companies you could trade on, look at their Payout ratio, Past peformances by
looking at their Profit and Loss and Balance Sheet statements( this informaton can be gathered from Financial Times Company Statements service or request this information from the company website directly).Also it is safer to put money on Small-capital and
Mid-capital companies rather than on Large-capital companies.

3. Now the trend is to trade online , so look for good websites who teach newbies like you about what and how to trade. There are sites who are dedicated to only teach and some who not only allow users to try out their site for free but also teach them through their learning centre.

4. Become active on different forums and blogs where investors communicate with each daily, this will not only keep you updated with the latest financial news but also
you will make new and long lasting business contacts.

5. If you do not want to risk on stocks , then opt for a website which deals with indicies or commodities or currencies as a whole or intra-day trading or index or stock trading, for example if you comfortable to
trade on forex look for such sites.

6. Always keep in mind to look for new and innovative methods to trade online, do not miss an oportunity to try out something new (as long as they offer service that is).

7. Make sure you cash in any profits made while trading,just in case the website vanishes with your profits ( this happens rarely but it is better to be cautious from the start).

8. Follow your trades everyday since markets are unpredictable and you never know a when a winning trade is turning around into a horrifying one.

9. The other important aspect is to use your profits made in investing into other avenues of investment like real estate, this ensures that your money is put to use somewhere and not used to trade only. This way you will have a varied personal portfolio, distributing the risk and maximising the profits in an effeciant manner.

10. Lastly, keep in mind that income generated from trading is taxable income,check the income tax rules of your country to be able to understand the way your
income will be taxed.