Thursday, March 31, 2011

Marc Faber: QE26 will come - 30 March 2011

After QE18, it's now QE26 in a Bloomberg interview with Marc Faber where he talks about the outlook for a QE3 from the Federal Reserve, his investment strategy and the outlook for global stock and commodity markets.

Wednesday, March 30, 2011

Jim Rogers Bought Japanese Stocks - 30 March 2011

Interview of Jim rogers on CNBC on 30th of March 2011, where he explains he bought Japanese stocks (mainly the index actually) this week and last week.

My Take: After Marc Faber and Mish Shedlock, Jim Rogers is also bullish on Japanese equities, probably a good way to convert his Yen holdings. After a 20-year bear market, relatively good valuations (PE: 15, PBV: 1), the next bull market in Japan may start soon although there are bad economic fundamentals such as a declining population and huge government debt. If you want to invest in Japan, you can do so via EWJ‎ (iShares MSCI Japan Index) in the US, 2814.HK in Hong Kong or FEDERAL INDICIEL JAPON P (FR0000987968) in France.

In the second part of the interview, he was asked about nuclear power which he believes will recover over time (several year) since we need nuclear power to replace oil and natural gas. He's also very bullish on oil due to declining reserves.
Concerning investing in Uranium, he is not rushing, but he's watching and may step in later on.

In the last and third part of the interview, they focus on Argentina with Slim Feriani who is very bullish on it, but Jim Rogers does not buy it at all even though Argentina has a lot of agriculture commodities.

Finally, he's also said he bought a bit of silver and gold last week, which surprised me since he generally does not buy at all time (or decades) high.

Sunday, March 27, 2011

Peak Oil: Interview with Colin Campbell - February 2011

Peak Oil will be one of the main issues of this decade, and although likely to be volatile due to more frequent recession, how high the price of oil will go will probably to surprise most people, maybe including myself.

Colin Campbell is a retired petroleum geologist who is an expert on peak oil.
He has been interviewed in February 2011, see the four parts video below for his insights on peak oil and the consequences it may have.

If you plan to invest in crude oil, avoid most ETF such as USO or UCO based on crude oil futures as those have terrible long term performance due to contango.

RJI (ELEMENTS Rogers Intl Commodity ETN) is much better to follow the price of oil, although it only has 40% invest in crude oil (WTI and Brent) and the rest being industrial commodities, precious metals and agriculture commodities.

Another way is to invest in company in the oil sector which can be done via OIH ETF which tracks the performance of the 18th largest oil companies in the world. The main risk here is that those company will not be able to increase their reserves and it may spook the market, even if the price of oil goes up.

It may not be the best timing to invest in oil at the moment, since high oil price usually trigger a recession, but longer term it should perform relatively well.

Friday, March 25, 2011

Marc Faber: Accumulate Japanese Stocks, Buy Gold on Dips

Interview with Marc Faber on the 24th of march 2011 on Fox Business News.
He's negative on Japanese bonds, that should push money into Japanese Equities.
However, He expect a significant correction in world markets in Q2 2011 and a rebound for the US dollar and treasuries.

He also sees some weakness in precious metals in the short term, but recommend to accumulate gold in case of weakness.

Thursday, March 24, 2011

China's Ghost Cities and Malls

SBS Dateline has a very interesting documentary about the Chinese real estate, the ghost cities to several part of china, the in-famous Dongguan mall (largest in the world) which is virtually empty, the ridiculous price of real estate that can not be possibly purchased by working people, and is only used as a store of value for the rich.

There are currently 64 millions vacant apartments in China where 160 millions people could live (assuming 2.5 persons / flat). Jim Chanos also previously said there is enough planned commercial real estate to provide a cubicle for every Chinese citizen.

Since China's real estate is not highly leveraged (50% down-payment requirements), there may not be a large collapse as in the U.S.A, but it's quite possible the number of transactions decrease dramatically, as sellers don't want to sell at loss and buyers do not want to over pay.

How can we take advantage of the coming real estate bubble burst in China?
First, the timing is very uncertain, as the Chinese government may be able to keep the game going for quite a while, so we'd have to find a financial product that does not decay over time.

One of the best way to invest in this is to short commodities themselves, commodities producers stocks and country index heavily relying on commodities such as Australia or Canada.

For most investors (including myself), it's quite difficult (and not really recommended) to short stocks and commodities. However, there are some short ETF leveraged or not. Please bear in mind that some ETF are not well structured and may make you lose money even if the underlying decreases in value (more on that in another blog entry).

Here's some ETF ideas to take advantage of the burst of the real estate bubble in China (I have not studied those in details, they are just starting points):

* PowerShares DB Commodity Dble Short ETN (DEE) - To short commodities. (Warning !!! It's leveraged) -
* ProShares UltraShort DJ-AIG Commodity ETF (CMD) - To short commodities. (Warning!!! it's leveraged) -
* PowerShares DB Commodity Short ETN (DDP) - To short commodities - non leveraged -

Usually for short ETF, I wait for a few years to have an history to see how well they track the underlying index, as some as just going to go to zero (by design or incompetence).

I could not find any ETF to short Australian and/or Canadian stock indices.

Wednesday, March 23, 2011

Jim Rogers: This could be the dollar end game

Interview with Jim Rogers on Yahoo Breakout where he talks about Japan and possible opportunities although he's just watching for now. Currency wise, he thinks about selling his yen holdings (on of his largest position) and consider buying the dollar unless it goes down much further as it could be the beginning of the dollar crisis. He also notes that the dollar ought to go up with the middle east / north africa turmoil, but it does not. Finally Jim Rogers also stated his views on Silver and Gold which he plans to buy on dips, especially silver.


Tuesday, March 22, 2011

Jim Rogers: Close the Federal Reserve!

Interview of Jim Rogers on Yahoo Breakout (new financial show) on the federal reserve, what he thinks about it and what he would do about it. He also said he plans to short US treasuries and that earnings margins are stretched and poised to fall. He's still short the Nasdaq via ETFs and emerging markets.

Tuesday, March 15, 2011

Marc Faber: QE18 and World War 3

Marc Faber discusses about the stock market, commodities and his outlook on Japan (stock and the Yen) about the tsunami and nuclear scare. He also mention QE3, QE4, QE5, QE6, QE7 (pick you number)... will follow and World War III is around the corner.

He's still bullish on Oil whereas the economy continues to grow or if a world recession kicks in.

If you want to invest in Japan stocks you could do so via EWJ ETF (US), 2418:HK ETF in Hong Kong and mutual funds such as FEDERAL INDICIEL JAPON P (FR0000987968).

Thursday, March 10, 2011

Has a top occured in Silver ?

Silver has had quite a run especially since it's breakout last September and is up over 100% since that time. As long as we have negative real interest rates I do not really worry about the long term trend for silver. However, in the short term, silver had just hit to top of its recent ascending channel, the RSI 14 indicates it is oversold, and the RSI14 has not been in an oversold position since February 2010, although it was close to be during January 2011 correction. (See SLV ETF chart below, Source:

So unless we are right now in the final stage of silver bull market, we could expect a short term correction of silver to the lower band of the ascending channel close to 30 USD. I

Marc Faber: if the financial system collapses, you do not want to be in cash and bonds

Marc Faber interview on CNN on the 9th of March 2011.
In a doomsday scenario, avoid cash and bonds, but be invested in equities, precious metals, commodities and countryside real estate. They may go down in value, but at least you'll still have something.