John Manley is a professional trader and portfolio manager at Market Evolution Strategies. His talk was called "Market Evolution Strategies - the Holy Grail Approach". He says we get too much noise via opinions and forecasts. We get too much info that is mostly useless. Other people's opinions should not affect you.
There are three types of analysis, fundamental analysis, technical analysis and mental analysis. We should get rid of our emotions and biases. We are looking for validation of our own opinion and we should not be. Winning and losing affects your thinking (your ego) and we need to stop this. We have fears of losing, of leaving money on the table and of missing out.
He says that Mark Douglas wrote a book called "Trading in the Zone". He says we should all read it. It is all about your mind. Mark Douglas has a website. You can get a quick preview of this book here.
What you can control is the size of your investment and the risk of your investment. You must limit your losses as this is very important. Have a system and consistently follow it. To enter the Holy Grail Mindset, develop your system. You should paper-trade your system to check it out. Trade on the odds. (John Manley is a trader.)
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
Tuesday, October 23, 2012
Money Show - Harry Dent
Harry S. Dent, Jr. is the author of The Great Crash Ahead and founder and president of H. S. Dent foundation. His talk was called "The Great Crash Ahead: Strategies for a World Turned Upside Down".
He says that people reach a spending peak between ages 46 and 50. Older people spend less once the kids have left home. The young are expensive. They produced nothing but inflation. This is why we had inflation in the 1970's.
We will have deflation going forward because older people are deflationary. They spend less and then they retire. We have deflation because of demographics and debt. When you have high debt levels you get deflation.
Stocks peak every 39 years (that is 1929, 1968 and 2007). Recovery from this takes 25 to 27 years. Babies are the key to the future. China is not having babies. They will go in the same direction that Japan did. Japan was the first to have a baby boom peak.
In Vancouver, real estate costs 10 times average income. People cannot afford housing at 10 times income. It is speculators and foreigners who are buying. Real estate is in a bubble and bubbles always go back to their starting point. US housing is down 33%. To get back to the start of the bubble and that is 2000, housing will need to fall 55% to 65%. In 2000, housing in the US cost 3.3% of income. At the peak housing cost 9.2% of income. In Toronto, housing could drop 30% or more. Vancouver's drop will be worse.
Banks used to lend money from deposits, but now banks are borrowing to lend. Private debt needs to be deleveraged. The US has $66Tn of unfunded liabilities. The US debt is at $56Tn. This totals $122Tn and that is 8 times their GDP. We haven't seen the bottom of the US real estate market. Things are better in Canada as debt is 295% of GDP. Corporate debt in Canada is also better.
We are going to have deflation. We have debt deleveraging and this will cause deflation. We will also have another recession. In the US, the velocity of money is dropping like a rock. QE cannot overcome this. And it is not only debt deleveraging. We have a decline in wealth with more and more debt. The GDP is growing slower and slower.
Spain is going to trigger the next crises. Housing market in Spain was 30% higher than in the US. Spain had 13% of its work force in building. The US, in comparison, only had 6% of the workforce in building. Spain is moving into a depression.
China is a BS market. He does not believe that the growth in GDP is 8%. For China there is no soft landing. China is building roads and bridges to nowhere. China has built cities that are vacant. (There are a number of videos about this on YouTube. See oneof these videos.)
Japan has had lots of QE and the stock market is still down (from its peak).
In Canada, our markets peak before the US market does because of our commodities. Commodities peak every 29 to 30 years. In the next boom, Canada will do better than the US. We have real growth in the emerging markets.
Harry Dent has a site here. He said his site was at www.nextgreatcrash.com, but when you Google this site, you get the one above. For an interview with Harry Dent, see YouTube.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
He says that people reach a spending peak between ages 46 and 50. Older people spend less once the kids have left home. The young are expensive. They produced nothing but inflation. This is why we had inflation in the 1970's.
We will have deflation going forward because older people are deflationary. They spend less and then they retire. We have deflation because of demographics and debt. When you have high debt levels you get deflation.
Stocks peak every 39 years (that is 1929, 1968 and 2007). Recovery from this takes 25 to 27 years. Babies are the key to the future. China is not having babies. They will go in the same direction that Japan did. Japan was the first to have a baby boom peak.
In Vancouver, real estate costs 10 times average income. People cannot afford housing at 10 times income. It is speculators and foreigners who are buying. Real estate is in a bubble and bubbles always go back to their starting point. US housing is down 33%. To get back to the start of the bubble and that is 2000, housing will need to fall 55% to 65%. In 2000, housing in the US cost 3.3% of income. At the peak housing cost 9.2% of income. In Toronto, housing could drop 30% or more. Vancouver's drop will be worse.
Banks used to lend money from deposits, but now banks are borrowing to lend. Private debt needs to be deleveraged. The US has $66Tn of unfunded liabilities. The US debt is at $56Tn. This totals $122Tn and that is 8 times their GDP. We haven't seen the bottom of the US real estate market. Things are better in Canada as debt is 295% of GDP. Corporate debt in Canada is also better.
We are going to have deflation. We have debt deleveraging and this will cause deflation. We will also have another recession. In the US, the velocity of money is dropping like a rock. QE cannot overcome this. And it is not only debt deleveraging. We have a decline in wealth with more and more debt. The GDP is growing slower and slower.
Spain is going to trigger the next crises. Housing market in Spain was 30% higher than in the US. Spain had 13% of its work force in building. The US, in comparison, only had 6% of the workforce in building. Spain is moving into a depression.
China is a BS market. He does not believe that the growth in GDP is 8%. For China there is no soft landing. China is building roads and bridges to nowhere. China has built cities that are vacant. (There are a number of videos about this on YouTube. See oneof these videos.)
Japan has had lots of QE and the stock market is still down (from its peak).
In Canada, our markets peak before the US market does because of our commodities. Commodities peak every 29 to 30 years. In the next boom, Canada will do better than the US. We have real growth in the emerging markets.
Harry Dent has a site here. He said his site was at www.nextgreatcrash.com, but when you Google this site, you get the one above. For an interview with Harry Dent, see YouTube.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
Monday, October 22, 2012
Money Show - Michael Gregory
Michael Gregory is managing director and senior economist at BMO markets. His talk was called Canadian Economic Outlook: Parting the clouds.
Michael Gregory thinks that QE3 might give the US some traction. We got QE1 and QE2 because of worries about recession and depression. We got QE3 because of worries about jobs. The US has had productivity gains. It is producing more than before the recession but with less people. Some 4.5M jobs were lost in the US. The participation rate by population shows that employment is down.
In the housing market, sales and inventories are matching. House prices are up 2.7%. We will have traction in the US housing market when price appreciation is higher than the 30 year mortgage. US 30 year mortgages are at 3.4%.
He thinks that in Canada the housing market will have a soft landing. The US housing market is getting hotter and the Canadian housing market is getting cooler.
Canadian households have higher debt levels than in the US. Canada is going to underperform and going forward we should increase our US investing exposure.
He thinks that GDP growth in Canada will be 2.2% in 2012 and 2.0% in 2013. The US GDP growth will be 2.2% in 2012 and 2.3% in 2013.
He sees global headwinds. European area will bounce between chronic and acute problems. They seem now to be trying to balance austerity and growth. The Chinese economy will slow, but will have growth with inflation cooling. The new Chinese leaders will get credit for a soft landing. Oil prices will remain high but will be offset by natural gas prices.
The US has the fiscal cliff. If it goes over the cliff the US will have a recession. This is because of the $5.28B in measures that will be taken and this is 4.4% of the US GDP. The GDP hit will cause a recession because hit will be higher than GDP growth. Winston Churchill once said that the Americans will do the right thing after they have tried everything else.
He said that 9 of our 10 Canadian provinces are set to erase their deficits. He feels that there is little economic risk for Canada going forward. Emerging markets will continue to grow. It will be gas and grains that will feed inflation in Canada and US. Unemployment will fall in both Canada and US. The Bank of Canada will raise interest rates in 2013.
He says we have inflation when wages go up. Oil and food do not push inflation as they are just relative price changes. We can expect the Loonie to have parity into the future. The US's QEs will continue to debase its currency. There will be international money coming into Canada as Canada is a safe haven. Western Canada, B.C. to Manitoba, will lead growth in Canada (not Ontario or any province in the east).
He thinks that we have challenges of Global Government Debt, strong Canadian dollar, high household debt and weak productivity going forward. What we have going for us is Banking, foreign investment inflows, emerging market demands and a strong fiscal position.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
Michael Gregory thinks that QE3 might give the US some traction. We got QE1 and QE2 because of worries about recession and depression. We got QE3 because of worries about jobs. The US has had productivity gains. It is producing more than before the recession but with less people. Some 4.5M jobs were lost in the US. The participation rate by population shows that employment is down.
In the housing market, sales and inventories are matching. House prices are up 2.7%. We will have traction in the US housing market when price appreciation is higher than the 30 year mortgage. US 30 year mortgages are at 3.4%.
He thinks that in Canada the housing market will have a soft landing. The US housing market is getting hotter and the Canadian housing market is getting cooler.
Canadian households have higher debt levels than in the US. Canada is going to underperform and going forward we should increase our US investing exposure.
He thinks that GDP growth in Canada will be 2.2% in 2012 and 2.0% in 2013. The US GDP growth will be 2.2% in 2012 and 2.3% in 2013.
He sees global headwinds. European area will bounce between chronic and acute problems. They seem now to be trying to balance austerity and growth. The Chinese economy will slow, but will have growth with inflation cooling. The new Chinese leaders will get credit for a soft landing. Oil prices will remain high but will be offset by natural gas prices.
The US has the fiscal cliff. If it goes over the cliff the US will have a recession. This is because of the $5.28B in measures that will be taken and this is 4.4% of the US GDP. The GDP hit will cause a recession because hit will be higher than GDP growth. Winston Churchill once said that the Americans will do the right thing after they have tried everything else.
He said that 9 of our 10 Canadian provinces are set to erase their deficits. He feels that there is little economic risk for Canada going forward. Emerging markets will continue to grow. It will be gas and grains that will feed inflation in Canada and US. Unemployment will fall in both Canada and US. The Bank of Canada will raise interest rates in 2013.
He says we have inflation when wages go up. Oil and food do not push inflation as they are just relative price changes. We can expect the Loonie to have parity into the future. The US's QEs will continue to debase its currency. There will be international money coming into Canada as Canada is a safe haven. Western Canada, B.C. to Manitoba, will lead growth in Canada (not Ontario or any province in the east).
He thinks that we have challenges of Global Government Debt, strong Canadian dollar, high household debt and weak productivity going forward. What we have going for us is Banking, foreign investment inflows, emerging market demands and a strong fiscal position.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
Money Show - David Franklin
David Franklin's talk was called Managing Wealth in Uncertain times. He is CEO and market strategist at Sprott Private Wealth, LP. He thinks that uncertainty is going to continue. One thing he thinks is certain is that currency debasement will continue in US, Europe, China and Japan.
He says we are in a bubble of fear. People are lining up to buy negative return bonds. Both Switzerland and Denmark are selling them. He says that currently we have negative real interest rates. That is interest rates less inflation gives us negative real rates.
There is no country that can afford to raise their interest rates. In a negative yield environment, we should be buying gold as it is a safe haven. Also we should buy real assets. Stocks may also be a good thing to buy.
At 2% inflation, which is our current inflation rate, we will have our money devalued by 30% over 20 years. The QE's will not save us and stocks will be devalued overtime.
There are problems with investors going for yield. Investors paid 61% more for BP Prudhoe Bay Royalty Trust (TSX-BPT) than all its future cash flow are likely to be worth. In connection with PIMCO, people traded up this ETF to a premium to net assets of more than 75%. Their distributions included return on capital. He said that for Cornerstone investors got a 22% return, but 90% of that return was return on capital. When the fund runs down, they raise more capital. These are reasons he thinks that there is a bubble in income investments.
As far as the gold market is concerned, China is the gold market. They are purchasing 400 tons of gold each year and this is one half of the gold produced worldwide today. No one is quite sure why China is purchasing all this gold. China is also buying gold mines in Canada and South Africa. One reason they may be buying gold is because gold is a currency.
Volatility is going up. Resource stocks are at historical lows. Stocks are going to be overbought and oversold. What is overbought, including by Hedge Funds, are Utilities, Parma, Tech and Discretionary Staples. What is oversold are materials and energy.
Central Banks are going to expand their balance sheets. The US$ will be devalued. Negative interest rates are going to persist. There is a bubble in liquidity. The QEs will do us little good. China will continue to buy gold. Volatility will continue.
There are some unexpected consequences. One is that Canadian farm land. There is lots of it and it is cheap. We are getting foreign buyers of our farm land.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
He says we are in a bubble of fear. People are lining up to buy negative return bonds. Both Switzerland and Denmark are selling them. He says that currently we have negative real interest rates. That is interest rates less inflation gives us negative real rates.
There is no country that can afford to raise their interest rates. In a negative yield environment, we should be buying gold as it is a safe haven. Also we should buy real assets. Stocks may also be a good thing to buy.
At 2% inflation, which is our current inflation rate, we will have our money devalued by 30% over 20 years. The QE's will not save us and stocks will be devalued overtime.
There are problems with investors going for yield. Investors paid 61% more for BP Prudhoe Bay Royalty Trust (TSX-BPT) than all its future cash flow are likely to be worth. In connection with PIMCO, people traded up this ETF to a premium to net assets of more than 75%. Their distributions included return on capital. He said that for Cornerstone investors got a 22% return, but 90% of that return was return on capital. When the fund runs down, they raise more capital. These are reasons he thinks that there is a bubble in income investments.
As far as the gold market is concerned, China is the gold market. They are purchasing 400 tons of gold each year and this is one half of the gold produced worldwide today. No one is quite sure why China is purchasing all this gold. China is also buying gold mines in Canada and South Africa. One reason they may be buying gold is because gold is a currency.
Volatility is going up. Resource stocks are at historical lows. Stocks are going to be overbought and oversold. What is overbought, including by Hedge Funds, are Utilities, Parma, Tech and Discretionary Staples. What is oversold are materials and energy.
Central Banks are going to expand their balance sheets. The US$ will be devalued. Negative interest rates are going to persist. There is a bubble in liquidity. The QEs will do us little good. China will continue to buy gold. Volatility will continue.
There are some unexpected consequences. One is that Canadian farm land. There is lots of it and it is cheap. We are getting foreign buyers of our farm land.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
Money Show - Gordon Pape
Gordon Pape is the editor and publisher of "The Income Investor" and "The Internet Wealth Builder". His talk was called "The Best Investments for the Year Ahead".
He started off with a review of 2012. He said that the sovereign debt crisis just went on and on. Chinese growth is slowing. Falling commodity prices hit the TSX. Political gridlock in the US is slowing growth. The bond bull market continues. The US market outperformed the TSX year over year with the Dow up 9.9% and the TSX up just 2.3%. However, he said that despite all the problems, 2012 is a good investment year.
Next he talked about the winners in 2012. The bond market was a winner, but he thinks that it is the last gasp of the bond bulls. Investors pursued dividend yield. REITs were also another yield story. Limited Partnerships (LP's) and Income Trusts are still around. He said Wall Street stocks have been a winner as well as German stocks. Some TSX sectors have done well and they include Health Care and Consumer stocks.
He also talked about the losers in 2012. Some TSX sectors did poorly and they were mining and energy stocks as well as resource stocks. Greek and Spanish bonds did poorly. He also said that one of the things Canada needs to do is move our oil out to places besides US.
What he sees ahead for 2013 is that the European angst will continue. He sees slow growth there but thinks a recession is unlikely. He thinks that the Middle East tension will unsettle markets. He thinks that there will be more gridlock unless it can be broken. He thinks that China will regain its momentum. As China rebounds we should see a gradual recovery in commodities. The Bond Bull might end. He see New York stock exchange beating the Toronto one. He thinks that gold will continue to rise.
One of the things he thinks will occur in 2013 is the continuation of the yields play. That is people will pursue yield in their investments. Some Canadian stocks he mentioned were BCE Inc. (TSX-BCE), New Flyer Industries Inc. (TSX-NFI), Brookfield Infrastructure LP (TSX-BIP.UN) and Bonavista Energy Corp (TSX-BNP). He said that BIP.UN was a spin off from Brookfield and that it is still at a good value. He liked Bonavista because of the 7.9% yield. He thinks the US market is going to outperform the Canadian one and one US stock he mentioned was Plum Creek Timber (NYSE-PCL).
He thought this stock will benefit from the US housing recovery. He thinks that gold and gold stocks are going to go up because of QE3. He also likes Franco-Nevada Corp. (TSX-FNV, NYSE-FNV). He says that this is a gold royalty company that has month dividends. He also said that he thought that Canadian oil prices will remain low because of the lack of pipelines.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
He started off with a review of 2012. He said that the sovereign debt crisis just went on and on. Chinese growth is slowing. Falling commodity prices hit the TSX. Political gridlock in the US is slowing growth. The bond bull market continues. The US market outperformed the TSX year over year with the Dow up 9.9% and the TSX up just 2.3%. However, he said that despite all the problems, 2012 is a good investment year.
Next he talked about the winners in 2012. The bond market was a winner, but he thinks that it is the last gasp of the bond bulls. Investors pursued dividend yield. REITs were also another yield story. Limited Partnerships (LP's) and Income Trusts are still around. He said Wall Street stocks have been a winner as well as German stocks. Some TSX sectors have done well and they include Health Care and Consumer stocks.
He also talked about the losers in 2012. Some TSX sectors did poorly and they were mining and energy stocks as well as resource stocks. Greek and Spanish bonds did poorly. He also said that one of the things Canada needs to do is move our oil out to places besides US.
What he sees ahead for 2013 is that the European angst will continue. He sees slow growth there but thinks a recession is unlikely. He thinks that the Middle East tension will unsettle markets. He thinks that there will be more gridlock unless it can be broken. He thinks that China will regain its momentum. As China rebounds we should see a gradual recovery in commodities. The Bond Bull might end. He see New York stock exchange beating the Toronto one. He thinks that gold will continue to rise.
One of the things he thinks will occur in 2013 is the continuation of the yields play. That is people will pursue yield in their investments. Some Canadian stocks he mentioned were BCE Inc. (TSX-BCE), New Flyer Industries Inc. (TSX-NFI), Brookfield Infrastructure LP (TSX-BIP.UN) and Bonavista Energy Corp (TSX-BNP). He said that BIP.UN was a spin off from Brookfield and that it is still at a good value. He liked Bonavista because of the 7.9% yield. He thinks the US market is going to outperform the Canadian one and one US stock he mentioned was Plum Creek Timber (NYSE-PCL).
He thought this stock will benefit from the US housing recovery. He thinks that gold and gold stocks are going to go up because of QE3. He also likes Franco-Nevada Corp. (TSX-FNV, NYSE-FNV). He says that this is a gold royalty company that has month dividends. He also said that he thought that Canadian oil prices will remain low because of the lack of pipelines.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
Money Show - Kim Githler
Kim Githler is president and CEO of the Money Show. She made the opening remarks for this Toronto Money Show of 2012.
Kim opened with the remark that there are almost 11M high net worth individuals worldwide. High net worth individuals are those that have $1M plus. Most of these individuals (HNWI) are doing fine in this economy.
She also talked about how large losses can be damaging to you portfolio and the fact that losses count more than gains. If you lose 57% of your portfolio, you have to have more than a 100% gain just to make up this loss. In retirement such large loses can be devastating.
She talked about secular market cycles. A secular bear market can last for 12 to 25 years and a secular bull market can last for 10-15 years. We are currently in a secular bear market. She talked about reading Ned Davis's research into cycles. His site is here. You have to subscribe to get information there. However a recent paper by Baird uses some of Ned Davis's charts. There are lots of people who quote Ned Davis.
She said that you have to fight to protect your portfolio in secular bear markets. In these markets alternative investments give better returns. Alternative investments would be gold, minerals and resources.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
Kim opened with the remark that there are almost 11M high net worth individuals worldwide. High net worth individuals are those that have $1M plus. Most of these individuals (HNWI) are doing fine in this economy.
She also talked about how large losses can be damaging to you portfolio and the fact that losses count more than gains. If you lose 57% of your portfolio, you have to have more than a 100% gain just to make up this loss. In retirement such large loses can be devastating.
She talked about secular market cycles. A secular bear market can last for 12 to 25 years and a secular bull market can last for 10-15 years. We are currently in a secular bear market. She talked about reading Ned Davis's research into cycles. His site is here. You have to subscribe to get information there. However a recent paper by Baird uses some of Ned Davis's charts. There are lots of people who quote Ned Davis.
She said that you have to fight to protect your portfolio in secular bear markets. In these markets alternative investments give better returns. Alternative investments would be gold, minerals and resources.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
Money Show, Toronto October 2012
I will talk about what the speakers I listened to said, speaker by speaker. This will mean that I will have more than one entry each day so that I can cover all the speakers I listened to.
I will bring to post as I transcribe my notes.
On my Investment Talk blog I am today writing about Brookfield Office Properties (TSX-BPO, NYSE-BPO). Today, I am discussing the stock and how it has done over the past 5 and 10 years. To read about this stock go here....
I will bring to post as I transcribe my notes.
On my Investment Talk blog I am today writing about Brookfield Office Properties (TSX-BPO, NYSE-BPO). Today, I am discussing the stock and how it has done over the past 5 and 10 years. To read about this stock go here....
Subscribe to:
Posts (Atom)