Daily Investment Tips

I was reading a L.A times article, Russian living in droves. Reason for departure are, low wages and some can’t standing seeing the face of Vladimir Putin (he is returning to Russia President in 2012) on TV for the next 12 years. Such stories are worrying because when a country looses it’s working population the economy will eventually suffer. Even more worrying is the politicians in Russia don’t give a foot: To them the more the educated leave, the more the opposition weakens.

China Vs Russia In the Future

I love web articles but I love reader comments more. A reader left a thought provoking comment on this issue.

Let me get this straight. Russia is the largest country in the world and extends eleven time zones. It has about 140 million people and that population is declining and the Russian economy is flat at best.

Next door China has over one billion people, a growing economy and needs many of the natural resources that Russia has.

Fifty years ago, a situation like that would have brought war.

I’m not predicting war between Russia and China but it is not too far fetched to think that China might some day want to purchase part of Russia. A corrupt and weakened government in Russia just might go for it to fix short-term problems.

written by Constantine Njeru \\ tags: China, Chinese Economy, L A Times, Largest Country In The World, Natural Resources, Population, Russia, Russian Economy, Vladimir Putin, Wages

New Zealand Dollar is a good hedge against the fear of the long term fall of US Dollar. The FT reported in May 30, 2011 that the New Zealand dollar hit a record high.

Factors Causing Rise in New Zealand Dollar Vs US Dollar.

1. Tight Monetary Policy – The Reserve Bank of New Zealand is maintaining a long term policy of a tight monetary policy this is versus the loose monetary policy(massive stimulus programs) in US.
2. Rising trade surplus – Higher global demand for food, particularly its meat and dairy products, means exports will always outpace imports. Compare this to the US that is operating in a trade deficit thanks to massive imports from China.

written by Constantine Njeru \\ tags: Bank Of New Zealand, China, Dairy Products, Fear, Global Demand, Massive Imports, New Zealand Dollar, Reserve Bank Of New Zealand, Stimulus, Tight Monetary Policy, Trade Deficit, Trade Surplus

The Tech IPOs train 3.0 is truly underway. First it was Demand media off the blocks, then Renren, Linkedin. And now it is the turn of Yandex, Russia’s largest search engine.

Yandex IPO Price.

Yandex IPO was priced at $25. We made a comparison of Yandex valuation with another famous search engines, Google and Baidu: At $25 a share, the company is valued at some $8bn, with an earnings multiple – about 60 times net income – higher than Google’s, but below that of Baidu, China’s top search site.

Yandex IPO Date

The US Initial Public offering started on Monday 22, May 2011. The shares will begin trading on Tuesday on the Nasdaq stock market.

written by Constantine Njeru \\ tags: Baidu, China, Earnings, Google, Initial Public Offering, Ipo Price, Ipos, Largest Search Engine, Linkedin, Nasdaq Stock Market, Net Income, Russia, Search Engines Google, Train, Yandex

Renren, the Chinese Facebook,  made a big start on it’s IPO debut. Renren IPO price was $15, the shares rose near 40% on the first day to settle at $19.

Despite critics arguing the company was overvalued, investors seemed to be very thirsty for new tech stocks. Renren, China’s answer to Facebook, raised $743m.

Renren valuation was 67X revenue, versus 25X revenue for Facebook’s private markets valuation.

Investors seems to have thrown caution to the wind. Currently ‘Chinese Facebook’ Renren has about 5 million users a month and the company continues to make a loss. The only way to justify this IPO is to say investors are betting on the company’s potential to rope 1 billion Chinese.

written by Constantine Njeru \\ tags: 1 Billion, 5 Million, Bonanza, Caution To The Wind, China, Debut, Facebook, Investors, Ipo Price, Private Markets, Rope 1, Tech Stocks

Richard Russell says gold is on its way to $6,000:

This time, gold has, so far, only multiplied five times — from 255 to 1430. If gold was to repeat its 1970 performance and multiply 24 times, it would rise to over 6,000. But there’s a difference between the two gold bull markets: This time the other half of the world’s population (China, India, Asia) has been added to the mix. And this time, the very viability of fiat currencies is a part of the picture.

Richard Russell has since 1958 been editor-publisher of the Dow Theory Letters, which “cover the U.S. stock market, foreign markets, bonds, precious metals, commodities, economics — plus Russell’s widely-followed comments and observations and stock market philosophy.

Source: Kingworldnews.

written by Constantine Njeru \\ tags: Bonds, Bull Markets, China, Commodities, Dow Theory Letters, Economics, Editor Publisher, Fiat, Fiat Currencies, Foreign Markets, Half Of The World, India Asia, Market Philosophy, Population, Precious Metals, Richard Russell, Russell Gold, Time Gold, U S Stock Market, Viability

Copper has soared to a record of $4.2705 per pound on Tuesday December 2010 in New York. Copper was up 28.3% in 2010.

The common knowledge is Copper prices and prices of all other metals have been driven up by the rising demand in China and India. But the truth is another hidden hand is at play here : Some commodity traders have successfully cornered the markets.

Fundamentals for Higher Copper Prices

The wallstreet journal is reporting a single trader has reported it owns 80%-90% of the copper sitting in London Metal Exchange warehouses, equal to about half of the world’s exchange-registered copper stockpile and worth about $3 billion.

If a single player has such a large control of the commodity you can only conclude this has created an artificial shortage.

Copper ETFs

Another hand is the power of ETF. This funds have increased the amount of money flowing into metal prices. They are buying up the metal pushing the prices higher and higher.

When you combine, the rising demand for the commodity in China, the dominant control by one player plus the power of the ETFs you can predict or forecast Copper prices will continue to remain high, atleast for now.

written by Constantine Njeru \\ tags: Amount Of Money, Atleast, China, Commodity Traders, Common Knowledge, Copper Prices, Dominant Control, Half Of The World, India, London Metal Exchange, Metals, Pound On, Single Player, Stockpile, Truth, Wallstreet Journal, Warehouses

The latest information on Soybeans is that demand continues to out pace supply. For commodity traders interested in Soybeans all indications are Soybeans price trend on a Soybeans price chart show an upswing.

Factors Driving the Rise in Soybeans Prices.

1. Demand remains strong, especially from China
2. concerns about the future Brazilian harvest, tighter supply.
3. Rise in price of corn. farmers are using more land for corn because its more profit. This will further reduce Soybeans supplies

Source businessweek article.

With these factors in mind it is easy to understand why many commodity analysts forecast / predict the price of Soybeans will rise.

written by Constantine Njeru \\ tags: Businessweek, China, Commodity Price, Commodity Traders, Corn Farmers, Pace, Price Trend, Soybeans, Upswing

In the book Age of Turbulence by Allan Greenspan. The former Fed Chief made some interesting economic predictions of US economy and Chinese economy.

The rise of Chinese wages.

The rural urban migration of Chinese workers from farms into factories, will slow, leading to stronger wage pressures and prices, he says. This is already happening as we have seen Foxconn the largest factory in China increase wages of its factory workers.

American Economy and Inflation

The impact of rise in Chinese wages will impact on the US economy. High prices of Chinese goods coming into the US will cause inflation.

written by Constantine Njeru \\ tags: Allan Greenspan, American Economy, China, Chinese Economy, Chinese Goods, Chinese Workers, Economic Predictions, Factories, Fed Chief, Inflation, Turbulence, Urban Migration, Wage Pressures, Wages

Eldorado Gold is a Canadian gold mining company. It has operations around the world.The company stock is listed in NYSE.

Eldorado Gold Competitive advantages

The only North American mineral operator with mines in China. Which places it at a strategic position to take advantage of the booming Chinese economy.

The company has low cost strategy, Eldorado aims to keep the costs of mining, processing, transport, and selling around $375 an ounce.

When you think about that low cost strategy, gold could fall dramatically from its current heights around $1200, and Eldorado would remain profitable.

written by Constantine Njeru \\ tags: Canadian Gold, China, Chinese Economy, Company Stock, Competitive Advantages, Eldorado, Gold Investing, Gold Mining Company, Gold Stock, Investing In Gold, Nyse, Ounce, Stock Analysis, Stock Investing