Global Mining Investing $69.95, 2 Volume e-Book Set. Buy here.
Author, Andrew Sheldon

Global Mining Investing is a reference eBook to teach investors how to think and act as investors with a underlying theme of managing risk. The book touches on a huge amount of content which heavily relies on knowledge that can only be obtained through experience...The text was engaging, as I knew the valuable outcome was to be a better thinker and investor.

While some books (such as Coulson’s An Insider’s Guide to the Mining Sector) focus on one particular commodity this book (Global Mining Investing) attempts (and does well) to cover all types of mining and commodities.

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Monday, January 26, 2009

Has the Dow Jones bottomed?

If you have already started buying back into the Dow - its not bad timing. Judging by the banking stocks in Australia and the Dow index, the market has yet to reach its trend line lows. The facts however suggest its probably unlikely to do so.
The chart to the right is particularly interesting because it shows the log-linear trend for the Dow over its entire life (1897 to 2009). Rarely do we get a history of 112 years.
This chart is interesting because there should in theory be a relationship between price increases and the money supply, or the nominal value of money and the size or real value of the economy. We can take the Dow Jones as a measure of this because prices between stocks should find a comparative value equilibrium based on yield.
We can see from the chart that the Dow in 1929 was far more overvalued than it is today; but that the Dow today was more seriously overvalued in 2007 than the 1965. More recent consolidation and sell-offs have brought the Dow back to support, which should provide a basis for market support, but the market could not be considered good value.
The question we have to ask is - Was the collapse of asset values in 1929 the result of poor Fed and government policy, or was it because of the extent of the exuberance. In as much as the 2000s was almost as exuberant as the 1920s, we might conclude that we are going to fall back to the base line trend (index level of 3.5). The alternative is the prospect of the markets going sideways for 20 years with brief, unsustainable rallies. That strikes me as a long time, but that's exactly what the market did back in the 1970s (1965-1985). There were gains in nominal terms, but after adjusting for inflation, the market effectively went sideways for a long time.
The implication is not that investors should sit on cash for the next 20 years, as it will be eroded by inflation. The challenge ahead is to pick the bottoms and tops as the market passes through a period of protracted consolidation. These will be significant rallies of at least 30% I would suggest.
Most people will not be aware, but we have actually be in a consolidating market trend for a decade already. We can expect to break-out of this consolidation trend in around 2022, so that's in about 13 years. That is too long to invest for the long term. The 'buy & hold' strategy will not make you money over this period. You need to learn to become a trader. You will need to check your stocks at least weekly, and better still daily because the corrections will be rapid. More rapid than they were in the past because the market is better informed. This is not the first time, and some people will know it.
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Andrew Sheldon www.sheldonthinks.com
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Japan Foreclosed Property 2015-2016 - Buy this 5th edition report!

Over the years, this ebook has been enhanced with additional research to offer a comprehensive appraisal of the Japanese foreclosed property market, as well as offering economic and industry analysis. The author travels to Japan regularly to keep abreast of the local market conditions, and has purchased several foreclosed properties, as well as bidding on others. Japan is one of the few markets offering high-yielding property investment opportunities. Contrary to the 'rural depopulation' scepticism, the urban centres are growing, and they have always been a magnet for expatriates in Asia. Japan is a place where expats, investors (big or small) can make highly profitable real estate investments. Japan is a large market, with a plethora of cheap properties up for tender by the courts. Few other Western nations offer such cheap property so close to major infrastructure. Japan is unique in this respect, and it offers such a different life experience, which also makes it special. There is a plethora of property is depopulating rural areas, however there are fortnightly tenders offering plenty of property in Japan's cities as well. I bought a dormitory 1hr from Tokyo for just $US30,000.
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The Philippines property market remains one of the strongest in Asia thanks to rising incomes, rising population and rapid rates of urbanisation. The administrative reforms of the Arroyo government have given way to improved administration under Aquino. ASEAN countries can be expected to achieve even greater price gains than Western markets, demonstrating that this super cycle is far from over.

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Investment Strategy

If you are investing for the long term, you still need an investment strategy. Dont be fooled by the rhetoric of fund managers. The reason they advise you to 'buy & hold' is because they dont want to compete with you in sell-offs. Markets and industrial sectors are cyclical, so they demand trading to get the best returns. Fund managers actually cant hope to match the performance of small investors (if you are half good) because they have to manage huge amounts of funds and charge you a fee besides.
MY ADVICE is (i) look at a range of market indices and decide upon what level of correction would give you the justification you need to get in & out of the market. It might be a 5-10% retracement or a break of trend. (ii) Diversify if you dont have an intimate knowledge of the company or management. More than 30% in one company is aggressive.

'Buying NZ Property – Download the free sample readings!

The NZ property market is shaping up as one of the most attractive property investment markets for the next few years. High yielding property and the collapse of the NZD make NZ the perfect counter-cyclical investment if you buy right! In addition, there is no capital gains tax, transfer taxes, VAT/GST or wealth taxes in NZ, so rest assured that NZ property is tax-effective! Learn more now!

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