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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Wednesday, March 27, 2013

The "Gillard effect" is a global phenomenon

Judging by the latest difficulties Rio Tinto is having with the Mongolian government, one might conclude that the propensity for governments to expropriate more wealth from shareholders is becoming a more popular policy initiative. The Rudd/Gillard government of Australia can take the credit for their 'initiative' in leading the  mob mentality towards expropriation.
The clear undesirability of this policy is that it entails theft of property from shareholders. It must be conceded that a legitimate case can be made for the public taking a cut in the development of a project, and for the state to act as a conduit for that. The problem is that this initiative has to be undertaken at the start; before a company has commenced exploration and established terms. They cannot arbitrarily breach terms and retain any credibility. That would constitute theft, and governments are supposed to protect people from theft, not be systematic exponents of theft. Otherwise:
1. Governments are no better than thieves
2. Provide a moral sanction for thieves in the broader community

Investors in mining stocks, particularly those with world-class projects, and most particularly the largest companies in the world, who tend to be the object of such 'revision' of terms - they are the most vulnerable. They risk being exposed to a systematic threat of sweeping reform of royalties. I call this the 'Gillard effect' after Julia Gillard, although Kevin Rudd should probably taken more credit; not to forget the  petty academic who lives on government-extorted taxpayer funds, who actually dreamed up the theme. In fairness, it was Rudd & Gillard who executed it, but he gave it the moral sanction. As John Maynard Keynes proved, a government only needs one ambivalent or misguided academic to justify a systematic extortion racket.

Asian property markets outperforming Japan Foreclosed Guide Philippines Property Guide
Profit from mining with Global Mining Investing eBook

Tuesday, March 05, 2013

Dow Jones - a great performer?

Reading the NZ Herald, you could be forgiven for thinking that the US economy has re-emerged 'transformed' from the global financial crisis. In the last few weeks, we heard that in the month of January, that the US deficit was positive for the first time in years. A seasonal aberration  however it did denote a positive trend. The problem with such news is that:
1. Asia is still growing and spending
2. Unites States is still saving, not spending, by paying down mortgages

The problem is two-fold:
1. Corporations are still strongly incentivised to take jobs offshore because emerging market wages are still very competitive
2. Once confidence returns, Americans will resume spending. This will create some 'domestic service' jobs, but it will also restore to some degree the spending which caused the problem in the first place.

The focus of this NZ Herald article however was the strength of the Dow Jones. The problem with the Dow Jones as a measure of financial well-being is:
1. The US has greatly depreciated in the time since it bottomed; and some of those economies to which it trades, have therefore been impacted. The USD has likely bottomed I would suggest to you. Its at an all-time low against the Philippine Peso.
2. The Dow has benefited from a significant amount of monetary stimulus by the Federal Reserve
3. Interest rates are very low - so of course equities will out-perform the bond market.

The issue is whether yields are attractive; whether the stimulus will be sustained. Investors apparently think it will be; or are they going to capitulate in coming days, and send the Dow crashing back down? Time will tell. There is no reason to say that Americans will not resume spending at some time. There is every reason to think that the softer currency and immigration will not effectively recapitalise the nation, that higher taxes a nd restored activity will result in a budget surplus as well as more jobs. The question is whether confidence has returned. We'll see.

Is the time to 'invest in stocks' destined to come after a doubling in the market? Apparently Robert Pavlik, chief market strategist at Banyan Partners, thinks so. We are told that these equity price gains can be sustained because earnings have risen drastically. Well, we need to factor in whether:
1. Those earnings came from consolidation gains - taking over the competition - remembering that corporations entered the recession cashed up
2. Higher prices due to weaker US
3. These earnings can be sustained if there is an increase in taxes

The implication is that now is a great time for American Filipinos to move their savings to the Philippines if they are looking to retiring there, or simply to paid off any investments in property there. The USD is I suggest going to be stronger from herein, or at least after that support is reached.

Asian property markets outperforming Japan Foreclosed Guide Philippines Property Guide
Profit from mining with Global Mining Investing eBook

Significance of Dow Jones record high

Overnight the Dow Jones broke the previous 2008 high of 14,140 points (end of day data), rising to a new intra-day record of 14,278.87 points. This is positive news for long investors, however it is not yet a convincing break, so I'd not be surprised to see the index collapse back under 14,000 points. It is noteworthy that the S&P 500 index is still 2.2% below its all-time high. The important distinction is that the Dow Jones Industrial Average is constituted by just 28 stocks, so its hardly a representative sample of the US equity market. These 28 stocks are 'huge' enterprises to be sure, like GE, but it tends to ignore stocks like Facebook, which pertains is a representative for the 'new economy'. The other aspect is that the Dow Jones Industrial Average gives greater consideration to offshore activity. GE for instance is a global enterprise with greater exposure to Asian economic activity. This is 'exposure' which would be less pronounced in the S&P-500 Index. So, if we are looking for a proxy for global economic activity, then the S&P is a better measure.
For this reason, whilst I was confident of a 14,000 point break, after a discussion with a colleague, I am inclined to wonder how sustainable this 'bull' is. I am instead inclined to wait for a more compelling trend indicator, whether short term price action. The reason for the concern is:
1. The chart below
2. The promise of stimulus
3. The relatively small size of the emerging markets in terms of their contribution to economic activity.

Having said that, this could change with:
1. A preparedness by Westerners to resume spending. At the moment they are paying off debts or under-utilised on welfare. Stronger property prices, low interest rates can change that, but it needs spending to build confidence. This is the role of stimulus and low interest rates; but are people so confident? At the first hint of confidence, are Western governments going to be forced to raise interest rates. There is no risk of wage demands. Asian offshoring has scared unionism out of existence (for the next 2 decades).
2. Further stimulus.

The market is making tentative steps at this point...I think so should you.

Asian property markets outperforming Japan Foreclosed Guide Philippines Property Guide
Profit from mining with Global Mining Investing eBook

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.
You can view foreclosed properties listed for as little as $US10,000 in Japan thanks to depopulation and a culture that is geared towards working for the state. I bought foreclosed properties in Japan and now I reveal all in our expanded 350+page report. The information you need to know, strategies to apply, where to get help, and the tools to use. We even help you avoid the tsunami and nuclear risks since I was a geologist/mining finance analyst in a past life. Check out the "feedback" in our blog for stories of success by customers of our previous reports.

Download Table of Contents here.

'Buying Philippines Property – Download a free sample chapter!

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.

Buying Philippines Property 2010
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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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