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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Thursday, September 18, 2014

Global equity markets restore uptrend and positive outlook

My earlier concerns in anticipation of a Dow 'market correction' proved ill-founded. It turned out to be simply a 'consolidation phase' or channel trend, which has given away to the preservation of the existing trend. During this type I sat out of the market, and to good result. I exited IVR at 3.5c, buying back at 3.3c, in anticipation of some possible drilling results. The results are only half-way out, with 4500m of a 13,000m drilling program completed. The results have not been as good as I expected, prompting the stock to fall back 20% before recovering (-15%). These are the risks that one takes on explorers. I was looking for a 200% gain, but instead I have an 'ambiguous loss', whilst I wait for more results.

Looking at the Dow Jones, we can see that it has closed at a new intra-day and daily high of 17,266 points, so this augers well for the sustenance of this trend for the time being. The question is, when might we expect a correction. We can see from the following trend that the market is well-above its trend, and I would be reluctant to read too much into a daily data. We might yet see a 'cancelling' correction, however this 'break' into a new high, and the fact it closed at a high does auger well for sustainability of the trend.
 I have always said that there are two things which will break this market:
1. Asset 'bubbly' prices
2. Rising interest rates

Technical and psychological issues like a 2,000pt S&P, this chart trend, as well as the recent passing of Sept 11th were concerns. I don't see any substantive reason for raising interest rates, and if there are any such rises in interest rates by the Fed, it will be because of excessive demand in the economy, not because of concerns about spiralling wages. So it would only be constraint on a strong economy, and not a blood clot causing an economic hemorrhage.  For this reason, I'm expecting a rapid recovery from any sell-off 'correction phase'. That's not that we should not seize the opportunities to sell.

Another way of looking at the market is that, this might have been a good indicator for the government to look at raising interest rates. I'd caution against that, and say, it would be better for the government to look at 'real avenues' for stimulating economic activity beyond speculative demand in assets. The best ways of doing this are:
1. Privatisation
2. Market reform
3. Welfare reform
4. Political reform

There is every reason to expect more privatisation, and the TPPA might be construed as 'market liberalisation', but in fact its 'market management' by powerful friends of government. There has been some reform of welfare. There is evidence of a shift from 'unconditional' to 'conditional love'. Political reform is however a long way off. We might be encouraged by talk to secession in Scotland, independence in Myanmar, binding referenda in NZ, but these measures are mere 'smoke' in your screen.

Asian property markets outperforming Japan Foreclosed Guide Philippines Property Guide
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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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