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10% annualized returns (3.5% dividend) for next decade in XLU. Does that sound reasonable? What am I missing (Mr. Buffett is obviously a big fan of energy Electricity/Energy) going forward.February 6, 2019 at 4:35 pm in reply to: Notes from the middle kingdom (or insights into China). #18728
The trade squirmish with China that we are witnessing is but mere one battle with China, in a big war. America may think it won the war, but China sees it as one battle, that they may loose today, but they are singularly focused on winning the war. Only time will tell who will win the war.
You have provided me with a dizzying array of information in one short post. Thanks. Yes, I would love to discuss this off line. You may respond to me on firstname.lastname@example.org. Thanks.
Thanks, your call was prescient.
Saudi Arabia brought the hammer down on oil prices week after Thanks giving 2014. It has been three years since. Cam made a prescient call, of a generational bottom in oil. If investment is a life long commitment, it would be a good idea to re-evaluate oil prices now. OPEC met this week. What is the conclusion of their meeting? Is oil a sell here?
No, not looking to short CAD (do not follow it much). Thanks for the tip. Eyeing Euro short (against US$) at some point in time, soon, for a trade.
Thanks. Yes, too late to short HCG. #2 is difficult. #3 is a possibility, but CAD is already down against USD.July 8, 2017 at 6:04 am in reply to: What metrics distinguish between volatility, rotation, profit taking algos? #10815
See the graph on this link:
https://finance.yahoo.com/chart/%5EIXIC#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%3DJuly 8, 2017 at 5:59 am in reply to: What metrics distinguish between volatility, rotation, profit taking algos? #10814
Take a look at the technicals.
100 DMA for Nasdaq, is at 6017. Nasdaq closed on friday at 6153.08. Let us round off the 100 DMA to 6000. Last time, Naz bounced off 6000 was on 5-17-17. We are 5% below the all time peak (6321). In this recent correction, Naz bounced off the 6000 level several times.
The next support below 6000, on the Naz, kicks in at (5800) to 5900.
The 150 DMA average kicks in at 5850 (I am rounding off these numbers for sake of convenience). Note that for the past one year, Naz has bounced off the 100 DMA. If one is underinvested in the Naz, one could add to positions, or build a position by dollar cost averaging around the supports noted.
One of course needs to see how the bounce of the Naz develops in the near term. So far, Naz has been a laggard, although, it is early days, as Cam indicated. The sector is expensive, and has experienced steep rise in the last 12 months. That said, that is also where the growth is.
Let us also look at the implied volatility of out of the money call options, of QQQ. The implied volatility for October, December 2017 and January 2018 contracts is 15-20%, give or take. So, the downside volatility of QQQ is 7.5-10% (half of the range). In conclusion, if one could stomach a 7.5% downside risk (400 points give or take), one could consider investing in the Naz, with careful stops and judicious $ cost averaging.
Look at the RSI also (relative strength index) for Naz, which is also at the low end of the range. That said, as Cam has pointed out, all of this depends on one’s time horizon and portfolio goals/time horizon.
Whether one should add industrials over tech, well, again, depends on portfolio mix, goals, and time horizon etc. Unfortunately, industrials are at the high end of the range here, everything is at a peak.
Still learning to fish.
The troubles for Saudi Arabia are starting. Hedge funds are now starting to short the Riyal. Of course, for every short bet, there has to be a someone who is willing to go long, but, I guess, there are traders who are willing to take the long bet. So here is the rumor;
The best asset the Saudis every owned was/is the oil and they decided to sell it short (by letting the price fall). The next asset they own is their currency. Let us watch this space, and see if there are more bets against the Riyal and how much the Saudis have to spend to defend the Riyal. It feels as though as though there is a short squeeze in oil developing somewhere around the corner.
Geopolitics of oil: Please find these two articles I came across;
I agree with Cam, we are close to a generational bottom than in energy prices (WTI could still go to 20$ give or take). Dallas Fed is guiding Texas banks to not foreclose on local drillers, instead facilitate orderly asset sales. Sounds surreal doesn’t it? But that is the world we live in. One day, it is likely Saudi Arabia will pay a huge price for such destructive polices, if it has to seek military help from the US.
Saudi Arabia is now taking next steps to contain currency market devaluation by banning short selling of the Riyal. Here is a link;
As the Swiss to $ peg a couple of years ago was broken down by the currency markets (or the Soros defeat of the British central bank in the early 1990s), defending currencies can be a difficult and expensive game. The British gave up defending the pound and the Swiss the Franc, in recent history. Saudi Arabia has already deflated its oil asset, let us see how long will it be able to defend the Riyal in the currency markets. Yes, they have significant $ reserves, but so one thought of the British and the Swiss.
Thanks for the references.
All I was trying to figure out was how long could Saudi Arabia could sustain low(er) petroleum prices, based on their cash reserves, social welfare outlays, public spending etc. in an attempt to fathom a bottom in oil prices. The intent of the earlier comment was not to highlight the possibility of Riyal devaluation, but yes, the comments could be interpreted in that manner (I see where you were coming from).
I highly doubt that The house of Saud would engage in deliberate Riyal devaluation for reasons you have noted. Currency markets, could well do that though, creating an even bigger problem for Saudi Arabia.
It is an interesting game of chicken being played.
Are you suggesting Riyal devaluation to gain market share?