• 13 May
    The Odds for a US Recession

    The Odds for a US Recession

    • The current is the fourth-longest US economic expansion period with 84 months of growth.
    • Investment spending has been declining for the last 4 quarters.
    • Recession forecasts indicate increased chances in the medium term.

    Introduction 

    The scariest word for any investor is the word recession. A recession arises when there is negative economic growth for two consecutive quarters. No economic growth makes it difficult for businesses to grow as people tend to spend less and save until better times come around. This creates a spiral as less spending forces companies to lay off employees and further cuts investments. If prolonged economic hardships persist, governments intervene with quantitative easing or with other projects to get the economy going again. A recession has an immediate negative impact on financial markets as investors become more risk averse and seek security above all. More →

    By Sven Carlin Investiv Daily US Economy
  • 12 May
    Is There Equilibrium in Oil?

    Is There Equilibrium in Oil?

    • Production costs are below current prices and reserves are constantly growing.
    • OPEC’s rosy forecast of $70 a barrel in 2020 is based on a model excluding any disruptions from electric engines or renewable technology developments.
    • Demand in developed countries is declining and the trend might spill over to developing countries.

    Introduction

    Oil prices above $100 a barrel seem impossible but they were a common thing just two years ago. 2014 was the worst year for oil as it tumbled more than 50% from above $100 to below $50 a barrel. In January 2016, oil reached lows not seen since 2001 and 9/11 with prices below $30. The current price of oil quickly rebounded from those lows and is currently around $45 a barrel. More →

    By Sven Carlin Commodities Investiv Daily Oil
  • 11 May
    Hedge Funds as Investment Diversification

    Hedge Funds as Investment Diversification

    • Hedge funds have performed miserably in the last bull market but things might turn.
    • Fees are the deal killer as 2% of assets under management and 20% of profits eats up all the returns.

    Introduction

    There is currently a negative sentiment towards hedge funds as they mostly underperformed the market in the last 6 years. This article is going to elaborate on how hedge funds work and relate that to the current circumstances in order to assess investment possibilities. More →

    By Sven Carlin Hedge Funds Investiv Daily
  • 10 May
    Is It a Good Idea to Invest in Lithium?

    Is It a Good Idea to Invest in Lithium?

    • Tesla announced building 500,000 cars in 2018 and purchasing the complete current global lithium supply per year.
    • Lithium is not scarce and could easily get oversupplied even with demand growing.
    • Other technologies, like vanadium batteries, will always present a threat to lithium.

    Introduction

    On May 5, Tesla’s (NASDAQ: TSLA) Chairman and CEO Elon Musk announced that TSLA intends to produce half a million cars in 2018. Apart from the craze currently surrounding TSLA, the trend towards electric vehicles is undeniable. An option that does not imply direct investments into electric cars manufacturing companies is an investment in lithium related investments as lithium is the most important material for battery production. This article is going to elaborate further on the investing possibilities, risks and rewards of the lithium option. More →

  • 09 May
    How the Jobs Report Affects Stocks

    How the Jobs Report Affects Stocks

    • The April jobs report shows two sides: slower hiring and increased working times and wages.
    • The long term outlook is pessimistic due to the constant decline in the labor participation rate.

    Introduction

    On May 6, the Bureau of Labor and Statistics (BLS) released its monthly employment situation summary.

    The report is released on the first Friday of the month for the previous month. It consists of two parts: one presents non-farm payrolls, hours worked and hourly earnings, and the other is created by surveying more than 60,000 households in order to extract the unemployment rate. More →

  • 06 May
    Small Caps: Time to Invest?

    Small Caps: Time to Invest?

    • Small caps have lagged the S&P 500 in the last two years, but historically outperform it.
    • Stock pickers could find a gem in the small cap world but risks are also big.
    • Small caps are more related to the US economy than large caps.

    What Are Small Caps?

    Small caps are stocks with a relatively small market capitalization, usually between $300 million and $2 billion. One of the multitude of reasons behind investing in small caps is their growth potential, as it is generally considered that smaller companies have more growth opportunities due to untapped markets. More →

    By Sven Carlin Investiv Daily Small Caps
  • 05 May
    There is a Huge GAP Between Reported and GAAP Earnings

    There is a Huge GAP Between Reported and GAAP Earnings

    • Real earnings are currently 25% lower than pro forma reported ones.
    • The other consolidated income statement can also hide surprises.

    Introduction

    How would life look if things were as you saw them or exactly like someone presented them? Surreal for sure as it would require a non-human mind to objectively process information and accept a situation as it is. People usually fall in love with the wrong person or feel depressed over nothing important. The same is applicable in business, but it’s strongly biased toward falling in love with one’s business and refusing to see the flaws of it. Such a behavior results in a large gap between pro forma reported earnings and official Generally Accepted Accounting Principles (GAAP) results. More →

  • 04 May
    Investment Opportunities in Iron Ore

    Investment Opportunities in Iron Ore

    • Iron ore as a commodity faces long term oversupply.
    • The shift to a service oriented economy lowers Chinese steel demand growth.
    • Short term euphoria makes iron ore and related assets great for trading.

    Introduction 

    Iron ore is the world’s most mined and commonly used metal as 98% of it is used to make steel. As steel is mostly used for infrastructure and building it is not surprising that China is the world’s biggest consumer of iron. China produces 50% of the world’s steel output and 47% of the world’s iron ore. More →

  • 03 May
    Tax Holiday Could Repatriate $2.1 Trillion

    Tax Holiday Could Repatriate $2.1 Trillion

    • US companies have more than $2.1 trillion abroad.
    • 12 years have passed since the last tax holiday.

    Introduction

    A tax holiday is a government incentive to businesses where it lowers or eliminates a tax for a period of time. The most interesting tax holiday for investors is a corporate income tax holiday on the repatriation of foreign cash. Typically, any repatriated cash is subject to a 35% corporate income tax and therefore US corporations are reluctant to repatriate it and keep their cash abroad. The last tax holiday was voted by Congress in 2004 when companies where allowed to repatriate cash at a 5.25% tax rate. Many companies took advantage and repatriated billions of dollars. 12 years have passed since then and it is time to look at what the investment opportunities are related to an eventual new tax holiday. More →

    By Sven Carlin Investiv Daily Tax Holiday
  • 02 May
    Facts, Fears and Opportunities in China

    Facts, Fears and Opportunities in China

    • Even if China is slowing down, the growth is still excellent and the potential is huge.
    • The Chinese market is 43% down from its 2015 high.
    • Short term fears might give trading opportunities as the long term trend is a growing one.

    Introduction

    In the last twelve months there has been a lot of talk around China with various economic forecasts and explanations which resulted in a severe negative influence on markets ranging from stocks to commodities. This article is going to give an overview of what happened in the last year, and some scenarios of what might happen and how that should influence financial markets. More →

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