Rainer's Investment Insights

With Gold prices now closing above USD 1300 per ounce, it deserves a closer look, despite the fact that for us mutual fund investors, capturing the rise in value is a formidable challenge.   And I am keeping the info especially "lite".  Little attempt is being made at substantiating the current prospects for gold, which others can do so much better.  I thought it more important to putting it into perspective for the purpose of portfolio management. The following is an excerpt from the latest SingCapital Market Update, normally reserved only for SingCapital Advisors.  Is Gold becoming the driving factor to the much publicised asset bubble, supposedly forming when inflation runs rampant?   Gold prices move to ever new highs! It is only HIGH in relation to the USD.  Indeed, gold prices now appear to form a (short term) speculative bubble in relation to the USD. In case you are not sure, - I call it a bubble when market activity in a particular ass...

10 days have passed since I called for a turn ( The T'ursday Turn ). While markets continue to gyrate precipitously, a really obvious and impacting downward pressure has yet to appear.  From a technical point of view, it is easy to see that the recent parabolic upward moves will lead to exhaustion soon.  We might also argue that we are hitting major resistance levels in many indices. Imagine prices a bit like delirious, helium-filled balloons soaring up to the ceiling. Where is the ceiling? Will it cause balloons to burst? No, but they will sort "bounce off", only to float up hitting the ceiling again.  It would take a fast moving fan or a sharp object in the path of the balloon to end the fairy tale advance.  Away from the metaphors: How is the DJIA doing?   The 10,800 level has long been my sweet spot from which to start positioning against a further rise in the DOW JONES. The one-day wonder last Friday (23 September) with stocks in the US rising an aver...

Today is a down-day, with red figures in all indices, - a typical Thursday Turn day.  You can check, among all the days in a week, Thursday produces the most trend turns... Recognising oncoming change, where most do not... Many took my advice in early August and took profit.  Sentiments at the time were ambivalent, but not necessarily bearish. So, some stayed the course. Sudden downward pressure in the third week of August caused anguish among these brave investors.  But, at the time (August 22nd), I told you to watch out for an upturn when everyone else was ready to throw the towel.  Not following the advice would have meant missing out on the 4-6% upside that followed. Today I want to tell you that it ain't worth hanging in there anymore, when really the media machine is telling you to throw your worries in the wind. Sure, the recent renewed upside looks nice (at least to those who only look to the tip of their noses), and - after a few days of 'dithering' in...

"Unusually uncertain" as a description of the current state of the US economy sounds like a bit of an understatement.  Are we to believe that  Mr Bernanke does not quite know?  Or is confused as to what he should do? Or is he hinting at his government to start looking beyond the propagated 'recovery story' and acknowledge realities?  If so, what are these realities? Depending on the time frame capital markets do tell us more often than not where they are at. And they are in two minds at present .  That is not the same as uncertainty!   But it ties in with the longer-term rift appearing between the old and the new economies. More surprisingly, the typical scenario of "America sneezes and the rest of the world gets pneumonia" no longer holds true.  The volatility in US and European stock markets - and currencies - was quite exceptional year-to-date.  But the dominant driver -  high trading volumes - was conspicuous by its absence....

For weeks, they (=the bears) felt safe and in control: fundamentals were 'deteriorating', reports mostly negative, investor sentiments that of old trembling men.  And then came the turn, as always when most are giving in to their worries and concerns and run for cover.   It took two days of dithering but the liberating move is happening right now!  I must say, some learned colleagues in other FA firms have the uncanny gift to make their call just when markets are turning the other way, for the second time in row! The last time in mid-May they wanted us all to buy into treasury bills! Yesterday, the expert steadfastly proclaimed on TV that equity markets can only get worse. These calls may not be wrong for the applied strategy with their portfolios but it sure must be frustrating for clients who have a good appetite for risk . It also goes to show that allowing for consensus to influence your investment decisions in markets like these does nothing much for your por...