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  Quotations - Invest  
[Quote No.33177] Need Area: Money > Invest
"Learning to invest well is cumulative. You keep reading about what has worked in the past and keep up to date with current economic and company news and little by little your knowledge, understanding and competence broadens, deepens and improves." - Seymour@imagi-natives.com

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[Quote No.33181] Need Area: Money > Invest
"[Here is a quote that puts debt-to-GDP and debt-to income/revenue numbers into perspective:] There is a reason the EU, via its stability pact, set the debt-to-GDP ceiling at 60% for its euro zone members. Obviously, with the low interest rates we currently enjoy, one could argue that a higher debt-to-GDP ratio could be sustained, and that is essentially correct as long as interest rates remain low; however, you leave yourself seriously exposed, should rates rise which they almost certainly will as sovereign debt increasingly becomes junk. [Debt-to-GDP of 60% can be considered debt at 3 times government tax revenue if the average tax rate is 20%.]" - Niels Jensen
Funds manager. Quote from 'The Absolute Return Letter', February 2010.
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[Quote No.33182] Need Area: Money > Invest
"[Never under-estimate the importance and power of bond investors and the interest rate they will demand and therefore the fair value of the risk-adjusted, relative share market price to earnings multiple.] I used to think if there was reincarnation, I wanted to come back as the President or the Pope or a .400 baseball hitter. But now I want to come back as the bond market. You can intimidate everyone." - James Carville
U.S. President Clinton's campaign strategist.
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[Quote No.33187] Need Area: Money > Invest
"[When considering the dangers of government overspending and over-borrowing it is useful to consider government deficits and debt-to-GDP numbers. The following real article describes the dangers and some of the share market shocks caused in 2010, by the over-spending and over-borrowing of some European countries in particular.] To recap, the European Union is comprised of 27 sovereign nations in a common trading bloc, the purpose of which is to compete as a collective more effectively with the world's economic powerhouses of the US, Japan and now China. It was born of the old 'Common Market'. Of those 27 nations, 16 have chosen to also band together under a common currency - the euro. Responsibility for the euro falls to the European Central Bank, and 'euro-zone' membership comes with the requirement to satisfy various economic criteria in exchange for central bank protection (such as lender of the last resort insurance). One of those criteria is that members must maintain a level of public sector deficit of no more than 3% of GDP. In order to finance deficits, individual members issue their own soveriegn bonds. There is no single euro-zone bond. Excessive debt issuance from one member state incrementally impacts on each member state via the devaluation of their common currency. Any sovereign nation can also go cap in hand to the International Monetary Fund for financial assistance, as that is what the IMF is there for. But the IMF also imposes strict criteria itself when it bails out an economy, and one of those is a forced devaluation of that nations' currency. In the case of euro-zone members, clearly this is not an option. Thus the ECB must respond first. In 2009, the ECB was forced to bail out euro-zone member Ireland. One of the euro-zone's biggest problems is economic disparity. The CIA World Factbook (yes, the US charges the spooks with the task of measuring everyone's economy) puts the European Union's total GDP in 2009 down as US$16.0 trillion, ahead of the US on US$14.2 trillion. China's economy is now assumed to have exceeded that of Japan's but for the sake of comparison, the CIA suggests Japan's GDP was US$5.0trn in 2009 and China's US$4.7trn. On an individual basis, in fourth place is Germany with (the numbers are all in US$ trillions from here) 3.2 and then France with 2.6 in fifth. Of the euro-zone members, Italy's GDP is 2.1 (7th) and Spain's is 1.4 (9th). We then descend through the Netherlands, Belgium and Austria before we get to Greece on 0.3 (28th), and then Finland and Ireland before we get to Portugal on 0.2 (38th). For comparison purposes, Austalia's GDP is 0.9 in 13th place, only 64% as big as Spain's. We would not like to think of the consequences of Australia defaulting on its sovereign debt. Last night the European Commision used new EU treaty powers to impose strict measures upon the Greek government and economy. Greece has vowed to reduce its deficit from 13% of GDP to 3% by 2012 but the EU has given the government only one month to actually come up with a viable plan to achieve the target and has ordered public spending to be slashed. The new socialist government is already meeting opposition from its trade union support base and a general strike has been planned. The EU is under pressure from the ECB and from dominant member Germany to bring a profligate Greece into line. The measures are intended to prevent money flowing out of Greek government bonds for fear that Greece may not be able to meet its interest payment obligations. Previously [in 2010] the Gulf state of Dubai had announced a freeze on interest payments, sparking fears of default, but since the neighbouring United Arab Emirates agreed to underwrite Dubai debt, the danger has subsided for now. The ECB cash rate is set at 1% and the benchmark German bonds are yielding around 3%, but last week Greek bond yields blew out to 7% as funds quickly departed. The panic has now subsided over Greece. And nobody honestly expects that the EU member will default. However, the austerity measures now being imposed on Greece will not be well received by an angry electorate. It is the nature of such default risk episodes that contagion is a feature. When Thailand's currency began to falter in 1997 the Asian Currency Crisis, affecting all the Asian 'tiger' economies, followed. The following year Russia defaulted, bringing down the world's biggest hedge fund. When Iceland became the GFC's first major victim, Ireland soon followed. No sooner had Dubai hit the headlines, Greece was not far behind. And with the pressure now somewhat off Greece, the attention has turned to Portugal. Last night bond traders shifted focus to the next perceived victim and began selling out of Portuguese bonds [so as the price fell the yield rose]. There is, of course, a level of self-fulfillment about such flights of capital. When Bear Stearns went down [in 2008], Lehman Bros was not far behind. And then the US government was forced to bail out all major US banks. The Portuguese economy is smaller than the Greek economy, but much larger than the Greek economy is that of Spain - the ninth biggest economy in the world. Spain is considered to be the next domino, and beyond Spain even the larger Italian economy is drawing attention. If Spain were to default, the ramifications would be enormous. It would be another Lehman Bros as far as some commentators are concerned. Economists suggest the reason why Greece and Spain in particular are in serious trouble is due to the lax collection of taxes. In the property markets in particular - and Greece and Spain are both popular rental destinations for foreigners let alone the local population - landlords are estimated to be collecting more than half of all rents as cash and thus avoiding tax payments. This is leaving public coffers short by billions of euro. Clearly a serious shake-up is needed among the so-called Club Med nations and austeritiy measures will have to be complemented by some aggressive crack-downs. Fortunately for Spain, it entered the GFC with a budget surplus which provided an initial buffer against deflation. In response to criticims from other EU members, Spain has boasted that not one Spanish bank has needed an injection of public capital, and indeed one Spanish bank has bought into the crumbling British banking system. (Is the UK next?). But Spain has since suffered a huge bubble and bust in its property market, and quickly it is becoming more Greece-like every day. Standing on the sidelines is the huge economy of Germany, which is the only major EU member still in surplus. As a world exporting powerhouse, Germany has long run a fiscal surplus which has formed a large percentage of the offsetting US deficit. Germany is the senior member of the EU and the only member with any real capacity to come to the aid of Club Med and, for example, bail out banks. But Germany refuses to do so. Which is quite understandable. Germans are renowned for being a nation of strict savers unlike their frivolous Club Med peers. Why should Germans have to stump for Mediterranean profligacy? But at the end of the day, Germany agreed to be a member of both the EU and the euro-zone and hence the survival of both may depend on German intervention. Critics of Germany point out the underconsumption of Germans is just as much to blame for EU disparities as is excess consumption elsewhere. Germany is selling goods into its EU neighbours but buying little in return. This is a microcosm of the wider world malaise, which sees Japan, China and Germany on the one hand failing to spend on imports to balance out the rampant spending of the US, the UK, the rest of Europe and Australia etc on the other. The world is trapped with the pendulum having swung too far in the one direction. The Chinese government is currently making aggressive attempts to stimulate China's domestic economy to address the imbalance which has been exacerbated by China's currency being pegged to the US dollar. Germany's currency is also pegged to its neighbours in that they share the one single currency. For the current European economic situation to be eased, critics argue, and for the sheer survival of the euro and the EU, Germany needs to come to the party. Otherwise what we have building is a crisis of confidence in the euro which could get out of hand. The pound would not be far behind. The irony is that once again the world is seeking sanctuary in the safety of short term US debt despite the US boasting the biggest deficit of all. The devaluation of the US dollar, as a reflection of this deficit, appeared to be underway late last year, but the trend has now reversed as the other side of the world appears in more dire straits. Nevertheless, the longer US bonds have begun to creep up again in yield [as their price falls] as investors again begin to fear inflationary pressures. The collapse of Lehman Bros and subsequent ramifactions showed that one investment bank had the power to bring down the world. Such a catastrophic collapse was nevertheless prevented by coordinated government intervention across the globe. But what happens when national economies start going down?" - Greg Peel
Highly regarded Australian financial journalist and past derivatives trader. Published and copyright by FN Arena, 4th Feb, 2010.
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[Quote No.33191] Need Area: Money > Invest
"It takes little talent to see clearly what lies under one's nose, a good deal of it is to know in which direction to point that organ." - W. H. Auden

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[Quote No.33192] Need Area: Money > Invest
"No one ever went broke by saying no too often." - Harvey Mackay

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[Quote No.33194] Need Area: Money > Invest
"When government deficit spending rises above 3-4% of GDP and Debt-to-GDP rises above 60-70% eventually action must be taken to reduce these unsustainable levels. They include: -1. Increased taxes [and compliance measures], -2. Cuts in government services, -3. Cuts in entitlements [and wage freezes], -4. Higher interest rates, [lower bond prices]." - Seymour@imagi-natives.com

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[Quote No.33195] Need Area: Money > Invest
"[When investing in Real Estate Investment Trusts it is important to think about the future of bond yields as these determine the capitalisation rates that determine fair prices. The following article looks more fully at this process.] The commercial real estate crisis may be the most anticipated crisis in history. But just because it's widely anticipated doesn't mean that the crisis won't be destructive for REIT shares. Since most REITs are richly valued, the slow-moving commercial real estate crisis will ensure that future returns disappoint. Consider the valuation of REITs versus the S&P 500, which itself is overvalued. Despite being 25% below its late 2007 peak, the US stock market - measured by the S&P 500 index - is very expensive. The 'Shiller P/E ratio,' developed by Yale professor Robert Shiller, measures the S&P 500 against the average S&P 500 earnings over the previous 10 years, adjusted for inflation. It's a much more robust measure of valuation, considering the fluctuation of corporate earnings, and the fact that after bubbles, much of the earnings booked during the boom are written off during the bust. Consider that the earnings booked by Citigroup and other big banks near the peak of the bubble were largely written off during the bust. Therefore, a 10-year average of earnings is a better indicator of true earnings. The Shiller P/E ratio for the S&P 500 Index is now 21 - up dramatically from 13 at the March 2009 lows. This 21 P/E is higher than at almost any point in stock market history, outside of the late 1920s bubble, the late 1990s bubble, and the market peak in 2007. The S&P 500 is overvalued based on the Shiller P/E, but corporate earnings are supposedly going to soar in 2010, right? Well, even if you believe the optimistic 2010 estimates, the market is still more than fully valued on that metric. Ditto REITs. Commercial real estate - and the REITs that hold commercial properties - began to deflate rapidly in late 2008. But the Fed stepped in with bailout funds and easy money to halt the deflation...and even pumped the bubble back up a bit...REITs of all shapes and sizes more than doubled off the stock market lows of last March, while the Bloomberg Hotel REIT Index more than tripled. This rally has the look and feel of a dead-cat bounce, which means that it provides an attractive short-selling entry point. REITs soared as the bubble inflated from 2000-2007, then crashed when the bubble popped in 2008 and early 2009, and then launched a dead cat bounce when the Fed flooded the system in mid-2009 with massive injections of liquidity and cheap credit. Now REITs are priced at bubble valuations - valuations that bear little resemblance to economic reality. This bounce has postponed a healthy purge of assets in which old capital invested by foolish speculators during the bubble would have been wiped out - clearing the way for new owners to assume title to real estate at reasonable prices. When central banks prop up deflating bubbles with super-easy bailout cash, the bubble investors don't liquidate their overly inflated assets. They hang on and hope for a turnaround. But bubbles always deflate...always. Government intervention merely muffles the hissing sound for a while. This story played out in the Japanese real estate bubble that peaked in 1990, and it's happening with the US commercial real estate bubble that peaked in 2007. Capital becomes trapped in a dead asset class, thereby stretching the bubble's resolution out over decades. Toward the end of 2009, it became clear that 'extend and pretend' had become the official policy at most banks that hold commercial mortgages. We won't see a cleansing flush of hundreds of billions in underwater properties changing hands to new owners. Instead, properties will be dribbled out of the foreclosure pipeline at a slow pace. This measured pace of foreclosures will add to the chronic glut of property that will be quickly listed for sale into any bounce in demand. Some of the best short-selling opportunities in the REIT sector may be in the hotel REIT sub-sector. It's not a stretch to expect the hotel business will be ugly for a long time. Corporate and leisure travel is in the midst of a depression. And leveraged hotel owners built or acquired too many hotels near the peak of the commercial real estate bubble. Now many hotel owners are desperate to generate cash in order to pay down debt and retain titles to properties. Some are slashing nightly room rates below break-even levels. You know from the growth of Internet hotel booking services just how much more competitive and transparent hotel pricing has become over the past decade. Unless competitors are willing to match the pricing of the most desperate hotel owners, healthier competitors will suffer lower occupancy. Some levered hotel owners, like Sunstone Hotel Investors, are abandoning their equity in some properties to salvage others. In the fourth quarter of 2009, Sunstone defaulted on several nonrecourse mortgages held against 13 of its properties and turned the title over to its lenders. Sunstone calls this a 'deed-back,' but it's really a strategic default. Sunstone's lenders will probably keep and operate the hotels, rather than dump them at a distressed price. The behavior of Sunstone and its lenders shows how many hotel owners and lenders are putting off the necessary liquidation of underwater properties with bloated cost structures. The industry still needs to make more progress on downsizing, slashing operating costs, shrinking mortgage sizes, and lowering room rates to match demand. Until it does, the industry's returns on capital will not consistently exceed its cost of capital. Hotel REITs are highly sensitive to perceptions about the near-term health of the hotel business. Trends in occupancy and room rates shape perceptions about earnings. Hotel REITs own portfolios of hotels and outsource the management to companies like Marriott for a fee. Because of the relatively fixed costs of paying management companies a fee for operating hotels, Hotel REITs operate with high operating leverage: A 20-30% decline in revenues can translate into a 50-75% decline in operating income. Also, unlike offices or retail REITs with sticky long-term leases, the cash flow for hotel REITs adjusts quickly to changing conditions on a day-by-day basis. Over the past nine months, hotel REITs have soared on the perception that corporate and leisure travel will rebound strongly in 2010 and 2011. Analysts have forecast a sharp rebound in earnings. But I'm not buying it. In fact, I'm selling it. The prospect of rising Treasury yields will pressure REIT valuations. 'Yield instruments' like REITs are priced to yield a 'spread' over Treasuries. So prices of yield instruments usually fall when Treasury yields rise. I am anticipating this exact scenario. I'm a bear on Treasury bonds. Prices should go down and yields should go up as the creditworthiness of the US government deteriorates. Right now, with the 10-year yield at 3.64%, investors are assuming that the future direction of inflation and budget deficits will remain under control. Treasury bond bulls will argue the following points about inflation, federal deficits, and the existing stock of Treasuries. I've listed the bullish consensus view in bold type. My responses, listed as the alternative view, will follow each consensus view: Consensus view on inflation: 'High unemployment and low manufacturing capacity utilization will keep inflation fears in check. So those folks expecting inflation fears to push Treasury yields higher in 2010 are a few years early.' Alternative view: Outside of the panic liquidation conditions of fall 2008 or the Great Depression, rising prices are hard-wired into the US economy. If investors panic once again and desperately seek to hold cash, the Fed can team up with spending addicts in Congress to create new US dollars in limitless quantities [i.e. quantitative easing]. The past two years have proven this out. The issue isn't whether the government can satisfy demands of investors looking to liquidate assets and hold dollars. As long as Treasury yields remain low, the government can create limitless amounts of new credit to satisfy investor demand for default-free government liabilities (Treasuries and paper money). Instead, the real risk facing financial markets over the next few years is whether investors will remain willing to hold cash and Treasuries at low yields. Cash has no intrinsic value beyond the belief that it can be exchanged for goods and services. The value of Treasury securities depends on investors' willingness to hold them, despite the near certainty that trillions in new Treasury securities will flood the market over the next decade. The high unemployment/low capacity utilization argument is theoretical, antiquated, and based on a fairly closed, manufacturing-oriented economy. In this theoretical economy, unemployed workers continually bid the price of their labor lower until supply and demand for labor reach equilibrium at lower prices. Today's US labor market does not work that way. The work force is very specialized. A laid-off automotive engineer is not likely to underbid the salary of nursing graduates for an open nursing position. Instead, those who have left the labor pool are collecting unemployment benefits without contributing to the aggregate supply of goods and services. When the claims on goods and services grow faster than actual supply, prices rise. The conditions for hyperinflation arise when an economy's productivity collapses and supply of government liabilities overwhelms demand (as confidence in the value of those paper government notes collapses). The Federal Reserve promotes the 'low capacity utilization' case for low inflation so it can keep subsidizing the wounded banks with easy money. But the market could lose confidence in the Fed's theory if the CPI remains stubbornly high at the same time as unemployment remains high. The market would express this view by selling off long-duration Treasuries, which increases yields. If this happens, the Fed will have to tighten policy to restore the market's confidence in the integrity of paper dollars. Fed tightening would lead to a reacceleration of the unwinding of the commercial real estate bubble. Consensus view on Treasury supply required to fund budget deficits: 'Even though US household savings may absorb just a few hundred billion in Treasuries in 2010, foreign investors and US banks will buy enough to keep yields from rising.' Alternative view: Several sources estimate that the US Treasury must auction roughly $2.5 trillion in new securities in 2010. Some of the proceeds will retire maturing securities, while the balance will finance the budget deficit. The majority of the Treasury securities auctioned in 2009 were bills with very short maturity. The average interest rate paid on the Treasury bills auctioned over the past year is roughly 1%. But recently, Treasury auctions have been weighted more toward the longer maturities. Supply could overwhelm demand, causing prices to fall and yields at auctions to rise. Because banks are choosing to defend their souring bubble-vintage loans, and writing them off slowly over time, they won't have the capacity in the 'hold to maturity' section of their balance sheets to absorb as many Treasury securities as the market expects. If banks had flushed most of their bad loans off their balance sheets in 2009, they would have capacity to absorb perhaps hundreds of billions in Treasury securities in 2010. But they didn't. There is a scenario in which domestic demand for US Treasuries could exceed new supply in 2010: another stock market meltdown similar to the one in late 2008. If enough investors flee stocks in a panic and invest the proceeds into Treasuries, yields could go down. But considering that the government has committed its balance sheet to bailing out the financial system, that scenario is unlikely. More likely is a scenario in which investors question the integrity of the US balance sheet. The way to do that is to sell Treasuries. This scenario would be negative for the stock market, likely sparking the next leg of the secular bear market - a leg that involves several years of the S&P 500 trending gently lower under a rising interest rate environment. But it wouldn't likely involve a 2008-style panic liquidation of stocks. Consensus view on the existing stock of Treasuries held by foreign investors: 'Year after year, Treasury bears predict that foreign appetite for US Treasuries will weaken, but they keep buying. Foreign central banks will maintain their appetite for Treasuries because they have to keep their currencies cheap or pegged to the US dollar.' Alternative view: Foreign investors must be willing to hold Treasuries at a yield that compensates them for the risk that inflation and interest rates might go up in the future. If these investors fear that future inflation, interest rates, and deficits will remain dangerous, they won't buy more Treasuries until yields rise to higher levels. A financial market that's evolved to a state at which it requires a perpetually growing inflow of new money to remain stable is a Ponzi scheme. The market for tech stocks in 2000 and real estate in 2006 had evolved into a Ponzi. Those who argue that foreign creditors will never sell Treasuries because it's 'not in their best interest' should explain why investors sold tech stocks or housing when they were in bubbles. Surely, it wasn't in the best interest of tech bulls to sell. Selling meant prices would fall, thereby damaging the value of tech stock positions. But they sold aggressively, because they perceived it to be in their best interests. The situation of foreign creditors holding an unpayable mountain of debt of a trading partner is a classic 'prisoner's dilemma.' A prisoner's dilemma is a situation in game theory in which two parties might not cooperate even if cooperation is in their best interest. China and Japan might both conclude that buying more US Treasuries is not in their best interest. If they both stop buying at the same time, prices will fall and yields will rise. This scenario, by the way, is the reason that the responsible American public is opposed to Keynesian deficits as far as the eye can see. Just because Keynesian pro-deficit policies plug a theoretical hole in 'aggregate demand' doesn't mean they are sustainable or wise. The public understands that Keynesian deficits are unsustainable. The cumulative effects of these deficits - which are never offset by surpluses during the good times - ultimately destroy confidence in both the government bond market and the currency. When the Japanese government hits the debt wall in the next five years and Japanese bond yields spiral upward, it will prove the foolishness of Keynesian policy. Here is where the existing stock of US Treasuries comes into play. Japan already owns $750 billion worth of Treasuries. When the Japanese government hits the debt wall and yields rise, the Bank of Japan will likely print new yen [i.e. quantitative easing] to fund the government. If so, the value of the yen could collapse, which would force the Japanese Ministry of Finance to sell some of its $750 billion in US Treasuries in order to defend its currency. It remains to be seen how long the government and the central bank can keep savers involved in this Ponzi scheme. This scenario - if Japanese savers abruptly lose confidence in their government's ability to service its massive debt load with taxes and bond market proceeds - is how Japan could shift quickly from deflationary conditions to hyperinflation. Japan is several years ahead of the US in the transformation of its government bond market into a Ponzi scheme, so we should consider it a canary in the coal mine. Aside from Japan, the appetites of two other huge Treasury investors are waning. The Chinese are rolling their maturing notes and bonds into buying shorter maturity bills. And the [U.S.] Social Security trust fund is not far from being in the position where it's a net seller - rather than a net buyer - of Treasuries. With unemployment stubbornly high, less payroll taxes are flowing in. With lower payroll tax inflow in 2010, the trust fund has less of a surplus to invest into Treasuries. When demographics switch the trust into a deficit position, it will become a net seller, rather than a buyer, of Treasuries. All of these factors argue convincingly for rising Treasury yields in 2010 and 2011. The consensus does not seem concerned about these factors. As of Jan. 20, the FTSE NAREIT Equity REIT Index yields 3.72%. This is roughly equal to the 3.64% benchmark 10-Year Treasury yield. Over the past 20 years, the average spread of the NAREIT index over Treasuries was 100 basis points, or 1%. Removing the influence of the 2005-2007 REIT bubble takes the historical average spread closer to 300 basis points over Treasuries. So not only are REIT valuations at risk from rising Treasury yields, they're also at risk from rising spreads over Treasuries. Considering that REITs are in a prolonged post-bubble environment, it's reasonable to assume that REIT spreads over Treasuries will rise to 300 basis points or more. Assuming both factors - rising Treasury yields, a rising spread of REIT yields over Treasuries - the REIT index could easily fall 50% from current levels." - Dan Amoss
CFA and managing editor for 'Strategic Short Report'. This article was published February, 2010.
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[Quote No.33203] Need Area: Money > Invest
"Before you mount [invest], look to the girth [safety]." - Dutch Proverb

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[Quote No.33205] Need Area: Money > Invest
"[When the yield curve is steep, this is usually positive for the economy as banks borrow short and lend long. The yield curve can become very steep however, which is not good for the economy, if the reason why is that bond investors at the long end of the curve, demand higher rates because, while they don't fear high inflation which also demands high rates, they do fear the government may default on their bonds and they therefore wish to be compensated for this risk. Also the very high long term rates lower credit demand, as few can afford to borrow. This reduces the GDP growth and therefore government taxes and their ability to survice their debt. Also high long term interest rates demands higher share market earnings yields and lower price earnings multiples from rational investors who could simply invest in higher yielding bonds rather than take the share market's risk. The following article examines this danger of government over-spending and over-borrowing risking bond deratings and defaults.] If the U.S. economy grows anemically, already stretched government finances will be crimped, potentially putting downward pressure on the top Aaa U.S. rating, said Moody's Investors Service on Wednesday. 'Economic growth is very important to our assessment (of the sovereign rating),' said Steven Hess, senior credit officer in the sovereign risk group with Moody's Investors Service in New York. The Obama administration has based its projections of reducing the budget deficit over time on solid economic growth forecasts, but Hess warned that productivity might be lower than before the global financial crisis. 'Right now we are semi-optimistic that the U.S. will regain its previous dynamism, but if it doesn't, then we have to think about what that implies for government finances,' Hess said in a telephone interview with Reuters. 'The implications would not be good if the U.S. were in for anemic growth for some time to come because the government could have problems for revenue growth,' Hess added. The White House projects that the budget deficit for the fiscal year ending Sept. 30 [2010] will amount to 10.6 percent of gross domestic product, the highest level since World War Two. The White House predicts deficits will fall to 3.9 percent by 2014, still above the 3 percent of gross domestic product that economists consider sustainable. Hess warned that U.S. households balance sheets 'need to be improved and this will take some time' as Americans reduce high debt levels in the aftermath of the financial crisis and prolonged recession. That process will put a ceiling on consumer spending and potentially restrain growth, he said. If the Obama administration's budget projections for rising interest payments on government debt are realized, 'at some point, we don't know when, there would be downward pressure on the U.S. rating,' Hess said. In the budget, the U.S. economy is projected to expand by 2.7 percent in 2010, accelerating to an above-average 3.8 percent in 2011 and rising above 4 percent for the following 3 years. 'We think that either economic growth has to be much more vigorous than the administration is assuming so that revenues would be higher or they need to do something further to increase revenues or cut expenditures,' Hess added. Although systemic risks in the banking system are starting to abate, Hess said, the reluctance of banks to lend may still constrain U.S. growth. 'The financial system itself is perhaps more conservative in its willingness to give credit to the economy. That, combined with lower consumption growth, indicates that maybe the economy will not be so dynamic in the next few years,' he said." - John Parry
Financial journalist. Published 3rd Feb, 2010, Reuters. (Additional reporting by Dena Aubin, Andy Sullivan, Alister Bull and Jeff Mason; Editing by Kenneth Barry)
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[Quote No.33221] Need Area: Money > Invest
"[An inverted yield curve suggests that bond investors, often considered the smartest investors in the market, believ that a recesion is near and that short and long-term interest rates will fall, so they buy at the long end because the capital gains on those bonds as interest rates fall while the payments from those bonds will stay the same, will be worthwhile. This long end buying demand drives the prices up and the yield down. Here's some information that confirms the belief about inverted yield curves.] When Fed Chairman Alan Greenspan and his merry band of policy makers decided to engage in a campaign of 'measured' rate hikes last June [2004], most, if not all, economic talking heads were predicting higher mortgage rates in 2005. It's no surprise that short term mortgage rates have shot up. The Fed controls the federal funds rate and other short term rates will follow suit, including adjustable rate mortgages. But long term rates have caught everyone by surprise. Let's take a look at the ten year treasury bond, a good benchmark of long term mortgage rates. On June 30, 2004, the Fed bumped the fed funds rate by 25 basis points, to 1.25 percent. Two days before the move, on June 28, the ten year treasury bond was yielding 4.76 percent. Two days after the move, on July 2, the ten year rate dropped to 4.48 percent. Let's compare the fed funds rate with the ten year treasury at each Fed move: Date Fed Funds RateTen Year Treasury -[11th Aug, 2004] 8/11/04 1.50% 4.30% -[21st Sept, 2004] 9/21/04 1.75% 4.05% -[11th Nov, 2004] 11/11/04 2.00% 4.20% -[14th Dec, 2004] 12/14/04 2.25% 4.09% -[2nd Feb, 2005] 2/2/05 2.50% 4.15% -[22nd Mar, 2005] 3/22/05 2.75% 4.63% -[3rd May, 2005] 5/3/05 3.00% 4.28% While Greenspan has tripled the federal funds rate, long term treasuries have barely moved. This 'flattening' of the yield curve means that long term rates become a better deal than adjustables. What if this trend continues? If Greenspan keeps pushing up short term rates and the market continues to keep long term rates down, we will soon have an inverted yield curve, when short term rates are higher than long term rates. Logically, such a scenario shouldn't happen. Lenders normally would demand a higher return on their money if they are going to guarantee a particular interest rate for a longer period of time because their money is tied up longer. I did some poking around on the internet and found some interesting historical data. In March of 1989, the average yield on the one year Treasury bill increased to 9.57 percent. During the same month, the yield on the ten year note was hovering around 9.36 percent. For the folks who are old enough to remember, 1989 was near the beginning of a recession. Housing faltered and real estate prices dropped in many areas. Home values remained fairly flat for years to come. Then, in 1999 and 2000, the potential for inflation reared its head once again. Chairman Greenspan responded by raising short term rates six times. During most of 2000, yields on short term maturities exceeded those on longer maturities. Following both of these periods of an inverted yield curve came a recession, by most economic definitions." - Unknown

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[Quote No.33241] Need Area: Money > Invest
"The essence of contrarian investment thinking is that when nearly everyone thinks one thing, then they have acted on it and hope it goes that way. So if everyone thinks a situation will get worse then there is a lot of short-selling and the weak hands and short-term traders have already sold their shares and are sitting on the sidelines waiting to get back in at a lower price. Then if things aren't that bad, the shorts rush to cover their shorts and those on the sidelines also try to buy back in, so the share's price spikes up. This thinking is why technical investors follow the bull bear ratio to see when, for example, people are predominantly bearish - that is have already all sold or are short and therefore the situation is ripe for a spike up should the results not be as bad as anticipated." - Seymour@imagi-natives.com

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[Quote No.33257] Need Area: Money > Invest
"A fool must now and then be right by chance. [Therefore only seek advice from time-tested advisors, whose success has been proven to be due to good management rather than good luck:- that is, they have known when to move in and out of the market before the major moves in bull and bear markets and have avoided badly run companies with poor prospects.]" - Proverb

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[Quote No.33263] Need Area: Money > Invest
"I do not believe a man can ever leave his business [or his investments]. He ought to think of it by day and dream of it by night [as the personal cost of maximising your chances of success is steadfast effort and eternal vigilance]." - Henry Ford
He founded the Ford Motor Company.
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[Quote No.33291] Need Area: Money > Invest
"In Poker they call it a 'tell'. A tell is a habit a player has that gives away if he/she is holding good or bad cards. In the movie 'Rounders', John Malkovich's character, Teddy KGB, would eat Oreos by splitting them open and eating the filling first when he thought he had the winning hand. Mike McDermott, played by Matt Damon, picked up on the bad habit and for some reason, revealed his discovery to his adversary, KGB. (only in Hollywood would this happen) In investing, probably the single greatest tell is insider buying. People can say all kinds of stuff, bluffing is easy with a weak opponent or little money on the table. But folks rarely lie with their wallets. Investors would be wise to see which insiders are betting on the companies they run and know intimately. Would you put 10s of thousands of dollars into the stock of a sinking ship? No way, right? [While this is true, it is also important to remember that insiders do make mistakes and lose lots of money sometimes, as well as sometimes trying to trick investors who follow insider buying behaviour.]" - istockanalyst.com

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[Quote No.33292] Need Area: Money > Invest
"[If you are following the advice of someone remember...] You must walk a long while behind a wild goose before you find an ostrich feather." - Danish Proverb

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[Quote No.33329] Need Area: Money > Invest
"[Here is an indicator, along with other leading economic indicators, investors should keep an eye on - especially when trying to tell when a bear market stops and a bull market begins.] The Institute for Supply Management in the US has since 1931 published monthly updates on the inner state of the US manufacturing sector through data compiled from purchasing and supply executives throughout the country. This report has changed name a few times since then, but nowadays it is called The Manufacturing ISM Report On Business. The big discussion among economists worldwide is now whether the monthly updated ISM Manufacturing Index has peaked in the current cycle, or whether it is maybe close to peaking, or not. Why is this so important? Because history shows the index can be used to gauge the performance of equities, not just in the US but globally. For example, last year [2009], prior to the rally from the second week of March onwards, economists and strategists were keeping a close eye on each monthly update of the ISM Manufacturing Index. History had shown that whenever the index had found a bottom, time had come to re-enter share markets, and to do so aggressively. The index had fallen as low as 32.5 in December 2008, after which it had recovered slightly to 35.5 in January. Data from the 77 previous years had taught that at such low levels the accuracy rate for using the index as a leading indicator for equities was 92% over a six month period and 100% over a twelve month horizon – as long as it was certain the index had bottomed and would start a recovery. As it turned out, many thought the January update, released in February, might be the signal that a bottom had been seen. The February update, released in early March, brought more confirmation and the rest, as they say, is now history. The ISM index improved from 32.5 in December 2008, to 35.5 in January, 35.7 in February, further to 36.4 in March and to 40.4 in April. It's probably no coincidence that what started off as a short covering rally in US financials in March, and then managed to continue on low volumes and alongside plenty of scepticism, saw stockbroking clients and funds managers joining the rally with gusto from May onwards. By then a majority of market participants was confident enough the ISM Manufacturing Index was definitely on the road to recovery. Not only does history show that the index recovering from such low levels is a bullet proof leading indicator for the performance of equities in the following year, returns from equities are usually the highest when the index takes off from such low levels. But even then, on historical references the return on US equities should have been somewhere in the vicinity of 27%. Instead, investors (at least those who were smart enough to jump on board the ISM index recovery) received double that. As said before, at its troughs the index is considered a 100% guaranteed early leading indicator. The previous trough occurred in October 2001, which, in hindsight, signalled that equities too would soon reach their bottom for the bear market. Before that, the index bottomed in January 1991, marking again the bottom in the bear market at that time. And investors who had taken guidance from the Manufacturing Index bottoming in May 1982 saw some hefty profits falling into their lap (35% over nine months)." - Rudi Filapek-Vandyck
Editor FNArena. Published March 10 2010.
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[Quote No.33347] Need Area: Money > Invest
"Many studies have shown that countries start having serious growth problems when debt is 90% of GDP (gross domestic product)." - Jim Rogers
Famously successful investor and venture capitalist.
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[Quote No.33354] Need Area: Money > Invest
"You can't catch a cub without going into the tiger's den." - Chinese Proverb

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[Quote No.33375] Need Area: Money > Invest
"Technical investing is to value investing as hugging the shore is to sailing in the open sea." - Seymour@imagi-natives.com

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[Quote No.33380] Need Area: Money > Invest
"When considering the risk of sovereign debt-bond default it is not only important to consider debt-to-GDP and deficit-to-GDP ratios but also interest payments-to-GDP and revenue-to-GDP ratios." - Seymour@imagi-natives.com

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[Quote No.33390] Need Area: Money > Invest
"Every director [and investor] should isolate the top four risks their company [and investment portfolio] faces and should make a realistic assessment of their risk appetite [indicators to monitor and contingency plans]. " - Robert Gottliebsen
Respected Australian financial commentator.
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[Quote No.33401] Need Area: Money > Invest
"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." - Ludwig von Mises
Famous economist from the Austrian School of Economics. Quote from his book, 'Human Action', published 1949.
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[Quote No.33419] Need Area: Money > Invest
"When considering future interest rates and the bond yield curve remember long rates are a forecast of future short rates." - Seymour@imagi-natives.com

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[Quote No.33430] Need Area: Money > Invest
"{The yield curve often flattens when a recession is coming. According to this article it also does this when a country is about to default on its sovereign debt.] There’s lots of attention on the long-end of the Greek debt curve, and rightfully so. That’s where the government needs to get a lot of funding work done in the next couple of months, and yields remain high, surpassing 7.1% at one point Tuesday. But action on the short-end is also gaining a lot of attention. Amid reports of Greek bank selling, short-term Greek bond yields have soared in the past two days. On Wednesday Greek treasury bills with a rough six-month equivalence yielded as much as 6.4%, according to RBS Research. That would be about double what T-bills yielded the morning before and almost six percentage points (or six hundred basis points in Wall Street lingo) more than similar German debt. Later on Wednesday, October 2010 T-bills sported a yield between 5.2% and 5.6%, underscoring the volatility at the short-end of Greece’s government debt market. These are giant yields for short-term government debt, especially in the euro-zone. They are signaling one of two things: A looming default or a great buying opportunity. In anticipation of a default, the yield curve flattens abruptly with short-term yields rising rapidly to match the higher yields for long-term bonds. Long-term bonds already reflect, at least in part, the default debate. It’s when that debate moves closer to reality that the short-term debt suddenly transforms from relatively safe to very risky, driving yields sharply higher as prices, which move in the opposite direction of the yield, plunge. Is Greece about to default? Hard to say, but it seems more and more likely that Athens will have to tap the EU-IMF aid package sometime soon." - Dave Kansas
Wall Street Journal Blog, published 7th, April, 2010.
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[Quote No.33434] Need Area: Money > Invest
"Australia’s foreign debt (as opposed to sovereign debt)... is the product of our current account deficit, which is caused by us borrowing from the rest of the world year in and year out to fund our living expenses. Because it is not an expense of the government, it is not sovereign debt. This debt sits in the commercial banking system, mostly with the big four Aussie banks. The threat of the banks not having their loans renewed in the European interbank system was the nightmare that confronted the government in the darkest days of the GFC. There was the real threat that one of the big four banks would have gone insolvent over one particular weekend if the government had not stepped in. That is why the government, that gloomy and dangerous Sunday 12 October 2008, gave our banks a blanket government guarantee. The guarantee was needed to allow the debt to be rolled over and to avoid economic Armageddon. Before we blame the banks, we need to remember that the cause of the crisis was all of our debt built up over years in order to buy more from the rest of the world than we sell to it. The banks were just the vehicle to get the money from foreigners to us." - Mark Carnegie
Head of the Lazard Australian Private Equity business.
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[Quote No.33436] Need Area: Money > Invest
"It’s easy to end up with a small fortune in the stock market...just start with a large fortune [and little knowledge, interest or time to follow what is happening and what methods are working and wait]!" - Seymour@imagi-natives.com

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[Quote No.33450] Need Area: Money > Invest
"Every successful investor knows the key characteristics attached to solid long term investments: you pick a good company that is managed well and operates in a growing market, preferably with low competition, no government interference and with pricing power – all that plus you buy in at an attractive entry point. Especially that last element is often - too often - forgotten by investors too eager to demand their piece of the share market action. Most international stockbrokerages and investment bankers have a dedicated team of value seekers in-house. These teams often operate under the label of 'quantitative research'. In essence, what these specialists do is try to find opportunities in a market where general attention most of the times goes to where day-to-day share market momentum is pointing at. The question that is continuously waiting for an answer is: are there still opportunities out there that have for whatever reason thus far escaped the attention of (most) investors? Often you'll find that the opportunities discovered come with two key characteristics: a cheap valuation and a yet to be discovered outlook for strong earnings growth. The combination seems odd because why would a company with a strong earnings outlook be cheaply valued? That doesn't seem like a particularly smart thing to do. In practice, however, this is a rather common occurrence as the share market moves through hypes and concerns and overall attention is more often attracted by what is moving up strongly this very moment. Take ANZ Bank ((ANZ)), for instance. On present consensus forecasts, ANZ is expected to grow its cash earnings per share by more than 19% this year and again by more than 19% next year, yet between mid-October and mid-February few investors seemed to genuinely care. Admittedly, market forecasts have improved since last year, but not by that much. Yet during that period the shares drifted from $25 to close to $20. They have now rallied back above $25 – that's a gain of more than 20% in seven weeks only. So what has made the difference? Investor perception, mostly. Uncertain about how solid exactly the global recovery story would turn out to be, investors sought refuge in the big banks with a clear domestic focus: Commbank ((CBA)) and Westpac ((WBC)). ANZ and National ((NAB)) who both carry a more international flavour were left behind as a result. As confidence increased that the world economy can recover without continuous government support, investors started to look at ANZ shares from a different perspective. All of a sudden what had appeared cheap, but for a good reason, now looked cheap and for a very wrong reason. All of this seems very straightforward, and oh so logical, and easy, except, of course, that it isn't." - Rudi Filapek-Vandyck
Editor FNArena
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[Quote No.33451] Need Area: Money > Invest
"Banks lend you an umbrella when it is sunny and then demand it back when it starts to rain! [So be very careful borrowing to spend or leveraging to invest on margin.]" - Business maxim

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[Quote No.33452] Need Area: Money > Invest
"[When investing...] You have three choices: yes, no, or too difficult [and often 98% are too difficult to value]." - Charlie Munger
Lawyer, highly successful value share investor and business partner of the famed value share investor, Warren Buffett.
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[Quote No.33453] Need Area: Money > Invest
"After a recession, businesses need to increase their loans due to a number of things. For example: -1- to increase working capital as sales increace but payment time may lengthen from one month to two so twice as much receivables may need to be carried; -2- to increase the run down inventory of stock; -3- to increase productive facilities while prices are suppressed; -4- to increase advertising to increase market share; etc." - Seymour@imagi-natives.com

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[Quote No.33460] Need Area: Money > Invest
"What drives Fed[eral Reserve] policy is inflation and inflation expectations and these in turn relate to the degree of slack in [capacity utilisation in] the economy. [Rosenberg argues that what happens to the level of US prices is a much bigger driver of US bond yields than government deficits. His analysis shows that bond yields only have a 39 per cent correlation with budget deficits, and only a 33 per cent correlation with commodity prices. In contrast, bond yields have a 64 per cent correlation with the headline inflation number, and a 75 per cent correlation with the core inflation figure (which excludes food and energy). But even more importantly, bond yields have an 88 per cent correlation with the monetary policy of the US Federal Reserve. And this, according to Rosenberg, relates back to inflation.]" - David Rosenberg
chief economist and strategist of Gluskin Sheff
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[Quote No.33465] Need Area: Money > Invest
"[When Steve Forbes of the Forbes magazine asked why he didn't engage in things like short-selling, he replied...] You know, why would you want to take a bet, Steve, where your maximum upside is a double and your maximum downside is bankruptcy? It never made any sense to me, so why go there?" - Mohnish Pabrai
Famous value share investor and fund mamager.
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[Quote No.33466] Need Area: Money > Invest
"Well the best thing for an individual investor to do is to invest in index funds. But even before we go there, you know, Charlie Munger was asked at one of the Berkshire annual meetings by a young man, 'How can I get rich?' And Munger's response was very simple. He said, 'If you consistently spend less than you earn and invest it in index funds, dollar-cost average,' because you're putting in money every paycheck, he said, 'that in, what, 20, 30, or 40 years, you can't help but be rich. It's just bound to happen.' And so any individual investor, if they just put away 5%, 10%, 15% of their income every month, and they just bought into the low-cost index funds, and just two or three of them, to split it amongst them--you're done. There's nothing else to be done. Now if you go to active managers, the stats are pretty clear: 80% to 90% of active managers underperform the indexes. But even the 10% or 20% who do, only one in 200 managers outperforms the index consistently by more than 3% a year. So the chances that an individual investor will find someone who beat the index by more than 3% a year is less than 1%. It's half a percent. So it's not worth playing that game." - Mohnish Pabrai
Famous value share investor and fund mamager.
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[Quote No.33467] Need Area: Money > Invest
"[Here’s what Whitman considers 'value' for various types of businesses:] --Financial Services: book value --Small Banks: 80% of book value --Insurance: adjusted book value --Real Estate: independent appraisal value --Operating Companies: 10 times peak earnings or less than net asset value --Technology Companies: less than 10 times peak earnings, 2 times revenues, more cash than liabilities." - Marty Whitman
legendary value investor of the Third Avenue Funds
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[Quote No.33468] Need Area: Money > Invest
"Having worked on the 'sell side' [providing share price targets for brokers and their clients], we can assure you that the pressures to be bullish [optimistic about higher prices] at all times is intense." - David A Rosenberg
Chief Economist & Strategist Glushkin Sheff
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[Quote No.33470] Need Area: Money > Invest
"Markets hit tops or bottoms when almost everyone shares the same opinion... When it comes to market opinion, the majority is usually right and investors should generally move with predominant view in the short term. However, when majority opinion starts to become overwhelming - say less than 20% of investors are bullish or bearish - then herd behavior has taken over and it's time to think about stepping aside. At extremes there is no one left to buy or sell, so there is no more fuel left to propel the market in the direction that it has been going." - Daryl Montgomery

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[Quote No.33474] Need Area: Money > Invest
"When inflation increases, monetary policy often tries to increase the value of the currency in order to reduce the costs of imports and therefore reduce the pressure on 'imported' inflation. Countries can do this by increasing their exchange rate - ie if their currency is pegged to say their major trading partner's currency or the U.S. dollar, or increasing domestic interest rates to encourage foreign funds that then drive up the demand for the currency and thereby the exchange rate. Increased interest rates also act to reduce domestic demand as more money goes to service loans rather than to buy more things, fewer people borrow and saving becomes more rewarding." - Seymour@imagi-natives.com

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[Quote No.33476] Need Area: Money > Invest
"[Few investors realise media reporting is often used by governments in power for political and economic ends rather than to just to give unbiased facts to individuals so they can then make their own informed decisions. Here is one example. At the time of the 1987 Black Monday share market crash, the media baron, Rupert Murdoch, was in Melbourne looking over two newspaper additions to his global media network – the then separate Herald and Sun mastheads. As news of plummeting stock values broke, so journalistic lore has it, Murdoch leant heavily on his editors, both here and around the world to put a more positive spin on economic data.] 'I've spoken to [U.S.] President Reagan,' [he purportedly told them.] 'He agrees we have a responsibility to talk the market back up.' [While this manipulation of public opinion can sometimes restore confidence in the market, it has often resulted in uninformed investors being encouraged to invest in overpriced markets against their best interests. So always be wary of following the crowd, think for yourself, check the 'facts' and remember caveat emptor - buyer beware - sellers are not trying to make you money.]" - Rupert Murdoch
Media baron. Quote from the time of the 1987 Black Monday share market crash.
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[Quote No.33488] Need Area: Money > Invest
"Their is nothing so terrible as activity without insight." - Johann Wolfgang Von Goethe

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[Quote No.33492] Need Area: Money > Invest
"[This comment gives greater insight into indicators that investors interested in global trade should consider:] Why would the Baltic Dry Index (BDI) fall if the world's economy is really recovering? After all, growth should be accompanied by an increased demand for ships to transport iron, coal, fertilizer, and other commodities. The answer is that the BDI is heavily weighted to the cost of leasing the large Cape ships, the ones that are too large to squeeze through the Panama Canal and, therefore, must go round the Cape. Traditionally, Capes carry huge iron loads. Capes have their own 'index', the Baltic Cape Index (BCI), which tracks their spot rates. Both the BDI and BCI have performed poorly. In contrast, smaller vessels, the Panamax, Supramax, and Handimax size ships, have been in far greater demand. Their indexes, the BPI, BSI, and BHI respectively, have performed far better than the BDI and BCI. That's because fertilizer, coal, grains and other commodities that are shipped on smaller boats have been strong. In addition, China has been importing its iron increasingly from India which cannot handle the larger Capes in its ports. (China is cutting back on its Australian iron in order to negotiate lower ore rates.) In fact, the market for these smaller Panamax and Supramax vessels has been higher than those for Capes. Witness how robust the charts are for the BPI, BSI, and BHI. The Baltic Dry Index this year hides the bull market in smaller dry bulk ships. Relying on the BDI has missed the incredible growth in world trade. It is critical to look at the other 4 dry bulk shipping indexes to gauge trade. Buying and selling GNK, DSX, EGLE, SB, or any other stock on the BDI's moves will miss the real story." - Stephen Rosenman
14th April, 2010
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[Quote No.33496] Need Area: Money > Invest
"Our doubts are [sometimes] traitors and make us lose the good we might win, by fearing to attempt." - William Shakespeare
(1564 - 1616), British poet, playwright and actor.
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[Quote No.33509] Need Area: Money > Invest
"In most periods the investor must recognize the existence of a speculative factor in his common-stock holdings. It is his task to keep this component within minor limits, and to be prepared financially and psychologically for adverse results that may be of short or long duration." - Benjamin Graham
The father of stock analysis and value investing. From his famous book, 'The Intelligent Investor'.
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[Quote No.33511] Need Area: Money > Invest
"Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down." - Warren Buffett

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[Quote No.33514] Need Area: Money > Invest
"When you go in search of honey you must expect to be stung by bees [occasionally]." - Kenneth Kaunda

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[Quote No.33519] Need Area: Money > Invest
"I believe the only things that really matter in investing are the bubbles and the busts. [The aim should be to catch the bubbles early and then ride them till just before they bust! That involves an understanding of business cycles, quality, value and growth.]" - Jeremy Grantham
Highly respected chief investment strategist at Grantham Mayo Van Otterloo & Co [GMO].
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[Quote No.33542] Need Area: Money > Invest
"No one ever tells you that in the history of this world, far more stocks have eventually gone to zero than have survived to the current day." - Robert Prechter

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[Quote No.33551] Need Area: Money > Invest
"In any market, there is always a bear opinion and there is always a bull opinion. This explains why there is a buyer for every seller and vice versa, and why markets do not go up or down smoothly. Your focus, however, should be on companies with underlying value, their management teams, their debt positions, and growth opportunities." - Seymour@imagi-natives.com

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[Quote No.33553] Need Area: Money > Invest
"The only people who never fail are those who never try." - Ilka Chase
(1905 - 1978), American author and actor.
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[Quote No.33554] Need Area: Money > Invest
"Every one of my failures in investing brought me closer to that sweet smell of success. Just learn from each one. Humility builds character through hardship." - Charles Munger
Self-made billionaire lawyer, share investor and property developer. Close friend and business partner of famed value share investor, Warren Buffett.
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