Can Bill Ackman Do It Again With Agilent???

Trading is nothing but a numbers game…you hope your loses are smaller and hope your winners are much larger than your loses.  Take the billionaire, Bill Ackman of Pershing Square.  The hedge fund’s returns fell 4% in 2017, dropped 13.5% in 2016 and declined 20.5% in 2015, but lets look at some of his recent winners.

A year ago, billionaire, Bill took a $1 billion size position in home improvement Lowe’s because he thought there were opportunities to improve its supply chain to serve customers better and enhance the customer experience through strategic brands and differentiated in-store experiences.  I personally thought Bill was going to take another lost, but boy was I wrong. Bill got in the stock in May of 2018 and thus far that $1 billion is now worth $1.3 billion, a nice paper profit of $300 million thus far.

But Bill’s bigger win was in Chipotle.  Back in 2016, Bill’s Pershing Square bought almost 10% of the shares.  Bill thought Chipotle had a strong brand, differentiated offering, enormous growth opportunity, and was undervalued.

The following year Chipotle hired a new CEO, Brian Niccol.  At Taco Bell, Niccol was known for food menu innovation as well as driving technological advancements to the customer ordering process.  Under Brian’s leadership, digital sales quickly grew as Brian had hoped is that more and more customers will skip other eateries and just order their food at Chipotle.  And then a year later, Brian introduced a loyalty program.

And look what the stock has done since 2016….WOW.

And Chipotle is the gift that keeps on giving as Chipotle made up of 14% of Bill’s hedge fund returns of through mid-2019.

In the most recent news, Bill bought 2.9 million shares in Agilent Technologies on Monday. Agilent provides application focused solutions to the life sciences, diagnostics, and applied chemical markets worldwide.  Essentially Agilent is a lab testing equipment maker.

Billionaire investor William Ackman’s hedge fund Pershing Square Capital Management said Monday it bought shares in testing equipment company Agilent Technologies Inc, only its second new investment this year as the fund has reported a 51% return.

Agilent Technologies’ stock price jumped nearly 5% in after-hours trading after Ackman’s investment was made public in a regulatory filing. Ackman’s $7 billion fund earlier in the year bought Berkshire Hathaway Inc shares.

The filing did not say whether the Agilent investment will be active or passive, and Ackman’s spokesman declined to comment. The filing showed that Pershing Square owned 2.9 million shares at the end of September and did not say how big the position is currently. At Monday’s stock price, that stake would be worth $246 million.

Source

The fact that Bill and Warren Buffett own Agilent, something must be up. I really like the monthly demand near $60, but something tells me price isn’t going to get there anytime soon.

But there is also a great level at the weekly demand at $70 to go long as well.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Brave and EOS…Going In Opposite Directions

Brave is a decentralized,
open source browser that puts the user first by making online privacy its first
priority.  Brave also claims to be twice
as fast as Chrome on desktop and eight times faster than Safari on mobile.

The man behind the Brave
browser is CEO, Brendan Eich.  Brendan
started his career at Netscape Communications Corporation in April 1995 with
the intent to put Scheme “in the browser.” In early 1998, Brendan co-founded the Mozilla
project. And his most recent initiative was creating the Basic Attention Token (BAT), a cryptocurrency
designed for use in the Brave browser when users view and share in the ad revenue.
In the ecosystem, advertisers will give publishers BATs based on the measured
attention of users. Users will also receive some BATs for participating. They
can donate them back to publishers or use them on the platform

If you don’t care for the
ads, the Brave browser has an inbuilt ad and tracker blocker. The blocker
inhibits trackers from learning more about a user for monetization purposes.
But Brave is trying to fix the internet by improving the ad model.  In the words of founders of Brave “It is a
market filled with middlemen and fraudsters, hurting users, publishers and
advertisers.”  And Brave’s mission of
fixing the internet ad model is gaining traction.

Brave Browser is experiencing robust user growth, gaining another 1.7 million active users over the last three weeks by carving out the privacy niche from Google Chrome.

Since its 1.0 launch mid-November, Brave announced that the open source browser had gained another 1.7 million monthly active users, growing by 19% across all devices. Compared to last year, the numbers are even stronger. The browser’s userbase saw a two-fold increase in monthly active users and tripled its daily active users to 3.3 million.

As of today, verified content creators on the platform increased to over 340,000. The majority of these creators publish to YouTube (229,00), followed by Twitter (37,000), business and personal website publishing (38,000), and Twitch (18,000), among others.

Source

A nice level to potentially go long on the BAT is at the daily demand at $0.14.

The EOS blockchain was developed with the aim of facilitating efficient and scalable decentralized applications (dapps). The blockchain includes an operating-system like set of services and functions that works similarly to the ethereum platform.

Despite EOS being the world’s seventh-largest blockchain by market cap, my first issues is who in the hell has a year long initial coin offering (ICO)…which raised $4.1 billion in crypto for Block.One. My initial thought was they better deliver due to all the hype.

EOS works on an ownership model whereby users own and are entitled to use resources proportional to their stake, rather than having to pay for every transaction. So, in essence, if you hold N tokens of EOS then you are entitled to N*k transactions. And herein lies the issue.

EOS network’s governance issues continue to haunt them as Weiss Ratings recently downgraded the network from B category to C-. Weiss Ratings also posted a Twitter thread explaining why they had to downgrade the project which was once hyped as “Ethereum Killer.”

Weiss Ratings in its tweet claimed that although the public sentiment was right behind the project in its hayday and the platform was known for being a fast, efficient and most important a decentralized ecosystem. However, in the past year, there has been a continuous decline in the decentralization aspect where major whales control the majority of the token flow which could be of a deep concern.

Weiss Ratings claimed that the top 100 EOS token holders who represented a meager 0.01% of the total token holders on the platform, has a whopping 68% of the voting power on the network. This means these whales can easily manipulate the network as per their will.

Source

And now EOS block producers and developers devoted to building decentralized apps (dapps) are making little or no money from contributing to the health of the ecosystem. EOS Tribe even wrote about his experience on Steemit. They cited it’s longer possible to earn funds for maintaining the blockchain without support from major EOS whales.

Thus the chart suggest EOS is headed to the monthly demand at $1.00.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Warren Buffett’s Holy Grail Investment Strategy

The other day, I revealed why Warren Buffett is so success.  So, if you want to emulate Buffett’s successful, just buy companies that pay dividends and buy back their stock.  Did you know financials almost make up 50% of Berkshire Hathaway’s portfolio.  So if you really want to emulate Buffett’s success, just buy financial stocks.

Berkshire’s 8 biggest
positions in financial stocks going back to the third quarter were:

Bank of America Corp.
(BAC), $25 billion,

American Express Co.
(AXP), $19 billon,

Wells Fargo & Co.
(WFC), $18 billion,

U.S. Bancorp (USB), $6.7
billion,

JPMorgan Chase & Co.
(JPM), $6.2 billion,

Goldman Sachs Group Inc.
(GS), $3.6 billion,

Bank of New York Mellon
Corp. (BK), $3.4 billion,

Moody’s Corp. (MCO), $5.1
billion

The word “dividend” tends
to have this calm, soothing effect on investors because you know the company
offering dividend has a profitable and viable business model so in good times
and bad times, you can sleep better at night and dividends act like compound
interests if reinvested to grow ones portfolio exponentially.   For example, Wells Fargo and Bank of America
are set to bring in more than $1.5 billion in dividend income for Buffett over
the next year.  That $1.5 billion is almost
2% of his net worth.

Because I’m on this dividend
discovery journey, highest dividend yielding companies within Buffett’s
portfolio are the following:

Occidental Petroleum
Corporation (8.32% yield), together with its subsidiaries, engages in the
acquisition, exploration, and development of oil and gas properties in the
United States and internationally. The company operates through three segments:
Oil and Gas, Chemical, and Midstream and Marketing. 

The Kraft Heinz Company (5.16%
forward yield) manufactures and markets food and beverage products in the
United States, Canada, Europe, the Middle East, and Africa. Its products
include condiments and sauces, cheese and dairy, meals, meats, refreshment
beverages, coffee, and other grocery products, as well as infant and nutrition
products

General Motors Company (4.30%
forward yield) designs, builds, and sells cars, trucks, crossovers, and
automobile parts worldwide. The company operates through GM North America, GM
International, GM Cruise, and GM Financial. It markets its vehicles primarily
under the Buick, Cadillac, Chevrolet, GMC, Holden, Baojun, Jiefang, and Wuling
brand names

Suncor Energy Inc (4.07% forward
yield). operates as an integrated energy company. The company primarily focuses
on developing petroleum resource basins in Canada’s Athabasca oil sands;
explores, acquires, develops, produces, and markets crude oil and natural gas
in Canada and internationally; transports and refines crude oil; markets
petroleum and petrochemical products primarily in Canada.

Wells Fargo & Company
(3.83% forward yield), a diversified financial services company, provides
retail, commercial, and corporate banking services to individuals, businesses,
and institutions. It operates through three segments: Community Banking,
Wholesale Banking, and Wealth and Investment Management.

STORE Capital Corporation
(3.50% forward yield) is an internally managed net-lease real estate investment
trust, or REIT, that is the leader in the acquisition, investment and
management of Single Tenant Operational Real Estate

United Parcel Service,
Inc (3.34% forward yield) provides letter and package delivery, specialized
transportation, logistics, and financial services. It operates through three
segments: U.S. Domestic Package, International Package, and Supply Chain &
Freight.

Phillips 66 (3.20%
forward yield) operates as an energy manufacturing and logistics company. It
operates through four segments: Midstream, Chemicals, Refining, and Marketing
and Specialties (M&S).

Restaurant Brands International
Inc (3.05% forward yield). owns, operates, and franchises quick service
restaurants under the Tim Hortons (TH), Burger King (BK), and Popeyes (PLK)
brand names.

The PNC Financial
Services Group, Inc (3.02% forward yield). operates as a diversified financial
services company in the United States. The Retail Banking segment offers
deposit, lending, brokerage, insurance, and investment and cash management
services to consumer and small business customers through a network of branches.  The Corporate & Institutional Banking
segment provides secured and unsecured loans, letters of credit, equipment
leases, global trade services, as well as foreign exchange, derivative, etc.

The Coca-Cola Company (2.95%
forward yield)., a beverage company, manufactures and distributes various
nonalcoholic beverages worldwide. The company provides sparkling soft drinks;
water, enhanced water, and sports drinks; juice, dairy, and plant based
beverages; teas and coffees; and energy drinks.

Dividend stocks offer a number of advantages to investors, but I would say the number one reason is best said by Buffett himself.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Unusual Option Activity In Nuance Communications

Nuance Communications, Inc. provides conversational artificial intelligence (AI) innovations that bring intelligence to everyday work and life. The company delivers solutions that understand, analyze, and respond to people – amplifying human intelligence to increase productivity and security. It offers customers high accuracy in automated speech recognition, natural language understanding capabilities, dialog and information management, biometric speaker authentication, text-to-speech, and domain knowledge along with professional services and implementation support.

Nuance Communications, Inc. has this AI tool called Lightning Engine™ that combines voice biometrics and natural language understanding (NLU) that allows consumers to set up a unique voice profile as part of an organization’s account enrollment. When they contact that organization on a voice channel, all they need to do is speak naturally and their identity is confirmed almost immediately.  Many months ago my bank asked me with I wanted to set this up, so instead of remembering a password or a pin, the next time I’m on the phone, all I have to do is speak to confirm my identification.

This isn’t really value added to the bank, well I guess it is in a way.  For example, if people forget their password or pin, well it will take time to reset it, taking away time from other things the bank personnel has to do. 

Here’s a concrete valued added example Nuance Communication products offer. 

Police officers face unique reporting challenges. For instance, they can spend an hour or more typing up a single incident report. For police sergeants, paperwork can consume up to 45 percent of the workday. Heavy documentation demands can impact the timely filing of reports, limit community visibility, and even put their safety at risk. There is a better way.

Ensure timely filing of incident reports. Eliminate the need to decipher handwritten notes or try to recall details from hours before. Officers simply speak to create detailed and accurate incident reports, 3 times faster than typing and with up to 99% recognition accuracy – all by voice.

Source

Several weeks ago, Nuance Communication Inc. reported their fourth quarter earnings which beat expectations.  The company reported net income of $108.1 million, or 37 cents a share, compared with a loss of $35.1 million, or 13 cents a share, in the year-ago period.  In addition, revenue rose to $487.8 million compared with $479.4 million in the year-ago quarter.

The company’s stock is up more than 20% for the 3rd quarter and more than 50% for the year.   However, the Smart Money thinks there is more room for the stock to run. As they bought call options that expire in January,

and longer term call options in April.

If the Smart Money is going to be right, price must first get through the weekly supply at $18.50.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Two Gems Within The Data Center REIT Sector

Software as a service (SaaS) aka THE CLOUD is a business model in which software, centrally hosted, is licensed on a subscription basis and is centrally hosted.  One force driving these companies’ growth is soaring demand for data centers to support cloud computing.

And it doesn’t matter what size company you have:

*Start-ups – an idea / viable business model can get up and running quickly with minimal capital and operating cost.

*Small to medium-sized businesses – can take advantage of the scalability in storage and networking capabilities on demand as their business grows.

*Larger business – can help increase operational efficiency, productivity and agility.

REITs are companies that own or finance some type of real estate property. During economic troubled times, Smart Money rotates into REITs because they act like bonds, meaning the stock dividends are equivalent to coupon rates, the yield paid by a fixed-income security.

The data center REIT sector is relatively new compared to other REITs. Salesforce was an early pioneer of moving their CRM services to the cloud in the early 2000s. The company’s founder, Benioff’s vision was that software should be delivered 24/7 to people over the cloud.  Most data center REITs were founded around 2000 and make up a small percentage of REITs overall.

As data becomes an integral part of everything we do, data center real estate investment trusts (REITs) have become more important. 

The data center REIT sector is relatively new compared to other REITs. Most data center REITs were founded around 2000.  This was the around the same time Salesforce migrated its services to the cloud in the early 2000s. The company’s founder, Benioff’s vision was that software should be delivered 24/7 to people over the cloud.  Now Salesforce shares the cloud pie with Apple, Amazon, Facebook, Google, and Microsoft who have huge appetites for access to data centers.  These companies are building their own data centers, but because of the demand, are turning to data center REITs to fill that void.  But it’s also financial services, insurance and retail companies that are shifting from owning and operating their own data centers to third-party data center operators.

The relentless growth of wireless data, public cloud, digital content, social media, and ecommerce continues to fuel the need for more data center space.  The beauty of data center REITs is that their growth isn’t dependent on consumer spending, population growth or unemployment like traditional REITs.  And might I add, the Trade War between the US and China has not barring on data REITs growth.  

Two companies that I want to give some shine to are QTS Realty Trust and CyrusOne.

Image result for QTS Realty Trust, Inc. logo

QTS Realty Trust, Inc. (NYSE: QTS) is a leading provider of data center solutions across a diverse footprint spanning more than 6 million square feet of owned mega scale data center space throughout primarily North America and Europe. Through its software-defined technology platform, QTS is able to deliver secure, compliant infrastructure solutions, robust connectivity and premium customer service to leading hyperscale technology companies, enterprises, and government entities. QTS owns, operates or manages 26 data centers and supports more than 1,100 customers primarily in North America and Europe.

The chart suggests it’s not a buy yet, as price is just below the monthly supply at $55.

Image result for CyrusOne logo

CyrusOne (NASDAQ: CONE) is a high-growth real estate investment trust (REIT) specializing in highly reliable enterprise-class, carrier-neutral data center properties. It’s America’s third largest data-center provider and its solutions allow customers take advantage of cloud platforms such as Amazon Web Services and Microsoft Azure.

The Company provides mission-critical data center facilities that protect and ensure the continued operation of IT infrastructure for approximately 1,000 customers, including more than 200 Fortune 1000 companies. 

In 2018, CyrusOne have the most data center properties under construction in the U.S., at six and had the most preconstruction data center development properties at 24.

The chart suggests to go long at the monthly demand at $56.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Utilities Companies That Can Make You Paper

There are many investing strategies out there in the financial world.  One such strategy is the dividend investing strategy. This strategy is very simple and entails buying and holding companies that pay good, quality dividends that will hopefully turn into passive income.  And if those companies are able to grow their dividends that outpace inflation over time, well that just means more passive income for you.   

Image result for Dividend Aristocrat

Case in point, prior to today, I didn’t know what a Dividend Aristocrat was. Nevertheless, a Dividend Aristocrats are companies that have increased their dividend payouts for 25 consecutive years or more.  They are the ‘best of the best’ dividend growth stocks.

This year, one of the strongest sectors have been Utilities.  During economic troubled times, Smart Money rotates into Utilities because they act like bonds, meaning the stock dividends are equivalent to coupon rates. Utilities are usually drowning in debt, but during economic troubled times, interest rates go down, so debt obligations put less of a strain on cash flow and more cash flow means consistent payouts of dividends. And because the barriers of entry are tough in the Utilities sector, so with little competition and residual income, dividends are payout out consistently.

So if Dividend Aristocrats are companies that have increased their dividend payouts for 25 consecutive years or more, what do you call companies that have paid dividends for over 100 straight years?  I have no idea, but if you know, let me know in the comment section. Nevertheless, here are three “whatever you want to call them” Utilities companies that have paid out dividends for over 100 years.

York Water (NASDAQ:YORW)

Image result for York Water logo

The York Water Company impounds, purifies, and distributes drinking water.  It serves customers in 39 municipalities within York County and 9 municipalities within Adams County, Pennsylvania. The company serves various customers in the fixtures and furniture, electrical machinery, food product, paper, ordnance unit, textile product, air conditioning system, laundry detergent, barbell, and motorcycle industries.  This leads to relatively predictable cash flow, thereby allowing management to ensure that costs don’t outpace revenue. York Water has an incredible streak going of paying out a dividend to investors for 203 consecutive years.

Consolidated Edison (NYSE:ED)

Image result for Consolidated Edison (NYSE:ED) logo

Consolidated Edison, Inc., through its subsidiaries, engages in regulated electric, gas, and steam delivery businesses in the United States. The company offers electric services to approximately 3.5 million customers in New York City and Westchester County; gas to approximately 1.1 million customers in Manhattan, the Bronx, parts of Queens, and Westchester County; and steam to approximately 1,622 customers in parts of Manhattan.

Demand for these products tends to remain relatively consistent and predictable, allowing Con Ed, as the company is known, to forecast its spending and cash flow with confidence. Consolidated Edison has an incredible streak going of paying out a dividend to investors for 134 consecutive years.

UGI Corp. (NYSE:UGI)

Image result for UGI Corp. logo

UGI Corporation distributes, stores, transports, and markets energy products and related services in the United States and internationally. The company operates through four segments: AmeriGas Propane, UGI International, Midstream & Marketing, and UGI Utilities. It distributes propane to approximately 1.7 million residential, commercial/industrial, motor fuel, agricultural, and wholesale customers through 1,900 propane distribution locations; and sells, installs, and services propane appliances, including heating systems and propane-powered generators. 

Further, the company distributes natural gas to approximately 642,000 customers in the portions of 44 eastern and central Pennsylvania counties through its distribution system of 12,300 miles of gas mains; and supplies electricity to approximately 62,000 customers in northeastern Pennsylvania through 2,200 miles of lines and 13 substations. UGI Corporation has an incredible streak going of paying out a dividend to investors for 134 consecutive years.

In the investing world, quick money could lead you to the poor house, at times it great to be the turtle in the race.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Dollar Tree Got Cut To Fifty Leaves

Dollar Tree, Inc. operates discount variety retail stores. It operates through two segments, Dollar Tree and Family Dollar. The Dollar Tree segment offers merchandise at the fixed price of $1.00.

Dollar Tree is the largest dollar chain with over 15, 000 stores.  Dollar Tree has been successful to this point because of their perceived value.  Essentially you pay for what you get and the items are sold in a smaller unit size.  But they have done some clever things as well.  They have kept the items they sell to a minimum, so they have a high inventory turns and stores do required a whole lot footprint and they sell a ton of private label items, which helps their margins.

To compete with the likes of Walmart, they purchased Family Dollar in 2015 to expand their customer base. Dollar Tree caters to people who live in the suburbs, while Family Dollar caters to people who live in urban.   However, Family Dollar really never did their homework prior to the purchase.   Family Dollar customers have a lower income than their suburban counterparts and less likely to make impulse buys because of their budget.  That one major difference between the two customer base has hurt the earnings ever since the acquisition.

Dollar Tree finally recognized the bad business choice they made in 2015 and have since closed over 500 Family Dollar stores in 2019 and will re-brand another 1000 Family Dollar stores to Dollar Tree stores.

Dollar Tree reported earnings on Tuesday. Dollar Tree stock fell 10% on Tuesday after the company posted disappointing earnings results and gave guidance that underwhelmed Wall Street. The trade war between the US and China and the tariffs has hurt margins due to sourcing a large chunk of their merchandise from China. In addition, issues at its Family Dollar brand are pinching the company’s results. Dollar Tree posted earnings per share of $1.08, below expectations for $1.13. Its revenue of $5.75 billion narrowly beat expectations for $5.74 billion.

So where is price heading next, lets go to the charts? Price is clearly in an uptrend, but it would of been nice if prices on the monthly chart closed above the most recently high. Thus, this lowers the probability that price will make a new higher high.

However, the uptrend is an uptrend, until it not. Thus, the chart suggest to go long at the daily demand at $85.50.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Uber Isn’t A Buy At This Point

Uber’s story starts more than a decade ago.  Travis Kalanick and Garret Camp were leaving a tech conference in Paris when they couldn’t get a cab. Initially, the idea was for a timeshare limo service that could be ordered via an app with Garret eventually buying the domain name UberCab.com.

Uber was born in 2009 and New York became its test market with three cars in 2010, with the official launch taking place in San Francisco in May.  Travis eventually came on board as CEO in December 2010 and with time grew to become the highest valued private startup company in the world.

Like many startups, there seems to be a culture of almost “anything goes.”  However, if those startups go grow and mature, it eventually catches up with you.  Uber was a perfect example of that.  In February of 2017, a former female Uber engineer blasted the company for its sexist culture in a 3,000-word blog post citing the culture as hostile, sexist and offensive. The post went viral and resulted in some upper managers being let go and/or resigning.  But that was just the start as an investigation, called the Holder Investigation, soon was underway.  The investigation resulted in over 40 recommendations intended to improve the culture.

Image result for Kalanick Dara Khosrowshahi,

Kalanick stepped down as CEO and two months later announced that Dara Khosrowshahi, CEO of Expedia (EXPE), would take over.  But it was too late, Uber’s valuation declined from $70 billion to $48 billion.  Kalanick did a great job stabilizing the culture and perception of Uber in the financial markets, so in May Uber made it IPO debut with shares set to price at $44 to $50, given the company an immediate $80 or $90 billion market cap.

In 2018, Uber’s revenue reached $11.3 billion for the year, up 43% from 2017, but encountered operating losses of $3 billion.  They even expressed at one point that they might never generate a profit.

Since Uber went public, the stock has declined by near 33% due to concerns of competition and profitability.  In additional, the lockout period expiring was last week, means that insiders, including early investors and employees, are free to sell shares.  Kalanick sold 53.24 million shares worth roughly $1.46 billion. 

So is all the bad news now priced into the stock price, well some folks on Wall Street think so?

Uber Technologies, Inc. (UBER) shares opened sharply higher during Friday’s session before giving up some ground by mid-day. The move came after Stifel upgraded the stock from Hold to Buy with a price target of $34.00 per share.

Analyst Scott Devitt believes that Uber is turning a corner, with signs of sustainable improvements in the fundamentals. He adds that the current valuation offers a more reasonable entry point for interested investors.

Despite these concerns, Barclays analyst Ross Sandler said that Uber was one major announcement away from a positive narrative change heading into the new year.

Source

Now maybe Ube is two major announcements away from a positive narrative change.  Today, London stripped Uber of its license to operate in the city, citing the company wasn’t doing enough to keep passengers safe.  London is Uber’s largest city in Europe with Europe accounting for about 10% of the company’s total revenue.

Personally, I wouldn’t have bite on the upgrade, as I thought it was premature based on what I was seeing on the charts as the chart suggests Uber isn’t a buy until the weekly demand at $34 is breached.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Currency Analysis Report 11/25/19 – Is Thailand Cutting Rates Next???

Exotic pairs usually
consist of a major currency alongside a thinly traded currency or an
emerging-market economy currency, so they are a lot less liquid and prone to
“slippage” which also means they have wider spreads than the majors and the
crosses.  Because of this, exotic pairs
don’t get a lot of shine.

The Thailand currency is
call the Baht. And as strong as the US dollar has been against all the major
currencies this year, the Baht has been stronger than the US dollar. The Thai
baht hit a six-year high against the dollar in September which is making
Thailand exports have become more expensive.  In additional, relationship between Thailand
and China has also left the Thailand business in a bind due to the devaluation
of the yuan in August making Thailand
exports less competitive.  Ultimately
this is hurting the Thailand economy.  Business
leaders are now urging the their government to prioritize curbing or reducing
the value of the baht.

The Bank of Thailand is prepared to use monetary policy if economic growth disappoints, its Governor Veerathai Santiprabhob said.

“In the short term, we are ready to use monetary policy if needed,” Veerathai said Saturday during a visit to Laos. “We are ready to act if growth fails to meet our expectations.”

At the same time, he cautioned against taking the benchmark interest rate below zero, saying that “the key rate shouldn’t be negative, as it will create lots of structural problems.”

Veerathai said the central bank is concerned about baht strength and is monitoring the situation closely as the year-end approaches, because it’s a period that tends to have a high volume of foreign-exchange transactions.

Veerathai said inflation isn’t a big problem for Thailand at present but financial stability risk has become a challenge for monetary policy.

Source

So where is the Baht heading, lets go to the charts to find out?

Monthly Chart (Curve Time Frame) – monthly supply is at 35.750 and monthly demand is at 29.000.

Weekly Chart (Trend Time Frame) – the trend is down.

Daily Chart (Entry Time Frame) – the chart suggests to short price on a pull back if price can to the daily supply at 30.90 with a target just above the top the of the monthly zone.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

What’s Ray Dalio Got Up His Sleeves???

Ray Dalio is the founder,
co-Chief Investment Officer and co-Chairman of Bridgewater Associates, which is
a global macro investment firm and is the world’s largest hedge fund.  Ray Dalio Bloomberg is the world’s 58th
wealthiest person, worth an estimated $19 billion.  Ray Dalio accumulated his wealth because he
thought differently about the Markets.

While at Bridgewater Ray
invented several investment strategies including: Risk Parity, Currency overlay
and Portable alpha. However, the success at Bridgewater was due to Pure Alpha,
which allowed Bridgewater to dabble in almost any asset class it desired, with
the goal of producing a return that was uncorrelated to other markets and All
Weather (commonly referred to as risk parity) which meant to be balanced across
risk exposures.

Risk parity is a conceptual approach to investing which attempts to provide a lower risk and lower fee alternative to the traditional portfolio allocation of 60% stocks and 40% bonds which carries 90% of its risk in the stock portion of the portfolio. The risk parity approach attempts to equalize risk by allocating funds to a wider range of categories such as stocks, government bonds, credit-related securities and inflation hedges (including real assets, commodities, real estate and inflation-protected bonds), while maximizing gains through financial leveraging. According to Bob Prince, CIO at Bridgewater Associates, the defining parameters of a traditional risk parity portfolio are uncorrelated assets, low equity risk, and passive management.

Source

I’m a huge fan of Ray.  Not only is he a brilliant investor, but he is a brilliant teacher as well.  Ray said there are three stages in life.  The first stage is where you are dependent on others (i.e. kid).  The second state is where other are dependent on you (i.e. parent).  The third stage is where you attempt to get those dependent on you to become independent. An example of this third stated was his 2011, self-published “Principles”, that outlines his philosophy of investment and corporate management based on a lifetime of observation, analysis and practical application through his hedge fund.

Some of those principles
include:

  • “If you work hard and think creatively, you can have just about anything you want, but not everything you want.”
  • With fifteen to twenty good, uncorrelated return streams, you can dramatically reduce your risks without reducing your expected returns. The “Holy Grail of Investing.”
  • Individual assets within an asset class are usually about 60% correlated with each other, so even if you think you’re diversified, you’re not.
  • Making a handful of good uncorrelated best that are balanced and leveraged well is the surest way of having a lot of upside without being exposed to unacceptable downside.
  • Look to the patterns of those things that affect you in order to understand the cause-effect relationships that drive them and to learn principles for dealing with them effectively.
  • Don’t get hung up on your views about how things should be because then you’ll miss out on learning how they really are.
  • “In order to be great, one can’t compromise the uncompromisable.”
  • “Make your passion and your work one and the same and do it with people you want to be with.”

Ray made headlines this past Friday, when an article published by the Wall Street Journal indicated his fund was putting on a $1.5 billion bet that global stock markets would drop precipitously by March 2020. In a series of Tweets, Ray responded the following:

 Wall Street Journal spokesman Steve Severinghaus defended the paper’s reporting in a statement to CNBC:

“The Journal’s article is based on interviews with multiple sources and we stand by the conclusions we reported,” Severinghaus said in an email.

“The article does not report, as Mr. Dalio says, that Bridgewater has a ‘net’ bearish position on the stock market. The article made clear that the trade could be a hedge for the firm’s significant long exposure to equity markets, among other possibilities,” he added.

Source

Usually where there is smoke, there is fire and I think Ray has something up his sleeves. With the Markets at all time highs, anything is possible…I guess we will find out within the next three months.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.