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Honest Information, Profitable Trading

Durudarshan - Investment Analysis

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Magnificent, the ECB Stimulus

Posted on January 25, 2015 at 5:08 PM Comments comments (8)
The Trillion Euro stimulus announced this afternoon by ECB President Mario Draghi is nothing less than magnificent in my view, and will help create jobs and industry for millions, and turn into wealth.  This stimulus augurs well for the European stockmarkets and for the Euro itself, which it now underpins with a very positive aspect.  It seems to have been announced at the right time, and although the immediate market reaction may not have been wildly enthusiastic, it is a complex stimulus, needing people to understand and digest its implications.

In plain terms, it is 60 billion Euros per month over 18 months, starting from March to September 2016, meaning a total of 1,080,000,000,000* Euros.  This was announced by Mr Draghi at the press conference in Frankfurt this afternoon.

It will serve the 19 nations that make up the Euro Area, or Eurozone, which now includes as from 1st January 2015 Lithuania.   However, it will not be available at the moment to Greece, which benefits from arrangements already in place from the IMF, which gave them two bailouts and numerous haircuts.  Perhaps there could be cross border mergers of some organisations which would benefit all?

There seems enough appetite for additional funds, especially by companies who have not been able to find funding from the banks so far.  This is a ready segment that will be glad to be served by this Stimulus.  As in England and Britain, where Mr Cameron has been visiting various companies, who have received funding now, something similar needs to be implemented in the Eurozone.  Money invested in companies which need capital for upgrades of machinery, or cash flow to keep the factories operating while their customers arrange to pay them, will maintain employment and sustain livelihoods and, hopefully, even create wealth in the long term.  That 'old school' way of trading had died recently in the credit crunch, and could well do with revival.  It may be the clue to bring Recovery back on stream.


This Trillion Euro Stimulus was long awaited, and probably is just in time, now joining the money flow in the U.S., Japan and China, to maintain the worldwide economic Recovery, which shall flourish to Prosperity for all nations.  The next stage surely must be for the BRICS nations to reduce their benchmark interest rates and for the Emerging Markets to do something similar, in due course to be followed by Africa perhaps?  Or even simultaneously, and soon?  Why not?  The national books can become squared internationally, as each nation develops its resources, trades with the other nations, and brings development and growth at home.  Would that not be the most marvellous thing to happen?


I wish you peace and prosperity, to every nation, man, woman and child.


Kind regards,

Duru-darshan


(c)  Copyright.

P.S. Earlier I left out three 0's.  Aw aw aw!


The macro shifts that could help Recovery

Posted on May 13, 2014 at 3:59 PM Comments comments (12)
The U.S. stock market has recovered and gone beyond where it was at the marking point in October 2008.  I hear that even Lehman Brothers continues to make huge profits today.

The job creation in America last month was a bright number, at 300,000.  My suggestion is if such a number was created for another five months, it would be reasonable to say that the economic Recovery has strengthened significantly. 

No, that would not neccesitate further tapering.  I am of the opinion that Dr Yellen needs to perhaps increase the QE by about $5 billion a month for the foreseeable future, until Recovery is complete. 
At $45 billion a month, there is a shortage for the meantime to fund the social aspect, and cutting would have a similar impact to the dreadful sequestration, when poor students were being sent home because there was no provision for a mid-day meal for them.  (Of course, the wisdom may be to ask them to bring their own lunch and provide them the opportunity for education, and keep them from turning to delinquency).

The U.S. housing market seems to have stabilised, but has still scope for improvement.  While foreign investors and hedge funds will avail themselves of these opportunities, the American households are still holding to wait and see that there is sustained recovery in the jobs market with prospects long-term before they start to buy houses.  I of course would suggest that they should consider now, when rates may be just edging up a little from historic highs and prices remain affordable.


On this side of the pond, in the United Kingdom, the housing market has just become stable.  I don't see much upside this year, in view of cut-backs in social security for housing.  A lot of the estate agents relying on government funding for housing have closed shop; and I see a few landlords putting up their big houses for sale.  The time of easy regular income for landlords seems to be now over.  It may be a good chance for the government to provide housing to deserving people on low incomes if the rents are actually downwards from the recent highs.  That would make sense to the government purse as well as tenants.

Other than that the economy seems to be quite robust, with creation of jobs and employment opportunities for many, together with en masse creation of apprenticeships under the guidance and friendly policies of the Cameron government, which has been one of the most people sensitive government the Tories have formed so far.  The multi-cultural cohesion and contented atmosphere is something to be appreciated. 

The Greeks have got their economy improving, with 10 years Bonds at a yield around 6 percent.  Not many moons ago, the yields were an exhorbitant 30 percent or so.  The generosity of the European Union in bailing them out played a tremendous part in helping this situation to be reached.  All European nations, flowers of the same bouquet, must rejoice.  Spain is also seeing signs of improvement, and now that I hear of KKR looking to fund some Spanish bank, I guess the economy there will start to improve quite rapidly.  The huge opportunity is there, for people who like the good climate and culture, to buy properties there perhaps for retirement, and even start businesses there, which could be a way to create jobs in Spain. 

As governments adjust their policies to allow more immigration, especially to parts which are sparsely populated, more young blood can settle and rejuvenate the economies of the advanced nations.  The ageing populations need looking after, and the young immigrants would be happy to come and work hard and pay their taxes, buy houses, cars, books, TVs, etc, etc.  The economies would pick up.  That will I believe be the second leg of Recovery.

I believe the future is very bright, as Recovery will turn to Prosperity, which could be even within six months.  At least I pray for that.

Kind regards,
Duru-darshan.




Light a candle....

Posted on September 24, 2013 at 5:10 AM Comments comments (1)
The economic news seems pretty positive all round, for continued worldwide economic Recovery.  India of course is out of sync on the benchmark interest rate, but it is a dynamic economy where the leadership are a little bit too cautious to accelerate growth.  For the moment it seems it will just motor along steadily, and blaming the high inflation on the scarcity of onions, which they are plentifully exporting.
 
The Greek economy seems to be on the mend, with a secondary surplus expected. With a nation with a population of 20 million and a large area, perhaps they need to encourage people who enjoy farming.  The potential must be huge with good climate, abundance of water and good weather as well. 
 
The situation in Spain seems pretty positive too, with a growth of 0.2 percent expected for the second quarter.  The benefits of creating jobs and filling up the empty housing, additionally with putting more buses on the roads to service secluded areas more frequently, will surely add to the growth.  Blessed with good weather and friendly people, I believe there is huge potential for continued growth in Spain.
A Latin version of Hollywood and Bollywood must surely be a possibility, with intercontinental co-productions?
 
Germany, well the situation seems so good, with Mme Angela Merkel back in the driving seat.
 
As regards the U.S., the talk of taper seems both promising and cautionary.  As Treasury Minister Jack Lew has suggested, the Debt Ceiling issue needs addressing quite soon.  The talk to me seems like a tapered candle, or a washer to be tapered on a lathe...I suppose Mr Bernanke will suggested what will need to be done.  The debt ceiling fix of a $1.45 Trillion in August 2011 was a job well done, adding to the money supply and creating the cash flow that has translated into so many jobs, a pick up in the housing market, and continued growth in the US economy, creating heatmaps of happiness for so many more people.  The stockmarkets and the banks seem in robust health, creating a huge pool of capital that will service the needs of people as and when they need to borrow and spend.  Cash rich companies like Apple attest to that fact. 
 
What would be great would be perhaps the creation of 500,000 jobs per month on a costing of $7 billion per month.  If that much additional capital was infused into the system by way of the taper, that would be just great.  Five years after the collapse of October 2008, the economic systems seem in much better shape, with strong financial institutions and safeguards in place.  A steady worldwide Economic Recovery seems to have been achieved, through co-operation and understanding of nations and the grace of God.  In celebration and to continue with Recovery, the world counts on seeing the Republicans and the Democrats in Washington support a cordial agreement, and light a new candle to Prosperity.
 
Ladies and gentlemen, you may step up to the alter, and light the candle that will add substance to the drams of humanity.
 
Amen.
 
(written by Duru-darshan)
 

Stockmarket falls, now what?

Posted on August 16, 2013 at 7:09 PM Comments comments (1)
It seemed the stockmarkets had topped, and people were willing to take out some profits.  Equally, it seemed there was fresh money waiting to be invested, especially with promise of low interest rates for the foreseeable future in Europe, U.S., Australia and Japan, as well as China, all of which are using policies to generate further growth. 
 
The weak 0.1 percent GDP growth recorded in the second quarter in Eurozone has certainly helped the preceding period not being classified a recession, but the growth is very weak nevertheless, and demands continued stimulus with low interest rates.
 
The Bank of England's Guvnor Mark Carney has suggested an accommodative policy, indicating a low rate would obtain until such time as the unemployment falls to 7 percent.  This is a mixed blessing, as the government would prefer to see the rate fall faster but at the same time a prolonged period of a low rate is good for boosting the economy, as it generates growth.  All that really remains to be seen is the local banks loan the money out to entrepreneurs, start-ups, traditional small businesses seeking to expand capacity and such enterprises.  Britain's bankers will have to be just as willing to lend venture capital as the reputed bankers across the pond if Britain is to emulate the growth that has been created in the U.S. in the last four years.  As they say, money is inert matter and has life breathed into it when it circulates, giving people a living, fulfilling their dreams, going round and coming back with interest.  That is how wealth becomes created, utilizing what God has given in the form of farming and resources, to which is added human ingenuity and creativity, producing goods and services that have particular value and becoming marketable.  How kind God is, the bankers must appreciate and help the cause of humanity in their endeavours by lending money to them, so they can buy houses, cars, trucks, vans, iPods, cooking utensils, giant TVs, etc, etc.  Surely they would like to see people prosper?
 
The tepid movements in the stockmarkets today seem to suggest that the profit taking or jitters may be over.  Despite continued bad news of clashes in Egypt, the markets were quite stable.  It seems the conference called in Europe next week to address this issue by the European Union is probably likely to consider curtailment of aid to Egypt.  The U.S. has continued in a generous spirit not to have touched on this topic, hoping the situation there will be resolved peacefully in a short period.  Hopefully the Egyptian leadership and the people of Egypt will value this generosity, and try to reconcile their differences and work out a formula to appease both sides and let peace rule in their midst. 
 
People seeing dead bodies being carried to a makeshift morgue were lamenting 'Haram, haram' - meaning they did not expect death when their relatives had just gone to protest peacefully. 
I pray that God inspires the people to listen to the voice of common sense and reconcile their differences, and come to a solution that is just for all. 
 
I pray for peace in Egypt.
 
Ameen.
 
 
 
 
 
 
 

Period of Integration and Accomodative Policies

Posted on July 5, 2013 at 4:54 AM Comments comments (32)
It was fun listening to a talk by Tony Plummer, on the theories of the legendary American investor W.D. Gann, who is fabled to have made over $50 million dollars - a huge amount in the 1950s. 
 
Gann theory, which Mr Plummer has interpreted in his new book The Law of Vibration, suggests that there are four cycles : Shock, which the world saw in 2008, followed by Absorption of Shock, which is supposed to have ended in 2012, followed by Integration, which began in 2012/13 and is likely to take us all in 2015.
 
This period of Integration is typified by what has been confirmed by the new Bank of England Guvnor Mark Carney as well as the ECB Chairman Mario Draghi, that the banks will continue with an accommodative stance with regards to stimulus, i.e. the punch bowl will not be removed any time soon.
 
It would seem that that will indeed become the theme of the coming months and years, at all levels, personal, political, economic, cultural, national and international, according to my reading of the situation.  This is based on the rational trends that are in their infancy on the world stage. 
 
Look at the example of Turkey, where an all-inclusive accommodative stance has stabilised the situation there. 
 
Look at the situation in Egypt, where the military as guardians of the peoples' freedoms and economic well-being are supporting the new Interim President, who is a Chief Justice of many years standing and will follow policies which will benefit a wider democracy.  Here again, an accommodative stance by all people, including the Muslim Brotherhood supporters of Dr Mursi, will win the day, to ensure the smooth running of this great cultural nation, so that trading and tourism continues, and continues to provide the bread and butter which all people naturally need. 
 
In this period of Integration 2012/13 to 2015, an accommodative stance by central banks and political leaders will be the rational ways to continue worldwide economic Recovery, and God-willing peace prevails everywhere, which will then lead to a growing Prosperity. 
 
Please let me have your comments as usual.
 
Kind regards,
Duru-darshan.
 
 
  

The magic of human chemistry.

Posted on June 23, 2013 at 4:50 PM Comments comments (4)
There is something about the chemistry, about the language and communication of the mind and soul, which brings people together or drives them apart.  It is this chemistry between people that I would blame for.....or, rather, a change in the chemistry between people that I would blame for separation and divorce. 
 
I am surprised that Napoleon Hill was not given the Noble Prize, but then again there is no category in the Noble Prizes into which his work fits.  Perhaps, on that point, I would suggest there should be another category created by the Trustees of the Noble Foundation.  The Increasing of Human Understanding.
 
Napoleon Hill interviewed 500 of the most successful people in America in the 1920s, and from those interviews he wrote many articles, published in his Hill's Success Magazine.  But a few people made a huge impression on him, viz Andrew Carnegie, Firestone, Henry Ford, Dr.Alexander Graham Bell, and Dr. Thomas Alva Edison.  And yes, Mr Edwin Barnes, who said it could not be done, that is to say, the writing of a blueprint for success based on the interviews with successful people.
 
Napoleon Hill turned that into a questions: Who said it could not be done? and went on to publish his Think and Grow Rich, a book that sells well throughout the world, in many languages, in number just after the sales of the Bible, Koran and Bhagavad-Gita and other religious masterpieces.
 
In his research, Napoleon Hill says that the first three years of a marriage often have petty squabbles and friction, but the love that exists between the two will carry it through.  The next fifteen years are those in which the lucky couple start to look alike in their eye movements and thinking, influencing their value judgements and expressions, meaning the happy couple have achieved understanding of one another, and a state of harmony exists between them that we attribute to the magic of chemistry.
A state of harmony, an instinctive understanding, an automatic understanding of mutual goals. It is like both have the same road-map, or at least complementing road maps.
 
Those for whom a partnership does not work, it seems are rather like a horse-drawn carriage where the horses want to pull in differing directions.  Where it is not possible to bring harmony of direction, abandonment of the journey becomes the alternative.  Such is what happens in business partnerships as well, and in politics as well.
 
A question that may help bring harmony back is : What was the road map that brought the partners together in the first place?  Can it be modified and restored?  If the answer is Yes, then hope still remains for reunion and success.
 
Kind regards,
Duru-darshan.
 
 
 

Hello Simferopol !

Posted on June 3, 2013 at 4:09 PM Comments comments (3)
Thanks to readers today from Simferopol. I know you are in Ukraine. 
I looked up Simferopol on the internet.  I got a webpage saying "From Russia With Love".
Romantic love is something people like, including me of course. 
I noticed a story about Lynn the missionary getting married to a local brother in your city.
It has the old world kind of air, with blue trams, and people sitting in a church or something
holding orange hymn books or singing a song (I say that because of the chap standing up, probably conducting the music.)
You have a beautiful city, with a pride in its heritage.
 
Seems like a good place to visit.
 
And as Ukraine merges with the European Union, I hope the powers that be can seriously consider
adjusting the Euro so that Ukraine gets a level start.
 
I have great admiration for Yulia Tymoshenko, who through her noble act on a freezing cold Saturday helped to save people in Europe from freezing to death.  I hope she can be pardoned and allowed to live with her freedom.  She should even be celebrated.  She is a great person with a great heart.
 
Kind regards,
Duru-darshan.
 
 
 

Interest only mortgages, what's the fuss?

Posted on May 2, 2013 at 6:40 PM Comments comments (4)
I don't see what the real fuss is about regarding the Interest-only mortgages.  
 
At one time, people used to buy interest-only mortgages side by side with an Endowment policy, that would hopefully build up and mature into the principal sum owed on the mortgage.
 
Then, people did a smartness.  They cancelled the endowment policies.  That meant their monthly outgoing was lower than on a Repayment mortgage, and they had relative security of a roof over their head which was cheaper than renting.  And that is the light an Interest-only mortgage should be looked at.
 
Often, it is cheaper than renting, and if there is a surplus over the price paid to buying price of the house, that's the icing on the cake.  If not, at least it is a secure roof for as long as you continue to work hard and pay for it, meaning it is cheaper than renting and you are your own landlord.
 
So if it is cheaper than renting and you have pride of ownership, then at the end of the mortgage term if the house doesn't belong to you should not be such an awkward question.  That's the reality of it.
 
However, if property prices improve (and they probably will in England over the next four year I believe, going by previous house-price cycles) then there may to nothing to worry about.
 
The U.K. economy will recover and strengthen in the coming months and years, as growth continues in the U.S. and China, not to mention huge growth in Africa (where they regularly discover some hidden Oil resources, potential for building towns and railways, etc, etc) and an improved outlook for India, in my opinion, where the current UPA Congress government has published figures which show a steady improvement in standards of living, declining mortality rates, better nourishment for people, it is such a promising picture....If the Oil price is cheaper, all economies will grow and prosper, including the oil exporters, who will have sufficient income to sustain their infrastructure growth and prosperity of their people. 
 
Look forward to the future with optimism;  the ECB rate cut today to half percent should give added impetus to growth in the Euroland, to complete the global picture.
 
Kind regards,
Duru-darshan.
 
 
 
 

Oil price seems too high to sustain Recovery

Posted on April 7, 2013 at 2:59 PM Comments comments (1)
The jobs report of barely 88,000 jobs being created in the private sector in U.S. in February, as compared with expectations of a quarter million jobs, can only suggest several things : a) the effect of the Sequestration has been totally negative, instead of preserving cash it has slowed the economy down; and b) the price of Oil worldwide is too high.
 
High Oil price will always slow down economic momentum, as everybody directly or indirectly uses oil, be it for cars, scooters, operating machinery or combine harvesters.  When Oil price is high, people stop using these can take to walking, travelling by public transport or using labour intensive methods.  A high Oil price has retrograde impact on development, in short.
 
To summarise the sermon, after Oil price reached $147 a barrel, it took nearly two-and-a-half years for things to normalise to pre-crisis level. 
 
Currently, with the Sequestration having kicked in in the U.S., within a month the slowdown has been quite clear.  The West Texas Intermediate has gone down a couple of dollars per barrel, but is likely to fall further, simply that despite the warm good weather people cannot afford to use what they can't afford, especially as a whiff of austerity hits the U.S. 
 
In Europe, there is a positive mood for things to return to normality, but again, the high Oil price puts paid to such hopes.  The OECD and the IMF are probably fair in forecasting moderate growth.
 
As for the major developing nations, things are at a low ebb.  In India, the human rights activist Mr. Arvind Kejriwal has been on hunger strike for 15days over the price hikes for gas and petrol.  Most households in India buy canisters of gas for cooking, and the 'ordinary' people have to buy petrol for their scooters.  There is such a disparity in income throughout the world, but the Oil price seems to be univeral.  If the high Oil price has slowed down U.S. and Europe, what can you think is happening to India, or Kenya and other nations where the per capita income is far below that of the major economies but the Oil price seems to be the same?  How can they afford it?
 
If a slowdown recurs because of the dynamics of the price mechanism, then OPEC will have only itself to blame.  I remember of the wise words of the Saudi oil minister, Sheikh Ali Al-Naimi, that the Oil price at $95 was too high.  There seems consensus that the oil producing nations and their economies and development can continue pretty well at an average price of $85 per barrel.  So, in their own best interests, would it not behove the OPEC nations to lower the price to about that level?  I pray that the people of influence are listening to my words.
 
Kind regards,
Duru-darshan.
 

Is there a stockmarket cycle about to catch us unware?

Posted on March 14, 2013 at 7:27 AM Comments comments (5)
On 3rd August 2011, the Federal Reserve introduced a $40 billion per month stimulus in order to accomodate a debt ceiling raise, which was both prudent and necessary.  The additional $45 billion per month in mortgage-backed securities buy-back was an additional support, and it has definitely supported the housing market in the U.S., which has seen a ten percent increase over the last year.
Both these measures have proved to be of great benefit to the American economy, which has created many jobs and heatmaps of happiness, and is the beacon of growth which gives hope to the rest of the world that the worldwide economic Recovery is on track and indeed, hopefully, proceeding to Prosperity in due course. 
 
The figures for the sequestration cuts which is causing sniffles of the European Austerity variety in the U.S., were that the cuts equalling $85 billion over 12 months would be imposed.  That is virtually reducing the positive impact of the above stimulus measures by one-twelvth each year.  Although to some accountant such a figure may not appear harsh, in reality when people lose their jobs or have their social security cut, the effects make people weep.  Instead it may be better to create gainful employment for the people so they are busy and happy.
 
The record-low interest rates are encouraging to house-buyers and people purchasing vehicles, and with a feel-good factor people are shopping as never before and hopefully buying the latest fashions, buying real books as well as e-books on Kindle or iPhone, and able to afford high-end tablets like Apple.
 
Is there a stockmarket cycle that is about to catch everybody unwares?  I am not at all convinced of the validity of the arguements being put forward.  The world, especially the mature economies, under the aegis of the wise central bankers, are in a growth phase, feeding the river that enriches all and brings sustainance and happiness.  Of course, some sectors of some economies which are not in sync with what is happening the world over will see negative impacts, God help them, and some people will give credence to the scholars putting forward their ideas of the new cycles.  To me, it appears like a storm in a teacup.
 
Going forwards, I see a growth phase, with tensions hopefully defusing in the Middle East with wise leadership of Mr Netanyahu's coalition in Israel, more freight passing through the Suez Canal, President Xi Jinping taking his leadership in China augering well to enhance the pro-growth policies of the Honorable Hu Jintao, and the Opec leaders seeing the value in keeping Oil at current or lower levels to aid the worldwide economic Recovery, which shall of course auger well for the Opec economies too.  For all this, I pray.
 
Kind regards,
Duru-darshan.