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Honest Information, Profitable Trading

Durudarshan - Investment Analysis

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2015 may be a very good year, but caution ahead

Posted on February 6, 2015 at 7:09 AM Comments comments ()
Two Thousand and Fifteen may become a very good year, for most nations.

In China, where they recently cut rates and introduced a Trillion Dollar stimulus, the dynamics of internal growth and development as well as for the export markets suggests robust growth.  The Honourable Xi Jinping is quoted as saying that China will achieve a new standard in progress.  His words are welcome, and should give heart to anyone who may be fearing a slowdown in China.  The actual production and shipments overseas ( I hear huge ship loads arriving in Britain, and for the first time in many years hear the trains ferry the goods across in the middle of the night in a huge procession) testify to that.

In the U.S., the start of Prosperity which I had foreseen for November 2014 seems to have materialised, and heatmaps of happiness continue to grow for the people there, with increasing numbers of auto purchases, mortgages taken out on single family units, more people in work both seasonal and permanent, lower Oil prices (although that is a mixed blessing), and good weather, apart from the recent snow.

I see the DOW going upto 18,500* by June this year, although the prospects for 2016 may be mild, with perhaps the saving grace of Hillary Clinton becoming elected as the President.  Sentator Jeb Bush is a strong candidate, but I detect the dynamics at play will ensure the Democrats will again have tenure of the highest position in the land. 

*I am just expressing my opinion, based on the logics of what I perceive.  People should speculate at their own risk.

The Oil producing nations will have to work in co-operation and ensure a stable oil price, otherwise their dollar-denominated revenues will not meet the cost of their imports, and may lead to ques outside empty supermarkets, waiting to buy stocks (g00ds) which are being rationed, as in Venezuela. 
It makes me cringe in shock to see the situation in Ukraine, where the rebels loyal to the Soviet leadership are wrecking havoc and creating ghost towns, where life seems at 1950s levels.  Mr Putin can be generous and call these people off.  He must extricate himself from this very messy situation.  It is doing no one any good.  Once peace is restored in this region, hopefully the Rouble will recover, and help people in Russia share the common prosperity that is developing worldwide.  Oil seems to be bouncing around levels which may be optimum, and which may prove good for everybody, including the newly formed shale and fracking operators.  Mr Putin has to apply the generosity principle, and help the kindred folks in Ukraine.  That conflict is just so unnecessary, it is just like bullying people who at one time Mr Putin was willing to big a brotherly hug.  I just don't believe it.

Under Pradhanmantri Shree Modiji, India is on track for the fastest growth since Independence, although the recent industrial productions figures at 2.6 percent seem so faint.  Provided the RBI decide to enjoin the procession of Recovery and lower the benchmark repo rate, things should improve.  There is a great natural appetite for investment into India, with the right atmosphere.  Creating a major air hub to compete with what exists in the Arab Emirates may be a good raising of the bar, but let us all wait and see what will actually materialise.  But in the meantime, the commencement of building a 100 new cities seems a great vision, and Modiji has my congratulations.  I hope his BJP policymakers and bureaucrats will ensure implementation and fulfilment of such measures.

The caution that I mentioned....while times are good, save a little for the future, and build some reserves for the second half of 2016, when it will all come in handy.


May the Lord's blessings be upon all.


Kind regards,

Durudarshan H. Dadlani


(c) Copyright. 



 





Magnificent, the ECB Stimulus

Posted on January 25, 2015 at 5:08 PM Comments comments ()
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 Oil price - what's happening?

Posted on November 24, 2014 at 4:05 PM Comments comments ()
I had suggested a few months ago that the Oil price should be down, as had Oppenheimer chief economist Fadel Gheit.

Now it is down, well below $85.  At this level, I believe it is overdone, now at around $76 for Brent Ice and $71 for West Texas Intermediate.

Most of the economies who export oil would not find it viable to be producing at $70 a barrel - there would be no profit.

The only exception is Saudi Arabia.  Some have suggested that they would be profitable producing it at an even lower price.  However, the supply and demand dynamics as well as the political advantage would tip outside their interest, and economically, they would be throwing away their clout in the market by making it cheaper.  Under $70 a barrel will hurt a lot of the Oil exporting nations and their balance sheets.  Their infrastructure development projects would probably come to a halt in a short while, and that - forgive me pointing out - may induce a contraction in the world economy, that most people would rather not see.

In their own best interests as well as that of other OPEC nations, this Friday's meeting in Vienna I predict will produce a tightening on production quotas to restore the value of Oil. 

It is suggested that Russia may be reducing their production by about 300,000 barrels a day; if Saudi Arabia cuts their production by around a million barrels a day, the demand-supply dynamics may restore the price upwards.  The winter in the Western hemisphere is predicted to be cold, which will necessitate more fuel use.  If the price is restored upwards, that in fact would be best for the world, so all economies can continue as before (and better for those obtaining Oil at the current lower prices) without harming anyone too much. 

The world will be waiting for some sensible decisions in Vienna this Friday.

Kind regards,
Durudarshan H. Dadlani

www.durudarshan.co.uk/blog

The ECB, the Euro and some kind of Stimulus

Posted on November 6, 2014 at 5:16 AM Comments comments ()
When they look at the Monetary Expansion in the United States since the 2008 collapse of the financial systems worldwide, people are forming their own ideas of the usefulness of such measures, which were by no means new but certainly experimental in their scope.

Several trillion dollars have been pumped into the U.S. economy since then, the 2nd round starting around 3rd August 2011 when there were huge concerns over the Debt Ceiling raise, and when approx. $2.15 Trillion was duly agreed by the U.S. Senate, with bi-partisan co-operation of the Republicans and the Democrats.  Another 400 Billion was pumped in under Dr Yellen at the Federal Reserve.  Some figures suggest approx. $6 Trillion or so it total has been pumped into the U.S. economy so far, and it has been prudent for Dr Yellen to cut the spigot shaft.  The punchbowl being replenished with the Quantitative Easing measures has enriched the people and the corporations, creating many millionaires and multi-millionaires.  Whoever could see a way or a product that the people needed or wanted and could fulfil that gap has accumulated rich rewards.  Look at the Apple corporation, or Tesla Motors, Bank of America, Dupont, etc, etc. 

Even if we look at an average of 200,000 new jobs being created monthly, that equates to at least 2.4 million each year, therefore say over 12 million jobs in the U.S. over nearly six years, with many more overseas where the jobs were outsourced, providing heatmaps of happiness in some of the low-income economies where the Americans mundane and routine tasks are being done online in callcentres, or their goods being produced overseas.

I am a firm believer in the prosperity of the people, and I am very happy to see that the Stimulus in the U.S. was a great success.  More people are working, and can afford to take up mortgages on homes and cars, travel, send their children for their chosen higher education, etc.  The Stimulus was a success, because it has translated into success and happiness for people.  What greater outcome can you seek to say it was an absolute success?

The European Union, especially that part who have the Euro as their currency, now have the happy task of realising that in line with peoples' expectations, it is now essential to start a Stimulus here also.  That would actually underpin the Euro, so that the Euro too can stand as other Reserve Currencies, with the capacity to expand to adequately serve a growing population with the nations who subscribe to the Euro.  This is the Mother Currency of all these nations, and like a mother has to give milk to all her children, with fairness and equality, although it is a difficult task.  In the meantime, the U.S. offering an 'open window' and lending dollars in Paris and Brussels and elsewhere was like a surrogate, and how generous that has been, keeping the Recovery flourishing in Europe. 

Now I believe it is time for all the nations who subscribe to the Euro to ask their parliaments to decide on whether a Stimulus in Europe (or Euroland, to specify it) would be okay to go ahead with.  Once these decisions are transmitted to Germany, they can weigh it up, and the necessary Sub Clause added to the Treaty.  I have previously suggested this process about two months ago, suggesting a timeline of six months, a verdict to be decided  by Germany being anticipated by end of February 2015.

Recently a lot of readers from France, Germany, Ukraine have been visiting my website.  Few weeks ago, there were lots of visitors from Italy, Netherlands, and Unknown Area.  Most of the people are I believe counting on a Stimulus in Europe.  It is the Cash Flow they need, to put to use in their lives.
You know how happy a person feels when his bank grants him a loan, or he receives his pay packet?  Those happy sentiments are the same, felt by all humanity. 

Kind regards,
Durudarshan H. Dadlani

 



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