Foreign Currency

There is a definite element of contrarianism to value investing. Not always of course, but sometimes the market’s negative reaction, to news that is of a temporary nature, prices the shares of a company as if the problem were permanent. Going against the tide in these cases can produce very satisfactory investment outcomes. continue…

by Roger Montgomery Posted in Foreign Currency, Insightful Insights, Investing Education.

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It’s official. European consumer prices fell an annual 0.2 per cent in December 2014. German five-year bonds and Swiss ten-year bonds are now paying a “negative rate of interest.” European Central Bank (ECB) president Mario Draghi continues to “do whatever it takes” with last week’s announcement of the 1,100 billion euro (US$1,250 billion) bond purchase program over 2015 and 2016. Mario thinks this will steer the Euro area away from deflation by convincing investors his latest strategy is audacious enough to stimulate their relatively fragile economy. continue…

by David Buckland Posted in Foreign Currency, Insightful Insights.

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The slump in the oil price since mid-2014 has seen global inflation rates continue to trend down. European consumer prices fell an annual 0.2 per cent in December 2014 and European Central Bank president continues to “do whatever it takes” by unveiling a 1,100 billion Euro (US$1,250 billion) bond buying program over 2015-2016. continue…

by David Buckland Posted in Energy / Resources, Foreign Currency, Insightful Insights.

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Bitcoin is one of the more interesting innovations we have seen in financial markets in recent years. The digital currency shot to prominence in late 2013 when the price rocketed to above US$1000, and a whole new industry of ‘bitcoin mining’ emerged in response to the elevated prices.

Websites that allow “investors” to trade currencies and commodities have also moved to capitalise on the excitement by offering their customers the ability to trade Bitcoins at the click of a mouse. More recently, the way to profit from Bitcoins has been to go short, with the price falling back to around $200 more recently. continue…

by Tim Kelley Posted in Foreign Currency, Insightful Insights.

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With 2014 behind us, let’s take a look at the year that was, and consider what could be in store for 2015.  continue…

by David Buckland Posted in Economics, Foreign Currency.

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Macau gaming revenues look set to go from bad to worse. According to reports in The South China Morning Post yesterday, Beijing is giving its Ministry of Public Security powers to crack down on illegal money laundering through Macau, in what is described as an unprecedented move.

Money laundering through Macau has, it is speculated, been a primary channel through which wealthy Chinese channel money out from the mainland. continue…

by Roger Montgomery Posted in Foreign Currency, Insightful Insights.

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As you would be well aware, nobody is able to control share prices. Even the very best quality companies, purchased at steep discounts to intrinsic value, can fall in price over a week or a month or even a year. And so we aren’t surprised to see the share price of one of our holdings – Flight Centre Travel Group Ltd (ASX: FLT) – not flying as high as we’d like. continue…

by Roger Montgomery Posted in Foreign Currency, Insightful Insights, Tourism.

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Team Montgomery has long warned the Australian dollar, at near parity to the US dollar, has a fair bit of downside risk (see here, here and here). With that hypothesis now playing out – and commentators starting to crow – you may be wondering which companies may benefit from a stronger US dollar. continue…

by Ben MacNevin Posted in Foreign Currency, Insightful Insights.

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This morning, we read with interest the views of Chris Watling from Longview Economics, who believes the Fed is underestimating the strength of the US economy. continue…

by Roger Montgomery Posted in Economics, Foreign Currency, Insightful Insights.

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One thing we can say about the Reserve Bank of New Zealand is they certainly move quickly when they think it is appropriate to do so.

For example, in the nine-month period between July 2008 and April 2009, the New Zealand official cash rate (OCR) was cut on seven occasions, from 8.25 per cent to 2.5 per cent.

Now the opposite is occurring and in the past four months the OCR has been increased on four occasions – each by 0.25 per cent – from 2.5 per cent to 3.5 per cent. The New Zealand economy is expected to grow by 3.7 per cent in 2014, with the recovery in construction and net migration adding to housing and household demand.

The graph below compares the New Zealand 90-day bank bill rate with the New Zealand official cash rate, which commenced life in March 1999 at 4.5 per cent.

by David Buckland Posted in Financial Services, Foreign Currency, Insightful Insights, Value.able.

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