Wins’ stock valuation is a puzzle. Investor Jacob Ma-Weaver, at Cable Car Capital, notes that most of the stock’s gains occurred on tiny volumes of odd-lot trades and end-of-the-day transactions. Some 40% of Wins’ trades on a recent day were for one share apiece. On March 09th 2017, the obscure Chinese financial company, headquartered in New York, trades at $315. Yes $315. That is not a typo. Up +1200%.
Portfolio Manager commentary as of December 31, 2016 regarding small cap investments. Third Avenue is a private investment firm rooted in their collective value-driven investment philosophy. Since their founding in 1986, they have consistently pursued a fundamental, bottom-up approach to deep value and distressed investing–the fund has it’s focus on the company’s balance sheet, the value of its underlying assets, and the discounted price of its securities.
The growth trend has been declining in many mature economies not just since the crisis, but for several decades. This slowdown in growth has led to lower long-term interest rates. The structural causes of this trend of slowing growth is a subject of controversy among specialists. Demographic and technological developments are mentioned, as are the effects of the financial cycle, which may be out of sync with the business cycles. I do not want to pre-empt this ongoing discussion. Instead, I would like to focus on two issues, which in the current context are very relevant from a monetary policy perspective – regardless of the structural causes underlying the weak economic growth.
The International Monetary Fund (IMF) released a report in which it increased its forecast for China’s GDP growth by 0.3 percentage points to 6.5 percent. However, the IMF report also warned that “slow progress in addressing corporate debt” posed a risk to the forecast. China’s claims to be over the worst of its corporate debt problem seem to be wishful thinking. One thing is certain: The debt problem is real; it’s a drag on growth; and policies so far have not gotten rid of it.
The copper bull market looks like it’s just warming up. It seems that we are in the early part of this boom and yet the media isn’t paying much attention to it. Copper is on the rise when the industry is booming. In short, copper is used in nearly every major industry of the world: transportation, engineering, machinery and equipment, electrical, building, automotive and computer.Thanks to significant demand worldwide, the base metal has outpaced all of its higher-profile precious peers by a significant margin over the last several weeks. In the short term we can observe price swings and the bears waiting for a major correction. However the long term picture -monthly view – paints a different picture telling us that this is only the beginning.
The VIX equity volatility popped over 10% higher singaling a possible trend change for the S&P500. That could give the VIX another leg up to 18-20 area that prevailed earlier in March. The major indices are falling of the cliff and it’s about time for the S&P500 to follow their lead. The Nikkei lost a whopping 34% since its recent highest high in 2015.
FOMC is still on course to increase rates this year according to comments from a number of Fed officials. Analysts continue to forecast 25 bp increases in June and December. Yellen’s dovish speech on Tuesday imparts non-negligible risk to that outlook. She outlined a number of uncertainties to the outlook, including still slow growth, especially noting China and the potential bearish spillover across the Asian regions.