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valuevulture999 (70.05)

March 2011

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Portugal at risk of failure!

March 24, 2011 – Comments (0) | RELATED TICKERS: DB , AEG

The people have spoken and they say “No more Austerity!” Living within your means is just too hard! We want the good life without working for it. Who doesn’t? The government of Prime Minister Socrates is in danger of collapse due to the upcoming vote on the austerity measures Portugal would have to agree to avoid an  EU bailout of their debt. If he should lose this vote, he would be forced to resign an parliament will dissolve with elections to be held in 2 months. This will add not only political chaos but a financial chaos in the credit markets. Most of us main street investors are actually holding Portuguese debt usually in your 401k , retirement or taxable investment accounts if you happen to hold some type of global or foreign bond fund. Time to look at what your fund exposure really is to this country.

As I have said in previous posts, the Euro is extremely overvalued given the weakness in the structure of the EU and the financial distress half of their membership is currently in. There is no real mechanism to deal with this. They recently approved a bailout fund to be approved by the Germans, but it is not enough if Portuguese bonds collapse which could add stress to bonds from Spain and some other eastern European countries. The same goes for all European banks since most of their tier 1 capital is in the form of treasury  bonds from the periphery countries experiencing financial stress. Pay close attention especially to the German and Austrian banks and most european insurance companies (Deutsch Bank, Dresdner Bank, Commerzbank, Axa Financial, Abn Amro, Aegon, Allianz, ING BAnk, Munich Re, etc).  There isn’t much growth in Portugal which is why anyone with advanced labor skills are leaving to countries with better opportunities.  [more]

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Got Wood?

March 16, 2011 – Comments (0) | RELATED TICKERS: RYN , WY , UFS

I wanted to go into detail further in one area I had mentioned in my last post regarding the disaster in Japan which is the huge market demand this creates for Commercial Forest products. We’re talking about raw pulp, paper, lumber and non-wovens (synthetic fabric used in hand wipes and Clorox surface wipes). Although most attention have been drawn to Japan this wasn’t the first disaster in this region. There were the epic floods near Perth Australia at the beginning of the year , the massive earthquake in New Zealand that leveled their second largest city and the near apocolyptic situation in Japan. We’re not even in hurricane season yet! This creates a unique market demand situation for certain forest products that I will discuss. There are other opportunities in other reconstruction materials such as copper, steel, titanium, and etc. Also there are opportunities for health products such as bleach, disinfectants , antibiotics and other drugs due to the huge death toll. However my expertise is in Forestry since I have been a market buyer for close to 7 seven years and I have deal with some of the major players in this field.  Remember, the key to being a good investor is to invest in areas you know well because you will see things others will miss.   [more]

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Disaster in Japan!

March 14, 2011 – Comments (3)

Hello folks! Is this turning out to be an eventful year or what! As many of you including yours truly have been glued to the unfolding slow motion disaster in Japan. First there was a devastating earthquake, followed by a Tsunami and now a possible meltdown in 3 nuclear reactors.  You would normally see this stuff in a summer disaster movie flick but unfortunately this happened for real. Unlucky for them and all investors this occurred after market close on Friday so no one had a time to react until Monday. Expect a very brutal week depending if the nuclear nightmare unfolds, but Monday could be a very bad day as people trade with emotions, but none more intense than the Nikkei index. Even if you don’t hold Japanese stocks directly, your are exposed to a degree if you own a global bond fund, foreign stock fund, managed fund accounts, that are held personally, invariable annuity accounts, variable life contracts, or any retirement account. If you want to know your exposure you will have to read the country breakdown of your last mutual fund quarterly report. There are opportunities and pitfalls in this unfortunate incidence.

Here are the pitfalls:  [more]

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Nokia, Can you hear me now?

March 07, 2011 – Comments (2) | RELATED TICKERS: NOK , AAPL , MSFT

Greetings fellow value investors! It’s been a long while, the market has been on a powerful rocket ride and it’s been hard to find value opportunities. That is, until now!  One of the great lessons of value investing is to check your biases at the door and look at opportunities that are considered unpopular, unloved or misunderstood by the investing masses which brings me to today’s topic:  NOKIA (NOK).  [more]

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