Archive for the ‘global markets’ Category
Monday, March 15th, 2010
Open systems increase information and intelligence. The more we share information, the more we learn. Different people can draw different conclusions from the same information, which can be invaluable. You may see data with one interpretation—I with another. We share perceptions and open each other’s eyes to fresh possibilities and new understandings of both the information and each other. Information is the best example of abundance. There’s no limit on the amount and how it can be used. Consequently, the more we have and use, the more beneficial it becomes. Organizations that have established trust and full partnership will benefit from this abundance of information and increased intelligence.
Mutual benefits = more for everyone. Again, the theory of abundance becomes reality in this dynamic. The more people benefit from an activity, the more they are willing to engage in it and the more it brings them. It is through partnerships that mutual benefits can be realized, generating wealth for everyone involve.
Tags: payment, price, Private Annuities, property, purchase real estate, shares
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Wednesday, October 28th, 2009
The value chains for telecommunications wireless and electric utilities are examples for noncyclical sectors. Wireless operatorsinteract with equipment suppliers and their biggest cost positions are for subscriber acquisition, advertising and interconnection fees. Their customer base is divided into business clients and individual consumers. The success of a wireless operator will depend on the control of all parts of the value chain. This includes the costs for acquiring new customers, maintaining the existing customer base, the bargaining power with equipment suppliers, network costs and interconnection fees. The earnings situation will depend on the market power and degree of competition.
Fuel costs represent a big cost block for electric utilities hence their profitability depends to a large extent on raw material costs. Electric utility companies can diversify across the business segments generation, transmission, distribution and trading. The customer base is divided as industrial, commercial and residential.
Tags: business competition, CEO, get out of debt, income, international markets, merger, money issues, revenue, shareholders, shares
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Tuesday, October 27th, 2009
Structural economic changes of industries are important in the sector selection process for corporate bond investors because they determine how an industry functions and will allow to make projections about the development of the credit quality of specific industries. It has to be determined whether certain changes in industry dynamics occur which have a material effect on the evolution of the industry structure. Examples of some driving forces for change are:
- Long-term changes of growth patterns
- Changes in the customer base (demographics)
- Changes in production costs
- Product innovation
- Changes to production processes
- Structural changes of supplementary industries
- Changes of government policy
- Exits and new competitors.
Tags: bonds, business tips, credit score, get out of debt, making money, money issues, money management, money tips, payday loans, personal finances
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Sunday, October 25th, 2009
Oil companies’ relative profits also peak during a recession because an economic downturn is usually accompanied by high oil prices. Utilities have a noncyclical business profile and they are subject to regulated pricing. They will realize their profit peaks relative to the market during a later stage of an economic downturn.
Consumer staples is a noncyclical sector and hence the profit peak relative to the market is reached towards the end of a recession. Profits are not robust but consumers cut spending on large discretionary purchases while the demand, for example, for food and beverages remains relatively stable across the whole economic cycle.
Group sectors according to their change in profits during recession and recovery. The profits of cyclical sectors will fall in recessions and rise during a recovery. On the other side, the profit cycle of defensive companies is countercyclical. Profits will rise in recessions and they will tend to fall in recoveries. Some industries experience structural gains which means that their profits rise during recession and recovery. Other industries suffer from structural losses which means that they realize falling profits in recession and in recovery as well. Those are industries which reached a declining stage in their industry life cycles.
Tags: crisis, foreclosure, investments, loans, money advice, mortgage, stock, stock exchange, Tenancy-in-Common, tenant, trade value
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Saturday, October 24th, 2009
Capital goods, paper, and metals and mining companies realize their respective profit peaks at the later stages of an economic expansion as they produce goods and services whose demand is closely tied to economic activity. Additionally business peak cycles are accompanied by inflation as demand exceeds supply and for example, basic material industries experience higher profit margins in this environment because their production costs are not significantly affected by inflation and, on the other side, they can increase prices for the finished products. Industries with a high operating leverage benefit as well because their costs are fixed in nominal terms and revenues increase with inflation. The fixed costs in a company’s operating structure determine the operating leverage. Generally, it can be said that industries with a high fixed cost base and high inventory costs, for example, the paper and the aluminum industry, are always under pressure to keep capacity utilization rates high because decreasing capacity utilization rates will have an immediate adverse effect on profitability.
Tags: price, Private Annuities, property, purchase real estate, shares, tax, taxes, tenancy, Tenancy-in-Common, tenant
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Wednesday, October 21st, 2009
After analyzing industry life cycles and the competitive environment of industries the macroeconomic environment has to be incorporated in the industry analysis process. For this purpose the focus will be on business cycles and the cyclicality of industries.
Corporate profits hava a long history as a percentage of GDP across several economic cycles. Corporate profits tend to fall long before the economy goes through a recession. Corporate profits usually reach their bottom towards the end of a recession. They start to rebound with rising economic activity. During the last expansion, which was one of the longest and that stretched through the 1990s, corporate profits started to deteriorate already in 1998. Sharply rising equity valuations, a focus on shareholder value and an undisciplined build-up of leverage induced a decline in profits when the earnings growth trend reversed. Every business cycle will be different from past cycles so the task is to identify evolving trends in order to make reliable projections about future performance.
Tags: annuitant, Annuities, banking, banks, Bearish Patterns, Budgeting, cash, company costs, currency cycles, Debt
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Monday, October 5th, 2009
Some investors who can process emotions quickly enjoy foreign stocks. Non-U.S. stocks are idea investments with great idea complexity. The romantic, foreign traveler who realizes the risk but enjoys the hunt can have fun here. Foreign and emerging markets are less picked over than the U.S. market. In the midst of the chaos, there are tremendous bargains. If you like to read about China and Israel, travel to Turkey and Paris, or think about Euros versus yen, then this may be in your comfort zone. For the foreign traveler, who is practically addicted to foreign investing, 50 stocks will provide a lifetime of entertainment. But most investors will be rattled by the volatility and dishonesty.
Even local investors are turned off by the irregularities overseas. Investors in most foreign and emerging markets invest in bank savings instruments, government bonds, and real estate. Only in the last five years has there been general interest in stocks. Huge American brokers, mutual funds, and investment banks see tremendous profits to be made from instilling an “equity culture” overseas. Not only can they sell products to overseas investors, but they can sell U.S. investors turned off by the U.S. market hot foreign and emerging market products.
Vast amounts of propaganda have been produced to instill equity culture overseas. The two pillars of the platform are that stocks are the best investment for the long-run and stocks are the only investment with returns high enough to save the shaky retirement systems of European and Asian countries. Respected newspapers and magazines looking for large ad revenues from the campaign have joined the chorus. Politicians looking for votes have enacted 401(k)-type legislation. Unfortunately, equity culture is not likely to make many investors happy.
Tags: payday, personal finances, profit managing, stock exchange, student loans
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Tuesday, August 25th, 2009
You can buy stock in developed countries such as Germany and the United States. Many emerging markets such as Venezuela and Thailand also have stock markets. You can buy their stocks individually on the U.S. markets or through a foreign brokerage account. You can also buy U.S. mutual funds that specialize in foreign and emerging stocks. There are also CEFs and ETFs that own non-U.S. stocks.
Non-U.S. stocks have all the emotional content of U.S. stocks. Herd psychosis, powerlessness, issues with brokers and mutual funds, overconfidence, and all the rest are common in foreign investing. Foreign stocks also have additional traps we rarely encounter with local companies.Foreign stocks are bought and sold in foreign currencies. Foreign companies make profits and losses in foreign currencies. Because you spend U.S. dollars, foreign stock prices must be translated into U.S. dollars before you can determine if you have any gains or losses. This adds volatility to foreign stock prices. If the Euro sinks by 15 percent and your German auto stock declines in Euros by 15 percent, you lose 30 percent in dollars. If the Euro rises by 15 percent and the auto stock rises by 15 percent, you gain 30 percent in dollars. A similar U.S. auto stock would only swing up and down 15 percent.
Tags: banking, credit cards, credit score, getting out of debt, home value
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Wednesday, August 5th, 2009
Unmanageable investments gnaw at the investor, often for years or decades. Unmanageability manifests as anger, frustration, and resentment. Stockbrokers confuse investors with lots of numbers and stories and then sell them inappropriate stocks. The investors cannot sue. They were shown prospectuses and all the legal mumblings were made. What is left is a dud stock and a resentment against the broker, the stocks, the brokerage house, and the whole idea of buying stocks.
Typically, the sense of powerlessness leads to passivity. Unmanageability leads to attempts to manage people, institutions, and policies. Change brokers, change stocks, change Realtors, keep it all in a money market account. In the extreme, unmanageability manifests as rage. Investors who shoot their broker, call in bomb threats, plant false rumors on the Internet, or manipulate stock prices are attempting to control unmanageable investments.
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Tuesday, July 21st, 2009
If there is a punch line to this book, a must-do for your action plan or a secret to getting out of debt, increasing your discretionary income is it. You’ve got to make this your central mission. You need to realize that every dollar flowing in and out of your household affects your discretionary income.
With that in mind, there are only three real ways you can increase your discretionary income. While there might be a million different tips and tricks, they all still fall under one of these three categories:
Increase your household income. If you increase the amount of money coming in, there’s a good chance you’ll increase the amount of money left over. But it’s also one of the hardest things to do. It requires getting a raise or second job, or developing some type of passive income like owning rental property.
Decrease your fixed expenses. Our fixed expenses are often some of our biggest, which means we can make a huge impact on our discretionary income by lowering them. But finding a lower-rent apartment, getting rid of a car payment, or eliminating your child’s preschool tuition is a big decision that requires major life changes. Chances are, you’ll adjust your fixed expenses over the long-term, not overnight.
Decrease your variable expenses. Decreasing your variable expenses is the only real change you can make today. You can choose to say no to the iced mocha, skip the big birthday gift for Mom, or pass on that “thing” you think you really deserve. But let’s face it, that’s all the fun stuff. Knowing how hard it’ll be to cut these expenses, it’s important to remember that this change is temporary, and also to reward yourself as you make progress.
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