There is a big difference between betting and investing. Investing in inverse ETF’s equates to betting. This article talks about the demise of XIV. People investing in products such as XIV should be given a lobotomy sponsored by the NHS. This is starting to bring back memories of 2008. The culprit was Hedge Funds then. Today it is ETF’s. That time one person I spoke to that worked for a bank that was heavily marketing Hedge Funds admitted that they did not read the fine print and did not know about gating. Another person told me that he was told hedge funds would never lose money. I wonder what that person’s view would be on ETF’s today. I am not a betting man but if I was then I would say that he would cease investing in ETF’s for the next one year. I would be telling him to keep his wallet out.
The active versus passive debate has been skinned so many times that there is nothing left to skin. The answer is that there is a place for both. However, in neither should there be a place for inverse ETF’s. There is nothing wrong with shorting stocks or ETF’s. You cannot crucify the undertaker for making money when people die. Investing in inverse ETF’s is like injecting yourself with a lethal substance hoping that you will make money off the insurance. The reality though is that action of your will probably leave your health beyond repair and cause heartbreak to the ones closest to you.
Except for two people; everyone else I know who passed through the gates of Credit Suisse has been glorified cold calling salespeople. Their structured products are so beautifully created that the client will not even realise that the only people making money are the banks themselves. Of those two people, one died and the other is a gem of a person who is thankfully working for another institution. I have told him that leaving Credit Suisse was the best thing that he did. It has been some time since I spoke to him. Maybe I should now.
Filed under Banking, Blog, Business, Compliance, ETF, Family Office, hedge funds, Indices, Investments, Market Outlook, Market Timing, Private Banking
Filed under Blog, Business, Compliance, ETF, Indices, Investments, Market Outlook, Market Timing, Private Banking, Regulations, Tax Avoidance, Vanguard
I love alternate indices. RAFI which can be invested through PowerShares is probably my favourite investable index. The other index I really like is the Christmas Price Index. I had written a post on the following topics
- Religion-based Indices
- Condoms and Chocolates
- Analysis Test Series England vs. South Africa
I am still in the process of tweaking my cricket index. The common assumption in all this is my strong belief that the methodology used to measure certain indices is not completely accurate and some like the ICC cricket ranking is completely wrong. One decision I really liked was a recommendation to buy the shares of Apple when the news that Steve Jobs had cancer broke out. Yes, I did feel sad that Steve Jobs had cancer but I absolutely was furious at the people who thought that Apple would collapse because Steve Jobs would no longer be involved and would die. Today I feel the same way about the negative ratings given by analysts about Apple. The good thing though is that the fall in the share price of Apple is a good opportunity to buy it. Apple is an innovative company and will continue to do so. Everyone initially predicted that the cost of the iPhone X would under perform the iPhone 8 and would eat into the profits of Apple. Analysts more often than not get their calls wrong. Does it really matter if a company distributes less dividend than analysts expected? The important thing is that Apple is a good company. I read an interesting astrological article on the numerology analysis of certain tech companies. I am not a great believer in astrology or horoscopes. I do consider that there is a certain amount of science in numbers. It does not matter whether it appears as numerology or the significance of numbers in various religious texts. This post on the thirteen tribes of Israel is extremely good. There is a logic in Shmita. Apple will always be an attractive company to buy into. Buying it when the share price is down is a bigger bonus.
Filed under Apple, Business, Christianity, Cricket, ETF, Healthcare, Indices, Investments, Islam, Leaders, Market Outlook, Market Timing, religion, Test matches
(Originally posted on 27th April 2010)
I wonder if it is a coincidence that I am writing another post related to religion. Any cataclysmic event will have an effect on a person’s psyche. On the surface, I do not think I have become more religious. However, there may have been a subconscious change.
My fascination with indices and especially those that have an alternate view should be apparent by now. So the launch of Europe’s first Christian Equity Index has caught my eye.
First, there must be a legitimate reason for launching an index. The reason for this is that there is an apparent demand by investors for so-called ethical stocks. First, the companies are drawn from the Stoxx Europe 600 Index. Second, they should derive their revenues from sources that are not against the values of Christianity as defined by a committee are only included.
Therein lies the first problem. The companies will be based on the interpretation of Christianity as set by people. Companies that have birth control are not included. This is an obvious reflection of the fact that members of the Vatican are present in the committee. Secondly, I refuse to believe that each and every company that will be listed there has not made any profit from non-Christian principled companies.
Thirdly is there a need for such an index? Shariah indices, for the most part, should act similar and contain the same underlying as a Christian index. Off the top of my head, I would say alcohol companies and the way interest is treated would differ.
I have stated earlier that the futures or stock market can reflect how well the country may perform in sports. Going by this philosophy then if this Christian index outperforms the European index and a shariah index then does that mean that Christian values are better than those of a secular world or Islam?
According to me, actions do not mean anything. What matters are your beliefs? In my mind, a Christian company is one that is led by people who have accepted Christ as their personal Saviour. If Christians are looking to invest in ethical companies then this should be the starting point. Everything else will flow.
I have always been opposed to investing directly in Marks & Spencer. My view was simple. M&S sat in no man’s land. You had John Lewis that provided high-end goods. On the other end, there was Primark. If M&S made a few wrong calls on fashion then they would have a major slump. This did happen quite a few times. Yesterday’s news that M&S is to close down more stores came as no surprise. I strongly believe that M&S food is the ventilator that has kept the company alive. It will continue to do so. As always all you have to do is have a walk through the stores of M&S. In general, M&S Food will have the largest percentage of people. This trend will change unless M&S can appeal to the people who are inclined towards healthy but quick food but their older base that would like their traditional British meals. Will M&S be able to balance their traditional Cottage Pie with their Thai green curry? In light of Brexit, I hope they do as they are one of the iconic British brands. If one has to gain exposure to the UK today then possibly the best way to do it is through VGK. The Vanguard European Fund has about a 29% exposure to the UK. The exposure to the European markets would act as a hedge. I believe we are going through an extremely interesting time right now. I do not like making predictions but there will be a winner and a loser in the whole Brexit process. Either way, the financial markets will get affected. Overall the European markets will go up.
Disclaimer: I do not hold any shares of Marks & Spencer or VGK right now.
Filed under Brexit, England, Europe, Food, FTSE, Indices, Investments, Market Outlook, Market Timing, United Kingdom, Vanguard
(Originally posted on June 1st 2009)
A new month and the sun is shining brightly. The markets have been boosted by the news that the Chinese manufacturing markets have grown.However I am extremely sceptical when the markets increase or decrease on news of the mining, financial and Chinese sectors. This has also boosted the commodity prices which is of no surprise. Tomorrow will tell whether the news is actually positive or not.
GM is to file for bankruptcy today and is expected to emerge from it in 60-90 days. Will it rise like the mythical Phoenix from the ashes?
The countdown to the Ashes has begun. Historically the country that is expected to win the Ashes and wins the Ashes will increase. October 2008 is a good date to start as Australia played India in India and that was followed by England playing India in India. The FTSE futures are lagging the ASK by 1.73%. However the FTSE has increased at a faster rate than the ASX since England comprehensively beat West Indies in the Wisden Trophy. The performance of the two countries in the upcoming T20 cricket world cup will start to determine whether England or Australia will win the Ashes and consequently which market will do well. The person who will make a difference in the recovery of the UK market could be Andrew Flintoff. My eyes will be on Sophia Gardens in Cardiff on July the 8th where History will be made as it will become the 100th ground to host a test match since Cricket began.