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Larry1234
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Everything posted by Larry1234
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The demand for the precious metal surged post the financial crisis as a store of value. Indeed, as central bankers in the developed world began printing reams of money to boost liquidity, the value of paper currencies increasingly began to be questioned. The global economy meanwhile deteriorated. Debt piled up in European countries such as Greece, Spain and Portugal bringing them to the edge of bankruptcy. Unemployment soared. But that did not put a stop to the quantitative easing programs of the developed world. Thus, with the economic scenario looking bleak, a tangible, precious asset such as gold began to find more takers. So much so that there were also growing talks of the global economy returning back to the gold standard. So what does this latest slide in gold prices signify? Are signs of a recovery becoming more visible as a result of which interest in gold is beginning to peter out? I do not believe so. There does not seem to be any concrete evidence that the global economy is on the mend. Companies are not investing much, consumers are not spending much and overall sluggishness continues to persist. Unemployment remains high and there is hardly any job growth happening. The recent crisis in Cyprus has only highlighted that risks in the system have not been eliminated. And the massive stimulus measures announced in Japan have only shown that central bankers are not completely done yet with monetary easing. All of which increasingly means that the slide in gold in recent times is more of a correction. What is more, as per an article in Moneynews, noted investor Jim Rogers believes that while this is just the correction that gold needs, it has still not gone down enough. When it drops more, he will buy more of the metal. We are not sure to what level gold prices will correct. But we are of the view that the case for gold in the longer term still remains quite strong. Especially as long as governments across the world keep printing paper money. That is why, if you haven't started making gold a part of your portfolio, a correction in prices is certainly the right time to do so.
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More updates - Financial services could be part of EU-U.S. free trade deal Blackstone reportedly withdraws bid for Dell U.S. consumer sentiment continues to improve BNP Paribas debuts 38-month close-end fund in India
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North Korea's continued use of a threatening posture, if it fails to gain concessions and shows China's inability to influence its smaller neighbor, may ultimately be seen by China as detrimental to its own interests. China & North Korea: A Historically Tense Alliance Built On Necessity | Economy Watch
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Trading based on news is known as Event based trading. Event based trading studies involve the analysis of security price behavior around the time of an event. Event studies attempt to measure abnormal changes in stock price of publicly traded company when some new information about the respective company comes to the market. The new information that is often of interest is the market perception of which companies will be the winners and which will be the losers following the introduction of new information. The event study method is based on the assumption that capital markets are efficient such as to estimate the impact of new information on anticipated future profits of the firms. If information communicated to the market contains any useful and surprising content an abnormal return will occur. In a capital market with semi-strong efficiency one can assess the impact of the event in question on the market value of the company by calculating the abnormal return (MacKinlay` 1997). An event study aims to measure the direction and magnitude of the impact, an event would have on value based on its effect on the company’s stock price when the event is announced after accounting for systematic risk.
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Thanks a lot for the events info.
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My Top 6 Reasons Why Most People Fail At Trading
Larry1234 replied to dynamicsoul's topic in Trading
For me, I would rather say, I never want to put stop loss order, because of this, my losses are huge where as earnings are less. -
I have my account with OptionsXpress (owned by Schwab)
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Is it the right time to accumulate Gold ??
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Cyprus officials have agreed to sell around 400 million euros in excess gold reserves to help finance part of its bailout. Cyprus Sells Gold Reserves to Raise ?400m | Economy Watch
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Don't forget Arbitrageurs, they are also one of the big market participants. They play in big volumes, but frequency is less.
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More updates on Economy - Initial unemployment claims decrease more than expected in US Australian unemployment hits 3½-year high Greek joblessness reaches a record 27.2%
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IMO One of the major reason for the decrease in share price of Infosys share is they did not announce the next year the EPS Guidance for FY 14 (which they used to provide till Q3) . They only provided revenue guidance, a growth of 6-10 %, very less (conservative) compared to Industry average growth of 12-14% provided by Nasscom.
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But sometimes it really difficult to take a call regarding the impact of the news whether its a high impact, middle impact or low impact ?
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Can you let us know how is it (the above link, posted by you) related to this thread ?
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I totally agree that once the money supply increases, there is high probability that the Gold price will increase which means that a round of quantitative easing which entails gold rising due to heavy duty money creation by central banks around the world. That was certainly the case in the early rounds of quantitative easing. But each additional round of quantitative easing has resulted in gold rising less in response than to the previous bouts. What is happening is that the low interest rate environment created and perpetuated by Bernanke is defeating gold as a yield hungry investment community seeks assets that pay income. Dividend-paying stocks and high yield bonds have become very popular with investors seeking income. As gold is a commodity, it does not have an income component. Due to that, it is in disfavor as an investment in the current climate. But from a long term point of view (i.e. 5 - 10 years), Gold will certainly go up and will definitely provide investors a hedge against inflation IMO.
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Fitch Downgrades China: Miracle or Mirage? China’s sovereign credit rating was cut by Fitch Ratings. The reason is China’s growing debt burden on local governments and the total credit in China’s economy now exceeds 198% of GDP, much of this is carried by government-sponsored entities and local governments. In my opinion there was a gross mis allocation of capital across china. We all know that “Early in the life cycle of a government it is relatively easy to identify worthwhile and valuable investment projects. However, those needs are met relatively quickly. Then it become very difficult to determine which projects are worthwhile.” While many contend that China needs to move from an investment-driven economy (with high savings rates) to a consumption-driven economy (with low savings rates), they falsely view this phenomenon as the result of cultural choices or habits. In reality, high rates of investment are created by government policy geared toward investment, employment, below-market interest rates, loose monetary policy, increasing debt, and often currency market intervention. China did not grow quickly despite low consumption, but because of it. China has been systematically transferring income from households to investment via (a) an undervalued currency, equivalent to a consumption tax on imports; (b) low-wage growth versus productivity, a gap that has widened greatly in the last decade © financial repression (i.e., extremely low interest rates), which taxes savers and subsidizes borrowers. One thing that remains unclear is the relationship between the trusts that are funding loans and the parent organizations (i.e., banks). It is thought that many of these trusts are created by wealth management arms of banks in China. If the underlying investors in the trusts are assuming all of the risk, then the risk of financial contagion is mitigated. If the banks stand behind these loans, however, then banks balance sheets will go haywire when loans start to sour. Recently, signs of trouble have begun to emerge. If it can’t go on forever, it won’t. Change is coming to China. The next logical question is: Will the transition be smooth or rough?
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Commodities experts (pundits) are of the opinion of the end of the gold bull market. They are expecting gold to go down in future. Who knows? Maybe they're right. But it seems more likely that when the Japanese get their presses running hot the price of gold will resume its upward climb. Or, looking at the big picture, the central banks of the world have decided that money printing is the solution to low growth and high unemployment. Unless something happens to stop them, they'll probably keep increasing the money supply. And the price of gold will probably keep going up.
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Nothing much to say today. Stocks still going up. Gold still dilly dallying. Gold is waiting to see what happens. Japan and the US are pumping up the money fast. But the ECB has let its base money decline. Result: slightly less global paper money ...and a slightly lower gold price. Seems logical. Sensible. Gold is the world's alternative money. The supply of paper money goes up...and you get more paper for each unit of gold. That's just what you'd expect. But the pundits are sure the end of the gold bull market is at hand. Who knows? Maybe they're right. But it seems more likely that when the Japanese get their presses running hot the price of gold will resume its upward climb. Or, looking at the big picture, the central banks of the world have decided that money printing is the solution to low growth and high unemployment. Unless something happens to stop them, they'll probably keep increasing the money supply. And the price of gold will probably keep going up.
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Introduce Yourself Here - Don't Be Shy!!
Larry1234 replied to trading4life's topic in Beginners Forum
I would suggest you to start with a demo trading account and read as much as you can about technical analysis and the threads in TL. If you want to learn about Futures and Options, you can read my threads. I generally posts on options. Happy Learning -
More updates - Fitch cuts key rating for Chinese debt Mexico sells $2.09B of euro-bonds at lowest yield in history Japan's Central banks' stimulus unlikely to boost inflation, IMF says
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I prefer to take long positions in options because the downside risk is limited. I would suggest you to start with options compared futures if you are novice to Derivatives.
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I am aware of Derivatives on Weather and Electricity etc but I have never heard of any derivatives on Volcano, Earthquake, Flood, Tornado etc. that is why I thought of asking you. Lets not digress from the topic to be discussed on this thread i.e. Gold ....
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Do you trade tornadoes, tidal waves, and earthquakes ? I never knew this :haha:
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More updates - IMF puts €1B toward Cyprus' €10B rescue Agency expects volatility in China's cross-border capital flow Hiring declines in U.S. private sector
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In my opinion, trading in the Forex market based on the news is comparatively tough compared to equity market trading. Traders prefer to trade based on charts in Forex markets. With the help of economic data (inflation, Import export data, FII Inflows and outflows etc), we can take a long term call.