Cash-in-hand investors have a large number of competitive investing options and opportunities open to them. Corporate Stocks, Corporate bonds, Annuities, Mutual funds, Exchange Traded Funds, Real Estate Investment Funds, Municipal bonds, Private positioning money, Land, Apartment houses, Commercial real property, Mortgage pools, and Individual Mortgage note to name just a few. When you sell your mortgage note every one of the above investment products are your competitors.
Since the primary reason for trading money is to earn more income, your take note of income producing potential and safety must charm to the buyer more than the other investment products. Investors, or unconsciously consciously, compare your notice to all of the other products to make their investment decision. The investor is like the judge at a beauty competition. All the contestants are parading and smiling before the cash-in-hand investor-trying to look their best-in order to be crowned as the winner”.
The second saw three funds backed by Beijing Roll- in Investment Management fail to repay investors after maturity. Credit Equals Gold and Opulent Blessing Project are just the beginning, says Mike Werner, mature analyst at Bernstein Research, today in a note. Werner argues that rising rates of interest on the interbank market reflect the Chinese government’s crackdown on shadow (a.k.a. Several trust and wealth management products were issued or promoted by state-owned banks and carried implicit warranties by these same state-owned banks.
The key issues are whether the government allows defaults that occur and, if so, whether to save them through the backdoor (see my prior articles How resilient is China? And Chinese inequality and the development imperative). Stresses are beginning to show up in my so-called “Chinese canaries”, which are mainland banks shown in HK.
While readings are not at the stress levels seen during the levels of the 2011 eurozone crisis, risk levels do appear to be elevated. As with the possible US growth scare trigger, there is one easy to get at key chart to view. Focus about how dim sum bonds (DSUM), which are an denominated bonds issued in HK, are performing against US Treasuries (IEF).
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This ETF pair is currently testing its relative uptrend, as the CYC is just. You can get a live update of this chart here to monitor the chance of rising Chinese financial turmoil, which could cause trouble for global financial markets. In conclusion, I do not think that we are on the verge of a 1929-style market meltdown. However, market patterns can repeat themselves and we could visit a 10-15% hiccup in stock prices in the close to term.
I have defined two likely factors behind such a downdraft, a US development scare and increasing Chinese language tail-risk namely. For now, the charts show that the markets stick to the precipice on these two key triggers. For visitors who wish to play along at home, just watch these two graphs (CYC as SPX, and DSUM or IEF) to find out if the pattern could replicate itself.
As things stand now, the bears shouldn’t get excessively excited about the prospect of the steep drop-off in stock prices. Unless both key signals break their relative trends in an unambiguous fashion decisively, I am willing to provide the bull case the advantage of the question. Cam Hui is a stock portfolio manager at Qwest Investment Fund Management Ltd.
The opinions and any suggestions expressed in the blog are those of the author and do not reflect the views and suggestions of Qwest. None of the information or opinions portrayed in this website takes its solicitation for the purchase or sale of any security or other device. Nothing on this blog constitutes investment advice and any suggestions that may be contained herein have never been based on a consideration of the investment goals, financial situation, or particular needs of any specific recipient. Any purchase or sale activity in any securities or other device should be based upon your own analysis and conclusions. Past performance is not indicative of future results. Either Qwest or I may keep or control long or short positions in the securities or musical instruments stated.
Which reminds me that Yahoo’s best investments have been Yahoo Japan and Alibaba. Perhaps they could have spent the same profit marketing or R&D. Masayoshi Son of Softbank is similar to that too; he has made some great bets over the full years. I’ve never owned Softbank or any of his entities only because he could be just too far out for me personally. He informed Charlie Rose lately that his stock price transpired 99% but bounced back again a lot. Well, I inform people don’t worry about stock price volatility and who cares what happens to the stock price so long as the intrinsic value keeps growing.