9/30/2012
9/25/2012
Another one to think about ...
- US will not tolerate Iran becoming a nuclear power (latest Obama speech)
- biggest naval exercises ever are conducted in the Streets of Hormus
- Israelian trash-talk on Iran was never worse
- tensions between China, Japan and Taiwan about some neglect-able islands rise
Oil prices are going to ????
- biggest naval exercises ever are conducted in the Streets of Hormus
- Israelian trash-talk on Iran was never worse
- tensions between China, Japan and Taiwan about some neglect-able islands rise
Oil prices are going to ????
And now for something completly different ...
These days i got a notification from comdirect on 'comdirect Wechselgeld sparen' ('comdirect save change').
The deal is:
- for every payment you do with your comdirect VISA card, they will round up the amount to a whole EUR (so if you fill up your tank for 70.01 EUR as you did not hit the 70.00 number, as you usually try, they will charge you 71 EUR)
- the excess amount will be transferred to your Tagesgeld-Konto (call money account), which has a yield of appr. 2 %
- so your Griokonto (checking account) will be charged somewhat higher, but the difference goes to your interest earning call money account
- for the first 3 months, they will double every EUR transferred to your call money account that way after 3 months (read: you get a 100 % bonus on such transfers from your left to your right pocket; and you will get it after 90 days after the transaction happened - or at the next accounting run after 90 days - have not seen the details on that one)
- afterward this 3 month they will add 10 % to every EUR transferred that way after 3 months (read: the bonus drops from 100 to 10 %)
To me, this sounds like a deal. Where can you get 100 % or 10 % interest nowadays? And: I can always transfer the money from my call money account back to my checking account. It is really just left pocket to right pocket. I have no transaction fees. No time delay ...
While I will not get rich on this or secure my old age pension - millions of transactions could impact the earnings of comdirect. So I doubt, they really have to pay for all this.
Question (and I am totally sure 100 % of readers can provide speculative answers on that one and I expect such multi-line comments on the blog by all of you!):
- why does comdirect offer this?
- is it just to boost turnover with their own VISA cards?
- or can they make up for the costs of doubling / adding 10 % to such transfers by earning interest, getting refunds from VISA, etc?
- just explain the (possible) business case behind that offer to me
Awaiting your postings !
PS: I will write comdirect Investor Relations a question regarding the thinking behind this offer. If they answer, we can compare your comments to their answer.
The deal is:
- for every payment you do with your comdirect VISA card, they will round up the amount to a whole EUR (so if you fill up your tank for 70.01 EUR as you did not hit the 70.00 number, as you usually try, they will charge you 71 EUR)
- the excess amount will be transferred to your Tagesgeld-Konto (call money account), which has a yield of appr. 2 %
- so your Griokonto (checking account) will be charged somewhat higher, but the difference goes to your interest earning call money account
- for the first 3 months, they will double every EUR transferred to your call money account that way after 3 months (read: you get a 100 % bonus on such transfers from your left to your right pocket; and you will get it after 90 days after the transaction happened - or at the next accounting run after 90 days - have not seen the details on that one)
- afterward this 3 month they will add 10 % to every EUR transferred that way after 3 months (read: the bonus drops from 100 to 10 %)
To me, this sounds like a deal. Where can you get 100 % or 10 % interest nowadays? And: I can always transfer the money from my call money account back to my checking account. It is really just left pocket to right pocket. I have no transaction fees. No time delay ...
While I will not get rich on this or secure my old age pension - millions of transactions could impact the earnings of comdirect. So I doubt, they really have to pay for all this.
Question (and I am totally sure 100 % of readers can provide speculative answers on that one and I expect such multi-line comments on the blog by all of you!):
- why does comdirect offer this?
- is it just to boost turnover with their own VISA cards?
- or can they make up for the costs of doubling / adding 10 % to such transfers by earning interest, getting refunds from VISA, etc?
- just explain the (possible) business case behind that offer to me
Awaiting your postings !
PS: I will write comdirect Investor Relations a question regarding the thinking behind this offer. If they answer, we can compare your comments to their answer.
9/22/2012
Morphosys
We did speak about 10-year-highs lately. With Morphosys, we have a stock that just made a +10 % jump to new all time highs on Friday.
Morphosys is one of the stocks I watch since years. Its business modell is split into 3 parts:
- (1) solid cash stream from the proprietary anti-body library
- (2) partnering with pharma companies all over the world using the human anti-bodies technology to develop new pharmaceuticals
- (3) developing own pharmaceuticals
While (1) provides solid cash flows, (2) can be very profitable. If companies like Novartis would develop a new blockbuster with the anti-body-technology, Morphosys would get a percentage of the turnover. And the definition of a pharmaceutical blockbuster is: 1 USD bn turnover a year or more.
Even if those pharmaceuticals would never hit the market, Morphosys is entitled to milestone-payments in the process of development.
Well, I gained a little knowledge on development of pharma products: this is a process, where only a very small number of possible candidates will finally become a product. And it has not only to do with the management quality of the company. Once you have developed the substance, you have to go through several test phases. Demonstrate that the product does no harm; that it has positive effects on the illness you want to treat. Increasing number of participants in the studies. Higher costs with each step. But also increasing likeliness for success. Phase 0, Phase 1 ... and so on - each phase regulated by drug authorities.
And Morphosys would get payments for each development stage achieved by one of its partner companies.
The real leverage is (3), where Morphosys uses the cash from (1) and (2) to develop its own pharma product with its own technology. It will perhaps never be able to market it, like a Pfizer, a Glaxo or a Bayer. But having developed it, it could be sold for a huge number to big pharma.
Downside: as long as there is cash from (1) and (2), Morphosys can go on with R&D. And the cash stream from (1) and (2) is getting higher by the years, Morphosys having set aside USD 100 mn. This alone would be good enough for 5 to 8 years of proprietary development. So there is no downside, as long as they have ideas for further development.
Upside: they hit something big.
On Friday they announced Phase 1b/2a results of their MOR103 project. MOR103 was safe and had no harmfull side-effects. The project has the potential to become one of the first drugs against rheumatoid arthritis (RA), which is harming millions of people.
Stocks did rise by 15 % on Friday.
MOR103 has a higher chance to fail than to succeed. That's the way it is with drug development. Morphosys has not only one project, but several ... Still the stock is like a lottery ticket. Maybe they hit big - who knows.
Difference to so many BioTech start-ups is: they are funded and will stay funded. Their business model provides cash flow - and you are not getting harmed by stock dilution. So: little downside.
I got my lottery ticket. How about yours?
Morphosys is one of the stocks I watch since years. Its business modell is split into 3 parts:
- (1) solid cash stream from the proprietary anti-body library
- (2) partnering with pharma companies all over the world using the human anti-bodies technology to develop new pharmaceuticals
- (3) developing own pharmaceuticals
While (1) provides solid cash flows, (2) can be very profitable. If companies like Novartis would develop a new blockbuster with the anti-body-technology, Morphosys would get a percentage of the turnover. And the definition of a pharmaceutical blockbuster is: 1 USD bn turnover a year or more.
Even if those pharmaceuticals would never hit the market, Morphosys is entitled to milestone-payments in the process of development.
Well, I gained a little knowledge on development of pharma products: this is a process, where only a very small number of possible candidates will finally become a product. And it has not only to do with the management quality of the company. Once you have developed the substance, you have to go through several test phases. Demonstrate that the product does no harm; that it has positive effects on the illness you want to treat. Increasing number of participants in the studies. Higher costs with each step. But also increasing likeliness for success. Phase 0, Phase 1 ... and so on - each phase regulated by drug authorities.
And Morphosys would get payments for each development stage achieved by one of its partner companies.
The real leverage is (3), where Morphosys uses the cash from (1) and (2) to develop its own pharma product with its own technology. It will perhaps never be able to market it, like a Pfizer, a Glaxo or a Bayer. But having developed it, it could be sold for a huge number to big pharma.
Downside: as long as there is cash from (1) and (2), Morphosys can go on with R&D. And the cash stream from (1) and (2) is getting higher by the years, Morphosys having set aside USD 100 mn. This alone would be good enough for 5 to 8 years of proprietary development. So there is no downside, as long as they have ideas for further development.
Upside: they hit something big.
On Friday they announced Phase 1b/2a results of their MOR103 project. MOR103 was safe and had no harmfull side-effects. The project has the potential to become one of the first drugs against rheumatoid arthritis (RA), which is harming millions of people.
Stocks did rise by 15 % on Friday.
MOR103 has a higher chance to fail than to succeed. That's the way it is with drug development. Morphosys has not only one project, but several ... Still the stock is like a lottery ticket. Maybe they hit big - who knows.
Difference to so many BioTech start-ups is: they are funded and will stay funded. Their business model provides cash flow - and you are not getting harmed by stock dilution. So: little downside.
I got my lottery ticket. How about yours?
9/17/2012
10-year Highs
Did you worry about 10-year highs latetly?
Given the circumstances, I guess you did not. We have a EURO-crisis just in front of us. EZB is throwing paper on us and calling it money. US is not growing fast enough, so the FED opted for QE3. Emerging countries growth rates disappointed lately. And in China 1/3 of the public listed companies reported negative cash results for Q2 2012.
Sounds like a vibrant economy.
So, how many of the DAX30 companies are close to 10 year-highs today?
How many of the DOW30?
How close are DAX30, DOW30 and S&P500 to 10 year-highs? 10 %? 25 %? 50 %?
Adidas - Basf - Bayer - FMC - FMCE - Henkel - Linde - SAP - VW ... why are they all close to 10 year highs?
Disney - Home Depot - Honeywell - IBM - Verizon - WalMart ... why are they all close to 10 year highs?
Reality Check!
It's more important to know where the market moves then why the market moves.
Given the circumstances, I guess you did not. We have a EURO-crisis just in front of us. EZB is throwing paper on us and calling it money. US is not growing fast enough, so the FED opted for QE3. Emerging countries growth rates disappointed lately. And in China 1/3 of the public listed companies reported negative cash results for Q2 2012.
Sounds like a vibrant economy.
So, how many of the DAX30 companies are close to 10 year-highs today?
How many of the DOW30?
How close are DAX30, DOW30 and S&P500 to 10 year-highs? 10 %? 25 %? 50 %?
Adidas - Basf - Bayer - FMC - FMCE - Henkel - Linde - SAP - VW ... why are they all close to 10 year highs?
Disney - Home Depot - Honeywell - IBM - Verizon - WalMart ... why are they all close to 10 year highs?
Reality Check!
It's more important to know where the market moves then why the market moves.
9/09/2012
EZB decission destabilizes FX markets
ECB decided last week on buying 'unlimited' amounts of short-term bonds to address distortions and 'unfounded' fears of investors about the survival of the EURO. Only the German Bundesbank and his head Jens Weidmann objected to the plan. The operation will address the secondary market, not buying troubled / toxic bonds from the PIGS and other stressed countries directly.
The announcement led to a spike in European stocks, with the DAX closing above 7.200 on Friday; the EuroStoxx50 above 2.500; the Swiss Market Index SMI above 6.500, and a rise of the FTSE from 5.650 to 5.800 at the end of the week. The DOW30 is clearly above 13.000 now and the S&P500 continues its way to 1.500 ...
This all, despite worsening economic outlook around the globe.
Gold jumped to 1.735 and is on the rise again. The consolidation form the last peak above 1.900 USD lasted above one year and the metal seems to gain momentum again. Silver also spiked to 33.6 USD - gaining 10 % in the last 10 days.
So far you can argue that the markets had not discounted all the additional liquidity from the ECB move and made up for it on Thursday and Friday. With a move that will clearly push inflation up, this seems logical - and you never know who did bet on Draghi's announcement before the fact and who jumped the train when he was leaving the station.
It gets a little bit weird when you look at the USD/EUR ratio, which jumped to 1.2815. Comments here state an increased trust in the EURO and weak US labor market data. Well, you can understand those arguments per se. But together with rising stock markets the make less sense.
Even more astonishing was the move of the Swiss Franc (CHF) to me. In recent month it was kept close to 1.20 CHF/EUR by massive intervention of the Swiss National Bank (SNB). Estimated EUR 50 to 100 bn where bought by the SNB each month in order to keep the 1.20 ratio established. This lead to a huge spike in foreign currency reserves of the SNB. Recently comments on how long this procedure can be kept up got more vivid.
It is unclear, what led to the CHF jump above 1.21 vs. the EUR at the end of the week. One reason could be that money left the CHF as trust in the stabilization of the EURO-zone did rise. Ohter reason would be, that the pressure on the SNB to buy EURO was lifted somewhat by the EZB comments and following expectations of the market.
In that case, it was maybe a wise move of the SNB not to start selling EURO immediately but let the CHF get awy from the 1.20 limit set. If the market could drive the ratio to lets say 1.25, the SNB could even take some profit from the intervention - starting to sell EURO at such a level.
One other think I am always a little bit worried about: When markets move fast, at a weekend - and with all the manipulation from governments we have to live with nowadays - can the regulators and bureaucrats act fast enough? We know that the EU summits are often on weekends, so that markets are not directly influenced. Decisions have to be made, before Monday morning Asia starts to trade.
But are there really SNB bankers with authority to change the trading strategy available Friday afternoon, when New York is still trading? Or can the market catch them off guard?
The announcement led to a spike in European stocks, with the DAX closing above 7.200 on Friday; the EuroStoxx50 above 2.500; the Swiss Market Index SMI above 6.500, and a rise of the FTSE from 5.650 to 5.800 at the end of the week. The DOW30 is clearly above 13.000 now and the S&P500 continues its way to 1.500 ...
This all, despite worsening economic outlook around the globe.
Gold jumped to 1.735 and is on the rise again. The consolidation form the last peak above 1.900 USD lasted above one year and the metal seems to gain momentum again. Silver also spiked to 33.6 USD - gaining 10 % in the last 10 days.
So far you can argue that the markets had not discounted all the additional liquidity from the ECB move and made up for it on Thursday and Friday. With a move that will clearly push inflation up, this seems logical - and you never know who did bet on Draghi's announcement before the fact and who jumped the train when he was leaving the station.
It gets a little bit weird when you look at the USD/EUR ratio, which jumped to 1.2815. Comments here state an increased trust in the EURO and weak US labor market data. Well, you can understand those arguments per se. But together with rising stock markets the make less sense.
Even more astonishing was the move of the Swiss Franc (CHF) to me. In recent month it was kept close to 1.20 CHF/EUR by massive intervention of the Swiss National Bank (SNB). Estimated EUR 50 to 100 bn where bought by the SNB each month in order to keep the 1.20 ratio established. This lead to a huge spike in foreign currency reserves of the SNB. Recently comments on how long this procedure can be kept up got more vivid.
It is unclear, what led to the CHF jump above 1.21 vs. the EUR at the end of the week. One reason could be that money left the CHF as trust in the stabilization of the EURO-zone did rise. Ohter reason would be, that the pressure on the SNB to buy EURO was lifted somewhat by the EZB comments and following expectations of the market.
In that case, it was maybe a wise move of the SNB not to start selling EURO immediately but let the CHF get awy from the 1.20 limit set. If the market could drive the ratio to lets say 1.25, the SNB could even take some profit from the intervention - starting to sell EURO at such a level.
One other think I am always a little bit worried about: When markets move fast, at a weekend - and with all the manipulation from governments we have to live with nowadays - can the regulators and bureaucrats act fast enough? We know that the EU summits are often on weekends, so that markets are not directly influenced. Decisions have to be made, before Monday morning Asia starts to trade.
But are there really SNB bankers with authority to change the trading strategy available Friday afternoon, when New York is still trading? Or can the market catch them off guard?
9/06/2012
One step further down the road ...
Here we are ... one step further down the road.
This is a day to lean back, get a glass of heavy (Spain) wine, some (French) cheese, a little bit of fresh (German) air ... and regroup.
So we will have massive EZB bond buying without limits for any EURO-country seeking cover. We stand here at 1.700 USD Gold. Or 1.350 EUR Gold. Stock markets did rise 2 to 3 % today - ignoring all the bad data on economic outlook.
I think we should not underestimate crowd intelligence here. Markets are on a rise for a reason.
Actually, I think we know what is happening here. WE WATCH MONEY DIE.
We do not want to believe it. We think that is such a silly approach, that it can not, should not and will not happen. It is against our gut feelings.
We fear it.
But it happens. Year after year - step after step.
Take action!
Buy hard assets.
Buy gold.
Buy silver.
Buy platinum.
Store in different countries, as it might get confiscated.
Buy stocks.
Get out of paper money.
Raise credit levels.
Do not pay back earlier than you need to.
Go into debt.
Listen what the market and the numbers are telling. And accept the truth.
This is a day to lean back, get a glass of heavy (Spain) wine, some (French) cheese, a little bit of fresh (German) air ... and regroup.
So we will have massive EZB bond buying without limits for any EURO-country seeking cover. We stand here at 1.700 USD Gold. Or 1.350 EUR Gold. Stock markets did rise 2 to 3 % today - ignoring all the bad data on economic outlook.
I think we should not underestimate crowd intelligence here. Markets are on a rise for a reason.
Actually, I think we know what is happening here. WE WATCH MONEY DIE.
We do not want to believe it. We think that is such a silly approach, that it can not, should not and will not happen. It is against our gut feelings.
We fear it.
But it happens. Year after year - step after step.
Take action!
Buy hard assets.
Buy gold.
Buy silver.
Buy platinum.
Store in different countries, as it might get confiscated.
Buy stocks.
Get out of paper money.
Raise credit levels.
Do not pay back earlier than you need to.
Go into debt.
Listen what the market and the numbers are telling. And accept the truth.
9/01/2012
Interesting Developments
Going through charts on stocks I am interested in, I noticed a few interesting ones I want to share with you:
Fuchs Petrolub: First of them is Fuchs Petrolub. It's one of the solid companies in the German MDAX and it just reached a new 10-years high. The chart also looks like a clear outbreak to the upside during the last weeks. Sure, you might argue: why should I buy now at new highs. Counterquestion: why should the stock / company stop to perform, just because you buy a neglect-able amount of their stock?
Next one looking very interesting is in the silver / gold field. With Jackson Hole speeches of B52-Bernanke and the expectation that the bazooka will be used by EZB bankers to safe the EUR, gold and silver picked up during the last fortnight. There are several very solid companies, that show interesting charts with this background keeping in mind:
Silver Wheaton: This is one I hold for long times. Its not a producer, but a financier of producers. In return, it gets a stream of silver ounces at a fixed price. So when silver if gold on steroids (because it moves same direction, but faster), then Silver Wheaton is silver on steroids (or gold on steroids²). To me, it is a very solid managed company paying some, but fast rising dividends. And its easy to understand for any guys used to crunching numbers.
Agnico-Eagle Mines: This one attacks the 50 USD range now fast. It dropped below that level, after it had a water entry into one of its mines and could not keep up production there. Its one of the best managed gold miners, dividend paying, with the downside priced in. If it could move up a little bit further, it could spike.
Both Silver Wheaton and AEM show little exposition to political risk, as they mainly operate (or finance) projects in political safe jurisdictions (North America, Europe).
Hope you consider investing in one of the three and even more so hope you make good profits.
--------------
This is no solicitation, offer or recommendation to buy or sell any of the stocks, securities or financial products mentioned. Not all possible risks of any investment in products mentioned above are covered here. Do your own financial due diligence. You invest on your own risk.
Fuchs Petrolub: First of them is Fuchs Petrolub. It's one of the solid companies in the German MDAX and it just reached a new 10-years high. The chart also looks like a clear outbreak to the upside during the last weeks. Sure, you might argue: why should I buy now at new highs. Counterquestion: why should the stock / company stop to perform, just because you buy a neglect-able amount of their stock?
Next one looking very interesting is in the silver / gold field. With Jackson Hole speeches of B52-Bernanke and the expectation that the bazooka will be used by EZB bankers to safe the EUR, gold and silver picked up during the last fortnight. There are several very solid companies, that show interesting charts with this background keeping in mind:
Silver Wheaton: This is one I hold for long times. Its not a producer, but a financier of producers. In return, it gets a stream of silver ounces at a fixed price. So when silver if gold on steroids (because it moves same direction, but faster), then Silver Wheaton is silver on steroids (or gold on steroids²). To me, it is a very solid managed company paying some, but fast rising dividends. And its easy to understand for any guys used to crunching numbers.
Both Silver Wheaton and AEM show little exposition to political risk, as they mainly operate (or finance) projects in political safe jurisdictions (North America, Europe).
Hope you consider investing in one of the three and even more so hope you make good profits.
--------------
This is no solicitation, offer or recommendation to buy or sell any of the stocks, securities or financial products mentioned. Not all possible risks of any investment in products mentioned above are covered here. Do your own financial due diligence. You invest on your own risk.
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