# Research, reports and other stuff



## doctorj (13 February 2009)

Credit Suisse's Global Investment Returns Yearbook 2009.

In it, CS discover that if you're timeframe is atleast 108 years, inflation and growth will ensure you make a profit on your equity portfolio (amongst other equally revolutionary ideas).

Toot toot!


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## doctorj (13 February 2009)

John Taylor - Author of the Taylor Rule.

Taylor asks the question what went wrong and modestly answers it by showing that had central banks followed HIS RULE, everything would have been hunky dory.


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## doctorj (13 February 2009)

Fitch puts out some of the best Emerging Market stuff IMHO.  Anyone with an interest in the region should find something interesting.


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## doctorj (13 February 2009)

UBS - Economic Insights - By George

[FONT=Frutiger45Light,Bold]_Financial instability, and the final countdown? More capital, bad banks and, where necessary, nationalisation_
[/FONT]


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## doctorj (13 February 2009)

Deutsche Bank - Bretton Woods II , protectionism and global economic activity.


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## doctorj (13 February 2009)

Credit Suisse put out a more meaty companion to the year book, posted earlier.


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## doctorj (13 February 2009)

One that's relavent to most here - Citibank asks if miners have found a base?


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## doctorj (13 February 2009)

UBS' quants look at what would happen if all FTSE companies cut dividends.


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## doctorj (14 February 2009)

A very witty, easy read from the Bank of England.  One of the best pieces I've read about how the banks failed.


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## doctorj (14 February 2009)

You (probably) read it here first - it looks like the tide may be about to go out on another Ponzi scheme (a'la Madoff).  This time it's a Caribbean bank owned by a rich Texan famous for sponsoring a $20 million winner-takes-all game of 20/20 Cricket.

£8 bill of assets...

The financial press is just starting to get wind of this, but here's the original article that started it all published in Venezuala.


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## doctorj (17 February 2009)

JP Morgan's FX market weekly


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## Sean K (17 February 2009)

Thanks doctorj, some good reading there. kennas


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## mattlaw (17 February 2009)

Thanks Doctorj, keep up the good work. Much appreciated.


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## doctorj (17 February 2009)

Interesting comparison.  I wonder where things sit a month or so later?


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## doctorj (17 February 2009)

It looks like the next evolution of the crisis will be bank's exposure to emerging markets through their subsidiaries. Moody's released a note this morning (attached) warning of it and since then Unicredit CDS increased to over 200bps.

Most banks with large exposures to emerging markets have been downgraded by S&P and remain on a negative outlook (eg. Raiffeisen, Unicredit & SocGen). Austria’s finance minister warned of the risk of an economic “catastrophe” in Ukraine triggering a “domino effect” of problems further west (rightly so - the Austrian banking sector is both highly exposed to emerging markets - 70% of assets - and highly leveraged). Just a 10% increase in the default rate in emerging markets would result in the failure of many Austrian banks.

Other Western countries with large exposures to emerging market banks are Spain (South America), Italy (Eastern Europe), Sweden (Baltics). A useful chart is attached to demonstrate.

What does this mean for ASX investors? Potentially the end of the "BR" in BRIC as the driver for... well... everything.


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## doctorj (18 February 2009)

doctorj said:


> It looks like the next evolution of the crisis will be bank's exposure to emerging markets through their subsidiaries.



Some more fun facts along this train of thought...

–80% of Hungarian mortgages in CHF, Forint down 32% against CHF 
–60% of Polish mortgages in CHF, Zloty down ~50% against CHF 
–There's a similar pattern in Croatia, Romania and much of eastern Europe.

CHF was the 2nd largest 'carry trade' behind everyone's favourite, the Yen.

Oh and further to my comment's about Ukraine (below), their Finance Minister resigned recently after the parliament passed a budget for 2009 that violated the covenants of the IMF's $16.4bn bail out package. Unless something changes, the second tranche of the package is dead in the water.  Austria are very right to be _very worried._

Eastern Europe has to roll ~US$400bn of foreign debt this year (1/3 of the region's GDP).


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## doctorj (18 February 2009)

doctorj said:


> You (probably) read it here first - it looks like the tide may be about to go out on another Ponzi scheme (a'la Madoff). This time it's a Caribbean bank owned by a rich Texan famous for sponsoring a $20 million winner-takes-all game of 20/20 Cricket.




To follow up - this just came through a few minutes ago.



> SEC charges Stanford with fraud
> The Securities and Exchange Commission on Tuesday charged Sir Robert Allen Stanford, the billionaire Texan businessmen, of a "massive, ongoing fraud" through his Antigua-based offshore bank.
> Stanford International Bank, located in St John’s on the Caribbean island of Antigua, has been the focal point of much controversy in recent weeks, sparked in part by an analyst note that was highly critical of the bank’s apparent ability to deliver consistently and significantly market beating returns on its $8.5bn portfolio of depositors’ assets.
> SIB had been the subject of a joint investigation
> ...





Read more: http://www.ft.com/cms/s/0/7b159fda-fd13-11dd-a103-000077b07658.html


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## prawn_86 (18 February 2009)

doctorj said:


> To follow up - this just came through a few minutes ago.
> 
> 
> 
> Read more: http://www.ft.com/cms/s/0/7b159fda-fd13-11dd-a103-000077b07658.html[/SIZE]




Well done Doc, your on the ball 

Now to find time to actually read all these in detail....


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## doctorj (18 February 2009)

This is from the Financial Times.  The top line shows Stanford's alleged returns (interest on deposits) and the bottom shows the returns on the Dow.


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## doctorj (18 February 2009)

"Alt A" mortgages the next wave. 



> The sums involved are depressingly large. In the worst case, losses on the $600 billion of securitised Alt-A debt outstanding””roughly the same as the stock of subprime securities””could reach $150 billion, reckons David Watts of CreditSights, a research firm. Analysts at Goldman Sachs put possible write-downs on the $1.3 trillion of total Alt-A debt””including both securitised and unsecuritised loans””at $600 billion, almost as much as expected subprime losses. Add in option ARMs, a particularly virulent type of adjustable-rate loan, many of which are essentially the same as Alt-A, and the potential hit climbs towards $1 trillion.




http://www.economist.com/daily/news/PrinterFriendly.cfm?story_id=13061713


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## doctorj (19 February 2009)

7 very bold predictions.



> *Prediction 3: Oil will cease being priced exclusively in dollars.*
> DeGaulle once decried the dollar’s "exorbitant privilege" of exclusivity in the pricing of the world’s commodities. At some point, quite possibly before the close of 2009, this monopoly will end. Russia is as likely as any resource economy to end it.


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## doctorj (20 February 2009)

Chart de jour.


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## doctorj (24 February 2009)

S&P report Australia faces a 'mild' recession.


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## doctorj (27 February 2009)

UBS claim the EE banking crisis is all over blown and we should all be buying as much Erste (et al) as we can...


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## doctorj (4 March 2009)

Apologies for not posting anything of late - it's largely a reflection of the absence of new developments.  Banks are still losing money, property prices are still falling and AIG is still a train wreck.  Nothing to see here, move along.

Not quite.  The RBA bucked the trend and didn't cut interest rates.  Great for the Australian dollar.  What might it mean for the wider economy though? The upshot clearly is the bank gets to 'keep some of its powder dry' while it waits to see the impact of the stimulus package.  In this, Australia was well placed relative to the likes of US/UK in that rates entered this crisis - supposedly giving us more ammunition to begin with.  The downside is that it really does pin hopes on the stimulus package.  What if the $900 does nothing but create a one-off jump in the savings rate (through everyone paying it off their credit card).  With the stimulus package to commence disbursement in the next month or so, how long will the reserve bank wait to see the impact?  There is a real danger of it's wait and see approach resulting in Australia having rates that are too high for too long.

A very high stakes game indeed given so much of the GDP is reliant on USD exports of commodities that have already plummeted in price. The recession we have to have or the one we couldn't avoid?

In reality, probably a little of both.  Despite all the raw data, computing power and quant geeks we have these days, we still can't master the economic cycle.  

And with that, here's today's reading.  A paper from the Bank for International Settlements, a very timely discussion of liquidity and financial cycles.


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## doctorj (5 March 2009)

JP Morgan have taken a look at how deep the recession will be and what deleveraging may mean for the global economy.  Decent brief presentation.


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## Porper (5 March 2009)

doctorj said:


> JP Morgan have taken a look at how deep the recession will be and what deleveraging may mean for the global economy.  Decent brief presentation.




So soon is the time to buy up big with our ears pinned back ?

This recession isn't that bad, don't know what all the fuss has been about then,


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## prawn_86 (5 March 2009)

Porper said:


> This recession isn't that bad, don't know what all the fuss has been about then,




Tyr being a grad looking for a job with 1000's of other out of work that already have experience...


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## Agentm (5 March 2009)

thank you for your very insightful reports doctorj

much appreciated


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## doctorj (5 March 2009)

More than happy to continue sharing these things as I come across them - things are a little slow at the moment as most of the stuff I'm seeing is very UK and Eastern Europe-centric.  Probably not that interesting for most on here.  Feel free to discuss/debate the points raised on here, reading into a lot of these it becomes quickly apparent that the people writing these things aren't a great deal more sophisticated than journalists.  Their single advantage is they tend to be on the curve or maybe a little ahead of it.

Trivia of the day:-
Take a guess how many series 7 BMWs were sold in total in the US last month.

a) 0-10
b) 11-100
c) 101-1,000
d) 1,001-10,000
e) More than 10,000

Answer here: http://www.marketwatch.com/news/sto...45374-F5FD-4042-9C91-9C37A9BFC3FA}&dist=msr_3


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## doctorj (5 March 2009)

Porper said:


> This recession isn't that bad, don't know what all the fuss has been about then,



Economic downturns will effect those countries, people and businesses least equiped to deal with it first.  Unskilled workers, new entrants (as Prawn pointed out) and those with highly specialised skills for highly cyclical industries are the first out.

On a country level, you could look at Ukraine.  Unstable government, a weak currency without the reserve backing of its neighbours (RUB, KZT), highly cyclical major industries (Steel, agriculture) and a poor indigenous banking system.

These types of examples were the economic bellwether of a wider economic crisis.  

As the recession deapens and lengthens, its influence will spread to those in the economy more well off. 

Lets also not forget that there is plenty of research to support the idea the stockmarket leads the real economy (this is a reasonably intuitive conclusion) by several months.  If so, the real economy has a way to go yet.

It's always darkest before the dawn.


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## doctorj (6 March 2009)

Barclays Capital have taken a long, hard look at the tea leaves and are calling for a "massive upside" breakout in copper.


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## Bushman (6 March 2009)

Citi does the A-REITs; lol. It's like watching Princess Di dance with Lord Mountbatten. 

View attachment Citi real estate handbook.pdf


PS: best quote about the REITs, the banks etc 'even the pretty girls get hurt in a bus crash'.


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## doctorj (10 March 2009)

This is is from Doug Short (dshort.com) via the FT.

Markets are now falling faster than they did in 1929-1932.


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## doctorj (11 March 2009)

UBS asks 'is gold money?' and predicts an upside to gold of up to USD2,500/oz


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## nizar (11 March 2009)

doctorj said:


> Trivia of the day:-
> Take a guess how many series 7 BMWs were sold in total in the US last month.
> 
> a) 0-10
> ...




LOL unbelievable.


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## doctorj (26 March 2009)

I've been rather quite for a while. 

Today BarCap claimed we're already seeing the beginning of the end.




.... and if they keep doing so, I'm sure one day they'll be right.


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## sinner (26 March 2009)

hi doctorj,

Not a bad analysis I guess.

Very optimistic, but frankly, on some points I agree, various asset classes have been smashed since July last year and represent good long term buys.

Very weird to see they don't like consumer staples and healthcare in the "equities" section but like them in the "credit" section? 

In the end they recommend Materials, Energy and Industrials.

If you look at the corresponding ASX 200 GICS indices we are looking at XMJ, XEJ and XNJ. I advise anyone reading the above analysis to check out the charts for these indices to see how our economy is responding compared to others.

My long term investment portfolio is still only really long gold miners (which counts as materials!  and oil/gas. I was already heavy on energy plays from oil at $30 thanks to the huge USO MACD crossover I was watching on the weekly chart.

For materials I like MCR (nickel, no debt), and maybe MCC on coal or GCL if they don't get taken over.

All the industrials seem to be geared to the hilt and still running on boom-time principles, so I am not going there.


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## doctorj (27 March 2009)

The G20 edition of the FT is an absolute riot if you have the time.


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## doctorj (31 March 2009)

Apologies for the bulk update, but unfortunately ASF had some temporary issues on Friday.

Those with interest or exposure to investment banks (eg Macquarie or its vehicles) should find the Morgan Stanley report great, if a little lengthy at 80 odd pages.

The peak oil presentation was interesting also and worth a captain cook.  And Deutsche Bank will tell you all you'd ever want to know about hedge funds (and more, much more).


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## doctorj (31 March 2009)

Here's an _absolutely essential _read on US crisis being an emerging market problem from the former chief economist of the IMF.

http://www.theatlantic.com/doc/200905/imf-advice


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## doctorj (3 April 2009)

Gold bugs may or may not be aware the IMF plans to sell a considerable portion of their gold reserves as one of the outcomes of the G20 summit.

This note looks at the potential impact of the sale of on the market price for gold.


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## Garpal Gumnut (3 April 2009)

doctorj said:


> Here's an _absolutely essential _read on US crisis being an emerging market problem from the former chief economist of the IMF.
> 
> http://www.theatlantic.com/doc/200905/imf-advice




I haven't read it mate but economists by definition are bad drivers with an eye on the rear mirror for comment on the present. 

Thus they have prangs.

gg


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## Julia (3 April 2009)

Garpal Gumnut said:


> I haven't read it mate but economists by definition are bad drivers with an eye on the rear mirror for comment on the present.
> 
> Thus they have prangs.
> 
> gg



Such appropriate succinctness again, g.g.


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## doctorj (7 April 2009)

Morgan Stanley say the bear market isn't over and they're selling equities.


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## sinner (7 April 2009)

doctorj said:


> Here's an _absolutely essential _read on US crisis being an emerging market problem from the former chief economist of the IMF.
> 
> http://www.theatlantic.com/doc/200905/imf-advice




Hi doc,

Do you mind if I add a similar article which is also a must read.

http://finance.yahoo.com/techticker/article/225897/Geithner's-Stress-Test


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## doctorj (7 April 2009)

sinner said:


> Hi doc,
> 
> Do you mind if I add a similar article which is also a must read.
> 
> http://finance.yahoo.com/techticker/article/225897/Geithner's-Stress-Test



Be my guest.  The more, the merrier.  It's getting a little dull talking to myself in here.


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## Bushman (10 June 2009)

The Westpac consumer sentiment indicator has turned the corner and is showing positive signs. It is more of a confidence indicator (i.e. 'we avioded a technical recesssion so I've a better chance of keeping my job' type sentiment) but consumers spending is a good thing for Western economies. 


View attachment er20090610BullConsumerSentiment.pdf


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## Bushman (13 August 2009)

Attached is a link to one of the better investment overviews I have read in recent times. Have a read. 

Copyright means that the memo cannot be reproduced so you will need to follow the web-site link. 

http://www.oaktreecapital.com/memo.aspx

PS: this thread has died off of recent times? Pity as no matter what you think about the conflicts of interest in analyst world, there is some very useful data and opinions out there.


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## Bushman (2 February 2010)

Study by McKinsey Global Institute about the deleveraging cycle we will be going through over the next few years. 

http://www.mckinsey.com/mgi/reports...eraging/debt_and_deleveraging_full_report.pdf


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## doctorj (17 February 2010)

I haven't posted here for a while (not sure if anyone is reading).  The attached report is one of the most interesting I've read in some time.  It deals with trading strategies in sideways markets.  Those that have profited heavily from trend-following strategies should give it a read.


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## Trembling Hand (17 February 2010)

DoctorJ when ever I read these studies I get a sneaking suspicion that their stats of performance are not ever as good in real live as they quote. There was no mention of accounting for survivorship bias. 

Over the period they were talking about stacks of companies would of dropped out of the indexes and like wise many added. Its always dodgy to take these "38 % of stock double over 3 years" quotes when they don't explicitly say they include the starting list of index constituents rather than the ending list. makes a big diff.

But in any case I like this thread, keep'em coming.


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## doctorj (17 February 2010)

Trembling Hand said:


> DoctorJ when ever I read these studies I get a sneaking suspicion that their stats of performance are not ever as good in real live as they quote. There was no mention of accounting for survivorship bias.
> 
> Over the period they were talking about stacks of companies would of dropped out of the indexes and like wise many added. Its always dodgy to take these "38 % of stock double over 3 years" quotes when they don't explicitly say they include the starting list of index constituents rather than the ending list. makes a big diff.
> 
> But in any case I like this thread, keep'em coming.



Could always email the author and ask?


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## doctorj (18 February 2010)

An interesting study of the 10 lessons not learnt by the markets, including the anatomy of a bubble, why funds don't outperform and why everyone needs to move on from EMH.


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## enigmatic (19 February 2010)

My question to you from concerning the leggmason-sidewardmarkets

Maybe I'm missing the point but isn't 100% over one year far different to 100% over 5years. If we were talking about annual growth I could understand the comparison i could understand it however we are comparing 100%+ annual growth to 15%+ annual growth. whats is the point of these two comparisons.


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## doctorj (19 February 2010)

enigmatic said:


> My question to you from concerning the leggmason-sidewardmarkets
> 
> Maybe I'm missing the point but isn't 100% over one year far different to 100% over 5years. If we were talking about annual growth I could understand the comparison i could understand it however we are comparing 100%+ annual growth to 15%+ annual growth. whats is the point of these two comparisons.



Of course they're very different.  One return is solid, the other is astronomical. 15%, year in, year out is nothing to be sneezed at, especially when the index is doing nothing.  To be honest, I doubt all that many here returned 15% on average, each year for 5 years during the good times.


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## Timmy (5 March 2010)

Don't know if the report is any good, haven't read it yet.  But the title is outstanding! 

*Sovereign CDS - You Can't Blame the Mirror for Your Ugly Face*


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## happytown (16 March 2010)

recently released report on lehman brothers collapse

http://www.lehmanreport.jenner.com/


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## doctorj (17 March 2010)

Ever wonder what lasting impact, if any, the global financial crisis will have on you?  Well, you'll be an unmarried alcoholic with one or more children that's unlikely to live as long as your parents.  

Or so says Don Peck of The Atlantic - http://www.theatlantic.com/magazine...-new-jobless-era-will-transform-america/7919/

It's a well written article (if a little long) that should encourage a little naval gazing if you're under 25.  One particularly interesting fact from the article was a study that proved a graduate's first job was overwhelming the primary factor in lifetime earnings. The lesson? It's unlikely you'll be able to trade up to a high-earning career if you start out in a lower earning position.


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## newbie trader (17 March 2010)

doctorj said:


> The lesson? It's unlikely you'll be able to trade up to a high-earning career if you start out in a lower earning position.




A friend of a friend of mine about 3 weeks ago was head hunted by a fortune 500 company. He graduates this year and they are offering him a starting salary of 400,000 first year out...i dont think he will have to trade up!

N.T


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## happytown (29 March 2010)

late '09 paper on shorting:

"buy on the rumor, [short] sell on the news: short sellers, news, and information processing"

http://www.sec.gov/comments/s7-08-09/s70809-4636.pdf


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## The Owls (22 April 2010)

Good morning

"Quote SMH 
Among the major banks, ANZ was down 22 cents at $25.18, CBA fell 37 cents to $59.16, NAB was eight cents weaker at $28.38, and Westpac slipped 34 cents to $27.86".

My SMSF has the big four banks plus Bendigo Bank along with other stock. The banks are a long term investment and daily price increase or decreases  are not a concern as they are held mainly for the dividends. 
I notice the above quote this morning in the SMH that the shares dropped. Please can someone advise as to why. I am not complaining or worried just interested


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## doctorj (26 April 2010)

Australia - are things as good as they're going to get?


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## mav777 (30 April 2010)

Appreciate the papers DJ


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## doctorj (4 May 2010)

MS, Deutsche, Merrill & Citi's analysis on Henry's resource tax. The consensus opinion is well summarised by MS


MS]We believe the new tax will reduce asset values in Australia said:


> Australia - are things as good as they're going to get?



Interesting timing... I wonder if we will look back on this as a top of market move?


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## doctorj (20 May 2010)

The smartest guys in the room believe the sky isn't falling after all.  Greece?  Pffft!  They say Greece is less the canary in the coal mine and more of an amusing, if insiginificant, distraction.


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## MARKETWINNER (30 June 2013)

http://www.stuff.co.nz/business/industries/8849985/Global-investors-sell-down-Aussie-banks

Global investors sell down Aussie banks


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## PZ99 (31 January 2017)

Bump 

Good article worth reading.

*Mining resurgence to dominate early 2017 initial public offerings*

Resources companies are set to dominate share market listings early in 2017, after having been on the nose last year.

Out of 23 companies that are currently planning an initial public offering (IPO) in 2017, almost half (11) are in the resources sector.

That compares with just 12 resources-related companies listing during the whole of 2016.

"A significant proportion of these are focused on lithium and cobalt, a sign of the continuing push for materials used in the creation of energy cells," observed Macus Ohm, a partner at accounting firm HLB Mann Judd, which compiled the IPO Watch report.

In a sharp reversal on last year, only one of the planned listings is a tech company.

In 2016, around a third of the IPOs that took place involved tech or biotech companies.

Overall, last year was a solid year for IPOs, with 94 floats raising $7.5 billion.

The number of IPOs was up from 85 in 2015 and the value of the IPOs rose 7 per cent.

However, the lack of major listings meant that the amount of funds raised last year was less than half of the record $16.7 billion invested in IPOs in 2014.

HLB Mann Judd observed that the vast majority of companies achieved of exceeded their fund raising targets.

It also found that, on average, investors in IPOs beat the broader market, with a 16 per cent gain versus 7 per cent for the benchmark index.

However, subscribers to IPOs needed to be choosy, with a minority (40 out of 94) of floats finishing the year in the black, while the majority of IPOs lost value.

http://www.abc.net.au/news/2017-01-31/mining-resurgence-to-dominate-early-2017-ipos/8227564

Scotch on the... rocks


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## PZ99 (3 January 2020)

https://www.abc.net.au/news/2020-01...urge-flood-record-low-interest-rates/11833118


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## qldfrog (3 January 2020)

Basically everything...
How can this not trigger inflation?


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## Stockbailx (10 June 2021)

Elon Musk’s rocket ship company SpaceX recently received a company valuation of $44 billion, and a long-term valuation of $100 billion, with major financial institutions now poised to become a potential partner in any forthcoming IPO. What can we expect when SpaceX finally decides to launch?
After a record-breaking year for IPO’s, SpaceX now sits at the top of the chart as the largest unicorn company remaining in the private market. Following its recent valuation of $44 billion, seasoned investors are now readying themselves for its official launch.
$100 Billion Long-Term Valuation​Due to its position in the growing space industry, Morgan Stanley doubled its long-term valuation estimate for Elon Musk’s SpaceX and is now expecting the company to be worth at least $100 billion. “SpaceX continues to solidify its place as ‘mission control’ for the emerging space economy.”
$50 Million Daily Profit​Experts have forecast that SpaceX will achieve a launch cadence of 1 launch per day by 2040, and by reusing its rockets, SpaceX will bring in $67 million per launch with an operating margin of 20%.


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## Thegoat (12 June 2021)

I am here to announce WMR has released a news press stating they are listing in the Australian market. https://www.westminsterresources.com/westminster-to-list-in-australia-and-re-brand/


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## divs4ever (8 August 2021)

a wide-ranging  talk , some might find interesting ​​MARKETS, INFLATION, INTEREST RATES – BOB HOYE. GOLD, SILVER, LITHIUM, CRYPTOS – JOHN RUBINO. AMY.V​


 DYOR
​


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## Belli (26 October 2022)

I guess this fits under "other stuff."

Say farewell to off-market buybacks at a discount which includes juicy franked dividends.  Franking will not apply as at the delivery of last night's Budget.


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