Anybody who has been following my Twitter feed over the last week will know that I have been yapping on and on about the US dollar being the only place to be for December.
More specifically - long dollar short yen.
Now given what has and still is happening to the US dollar over the last 12 months, most of you are probably looking at me a little cross-eyed and wondering if I have taken my medication this morning... but hear me out.
I like the dollar going into December for a couple of reasons:
1. Say what you like about it, it will ultimately a defensive hard asset over the long run
2. Asia is stressing about their exports, at some point they are going to start putting pressure on their govts. to weaken many of their currencies to try and resucitate their export market
3. Singapore and Korea are now talking about trying to limit capital flows into their markets. Taiwan last week banned foreign investors from placing funds in time deposits on concern about currency speculation. Plenty of asset managers have been talking up the Asian currencies for a while now. Do they have the capacity to keep taking these inflows in the short-term? I don't think so.
4. Its a volume game - the two currencies who can genuinely absorb major inflows - the dollar and the yen (I'll touch on the yen now now).
5. Equity markets have run hard and there is a general sense that maybe its time to take something off the table and re-evaluate into the new year. Where are you going to park that cash?
Just for shits and giggles I am reading an article at this very moment about them evacuating people in "flood-hit Britain" - Mud Island is sinking into the sea ----> FACT
Which brings me to the Yen. The yen at 88.80 to the dollar is BAD news for Japan. A look at the Nikkei vs. Dow and S&P shows you that it the currency is doing Japanese companies no favours. In my opinion it won't move much lower and people will be looking for an excuse to buy the dollar over the yen in the short-term.
So long dollar, short yen and long Sasol are my only open positions at the moment.
Showing posts with label Japan. Show all posts
Showing posts with label Japan. Show all posts
Friday, November 20, 2009
Tuesday, October 7, 2008
Savings and Asia
I had an interesting chat to one of these "global strategy" types recently.
Normally I take what these guys have to say, with a pinch of salt, but this guy did raise some interesting financial / economic factors that I thought might be interesting to throw into the mix.
First and foremost he seemed to buck the trend of economists / corporate investment strategists who are predicting that the US will bounce back sharply in 2009.
He has tracked a number of 'bubble' financial events like the gold boom, tech bubble etc over the course of history and his model 'seems' to have been able to give some idea of how the markets are likely to perform going forward.
(I say 'seems' because in my experience it is easy to make models and data fit a pattern and say SEE I TOLD YOU SO....)
According to his model we're likely to see a liquidity driven rally hit our markets shortly but we're in all likelihood going to see a flat to negative return from now until 2013 (specifically in first world American and European markets).
In terms of client portfolios though, they are beginning to look to Asia and more specifically Japan as the area where the recovery is likely to come from.
Their thinking is that with the very high natural savings rate of people living in the Asian countries, personal and corporate balance sheets are significantly less geared than their US and European counterparts, i.e. once the dust has settled on this financial crisis, there will be a lot of
liquidity on the sidelines waiting to be injected. Simply put - INVESTORS WILL HAVE THE FREE CASH TO BE ABLE TO PARTICIPATE IN THE ECONOMIC / STOCK MARKET RECOVERY....
and THAT dear reader is the lesson that we as South Africans need to take from recent financial events.
In places like Japan, Taiwan and Singapore (and even Australia to a lesser extent) - people are saving up to 40% of their salary each month. In South Africa, the figure is something ridiculous like 2%.
(And I know at least 2 middle class white families where that figure is a big fat 0% - every cent they earn is being channeled into repaying credit cards and debt).
At the end of the day, it is a mindset that we need to change - person by person. There cannot be such an enormous divide between one savings culture and another.
But that decision to start building a mindset of saving has to be taken by you. The South African government is not going to introduce an effective savings regime in the near term - therefore you need to take responsibility for it yourself.
As your personal savings column grows - so do the opportunities to take advantage of rebounds in the stock market or the property market or whatever.
You have given yourself the opportunity to participate.
Participating in Japan?
For those South Africans who like the Japan, your options are pretty limited in terms of direct participation. Apart from some regional unit trusts which you could investigate (check out www.equinox.co.za) your only other bet is the Deutsche Bank issued X-Tracker ETF product which we have touched on briefly before.
The share code for this instrument is DBXJP and basically it lets you buy the best performing shares in the Japanese index. It requires no active investment - the same as the local SATRIX40 for example. Chat to Deutsche Bank or an investment professional if you believe this is something you could be interested in.
Normally I take what these guys have to say, with a pinch of salt, but this guy did raise some interesting financial / economic factors that I thought might be interesting to throw into the mix.
First and foremost he seemed to buck the trend of economists / corporate investment strategists who are predicting that the US will bounce back sharply in 2009.
He has tracked a number of 'bubble' financial events like the gold boom, tech bubble etc over the course of history and his model 'seems' to have been able to give some idea of how the markets are likely to perform going forward.
(I say 'seems' because in my experience it is easy to make models and data fit a pattern and say SEE I TOLD YOU SO....)
According to his model we're likely to see a liquidity driven rally hit our markets shortly but we're in all likelihood going to see a flat to negative return from now until 2013 (specifically in first world American and European markets).
In terms of client portfolios though, they are beginning to look to Asia and more specifically Japan as the area where the recovery is likely to come from.
Their thinking is that with the very high natural savings rate of people living in the Asian countries, personal and corporate balance sheets are significantly less geared than their US and European counterparts, i.e. once the dust has settled on this financial crisis, there will be a lot of
liquidity on the sidelines waiting to be injected. Simply put - INVESTORS WILL HAVE THE FREE CASH TO BE ABLE TO PARTICIPATE IN THE ECONOMIC / STOCK MARKET RECOVERY....
and THAT dear reader is the lesson that we as South Africans need to take from recent financial events.
In places like Japan, Taiwan and Singapore (and even Australia to a lesser extent) - people are saving up to 40% of their salary each month. In South Africa, the figure is something ridiculous like 2%.
(And I know at least 2 middle class white families where that figure is a big fat 0% - every cent they earn is being channeled into repaying credit cards and debt).
At the end of the day, it is a mindset that we need to change - person by person. There cannot be such an enormous divide between one savings culture and another.
But that decision to start building a mindset of saving has to be taken by you. The South African government is not going to introduce an effective savings regime in the near term - therefore you need to take responsibility for it yourself.
As your personal savings column grows - so do the opportunities to take advantage of rebounds in the stock market or the property market or whatever.
You have given yourself the opportunity to participate.
Participating in Japan?
For those South Africans who like the Japan, your options are pretty limited in terms of direct participation. Apart from some regional unit trusts which you could investigate (check out www.equinox.co.za) your only other bet is the Deutsche Bank issued X-Tracker ETF product which we have touched on briefly before.
The share code for this instrument is DBXJP and basically it lets you buy the best performing shares in the Japanese index. It requires no active investment - the same as the local SATRIX40 for example. Chat to Deutsche Bank or an investment professional if you believe this is something you could be interested in.
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