Monday, July 19, 2010

STRATEGIC VALUE INVESTMENT GLOBALLY

Strategic VALUE Investment GLOBALLY

By Shan Saeed

Graduated from Uni. Of Chicago, Booth School of Business, Chicago, USA

September 2009—Revised in June - 2010

shan.saeed@hotmail.com

My passion is research and finding great investments no one else is talking about to my clients/investors.

Global Outlook

The global economy has started witnessing the advent of economic recovery giving a hope that things would turn around soon. Major players in the world financial markets through recession would take longer than expected to demise. However, recession would be over officially by the end of Q4-2009 and there would be sluggish growth going forward in 2010.

Most strategic decision and policy makers around the globe are confronting lot of headwinds in the market place as we are slowly coming out of recession. Misperception of recession has created havoc for these decision makers to actually comprehend the magnitude and size of this recession. Recession is not a business cycle but it’s a consumer cycle. When people don’t spend, businesses don’t invest, the economy recedes. It’s simple economics.

Leaders and economic decision makers are meeting for G-20 summit to formulate strategies to redefined and revisit the financial markets to bring about more regulation and control in order to bring discipline in the markets and send positive signals to investors in general. The crisis of confidence level needs to be analyzed soon than later.

Investment—Strategy for Growth

Witnessing the growth and recovery in the economic mode is perhaps the biggest indicator that investor/s are making strategies to meet their economic / strategic goals for the next year. We share some important news to our valued investors and institutional clients. These are the opportunities you’re not likely to hear about from mainstream news and media sources….the ones with the greatest potential for the biggest gains.

This is a huge development. China is also one of the few countries in the world where known gold reserves are increasing…..not shrinking.

China has gone crazy for gold. In April-2009, for example, the government’s Foreign Exchange Agency announced the purchase of an additional 16 MILLION ounces for state coffers. It is reported in a global magazine that for the first time China has surpassed the US as a buyer of gold jewelry. You see, most investors don’t realize that China is now the world’s largest gold producer [they passed South Africa last year]. This went unreported in Wall Street Journal, New York Times and Chicago Tribune. China’s government is providing an enormous boost to its mining industry: It wants to diversify its reserves, replacing some of its US dollars with something tangible—like gold**. Twenty year ago, China produced an inconsequential amount of gold. Today, China is the #1 gold-producing nation in the world…..

Strategic Insights for Investors/ Institutional Clients

So, commodities prices are the key drivers of taking the global economy out of recession into growth mode. Investment in commodities like Gold, silver, oil, sugar, cotton, wheat, platinum, copper, steel and aluminum can provide a strategic advantage to our valued investors not only locally but globally.

In these uncertain economic times, investors need to communicate an effective investment strategy to maintain and sustain a healthy growth in their portfolios to mitigate the risk factor. All investors have these options available for investors/institutional clients globally to diversify their risk, to build portfolio, to formulate more effective investment strategies, to overcome growth barriers, to drive portfolio value and to gain competitive advantage.

Sources

** Comments posted by Shan Saeed on 28th August 2009 on CNN with Todd Benjamin

http://business.blogs.cnn.com/2009/08/16/the-a-b-cs-of-stock-investing-in-china-/

Strategic Analysis of Gold

- It’s the only investment with Buy and Hold Strategy.

- It cannot be devaluated or multiplied out of thin air.

Prices of Gold from 2001 to 2008

Year

Price per Ounce

2001

$257

2005

$512

2006

$632

2007

$833

2008

$869

2009

$1096

2010—$1,200 per ounce by Q3 or Septermber-2010..CROSSED 1200…..It might touch $1300/ounce.Gold has appreciated 33% in the last 12-months

- Chinese government bought 16 million ounce in April-2009.

- Shanghai Gold Exchange has been set up in October-2001.

- Chinese government has spun off a government unit to set Gold companies; early investors can make a killing.

- Chinese have become the biggest gold producer and have surpassed South Africa.

- Chinese are making strategic gold / mining alliance going forward in Africa and South America.

Global Gold Reserves of Different Countries

As of Dec, 31, 2009


Country

Tons

Amount

1

USA

10,000

$387 billion

2

Germany

3,749

$125 billion (69%)

3

IMF

3,539

$118 billion

4

Italy

2,697

$89.92 billion (67%)

5

France

2,869

$89 billion

6

China

1,157

$38.65 billion (1.9%)

7

Switzerland

1,141

$38 billion

8

Japan

841

$28.07 billion

9

Netherlands

673

$22.47 billion

10

Russia

625

$20.85 billion

BUY GOLD…….THE REASON IS……..

Something you haven’t seen in the press much is that, the more fixing the government does, the worst the ultimate result will be. The size of the bailout so far is absolutely unprecedented in all of history. Last November, I did some math and found bailout spending at that time was equal to the inflation-adjusted cost of the Marshall Plan, Louisiana Purchase, Race to the Moon, S&L Crisis, Korean War, New Deal, Iraq Invasion, Vietnam, and NASA—combined. Only World War II rivaled the bailout. And that was back in November-2008.

All that spending originates as borrowing, and there’s no way it’ll ever be repaid. It’ll be inflated away by Federal Reserve’s monopoly on money creation. That will erode the value of the money in your pocket, in your bank account, and, yes, in your stock portfolio, too. That’s why gold is pushing $1,250 per ounce.

BUY GOLD NOW….IT WILL TOUCH $2,000 PER OUNCE IN THE NEXT 48 MONTHS……COUNT DOWN HAS STARTED……ARE YOU READY?

WHO are the major players now

We have analyzed about Gold movement in the past 10-years. We foresee Gold could reach $1,200 a troy ounce over the next 12 months. We would recommend that investors stay overweight in Gold, Gold ETF and Gold equities.

At this point of time, the most important driver of the gold price is the ZERO real Fed Funds rate in the USA. The rates will continue to remain zero for the next 12-months till Q-1, 2011. Inflation adjusted rate stays below 2%, then gold price will rise further to $1,500 per ounce in 2-years period.

Gold is an under-strength asset with just 0.9% of global Assets Under Management held as gold or Exchange Traded Funds or gold equities in private banks, institutions and private investors globally while the inflation adjusted gold price is still 41% below its previous high touching in March-2008.

Chin and Japan together control 42% of global foreign exchange reserves but hold only 1.97% of their reserves as gold as per the latest information. The Bank of Japan and Bank of China want to hold 10% of their reserves in gold (compared with 70% in Europe and 80% in the US). They need to purchase around $250 billion worth of gold, more than double the world’s annual gold production to catch up with Europe and US figures going forward. Don’t write off Russia as well. They are in the main race of the Gold run.

BIG NEWS

Did you know the President confiscated all the gold of American citizens in 1933??

Its true……all in one quick swoop of the pen: DECREE ISSUED

UNDER THE EXECUTIVE ORDER OF THE PRESIDENT

Issued April 5, 1933

All persons are required to deliver

ON OR BEFORE MAY 1, 1933

All GOLD COIN, GOLD BULLION, AND GOLD CERTIFICATES

now owned by them to a Federal Reserve Bank, branch, or agency, or

to any member bank of the Federal Reserve System.

REMEMBER:

It was at the height of the Great Depression. And the US government desperately needed to shore up its financial position. So in a dramatic move, it took everyone’s gold. We have to reach down to the bottom to make sure that you understand the import of GOLD’s HISTORY. GOLD IS REAL CURRENCY AND IMPORTANT ASSET CLASS INVESTMENT. GOLD IS HEDGE AGAINST CHAOS AND UNPREDICATABLE BEHAVIOUR OF THE GOVERNMENTS.

Strategic Insight About Oil

Average Prices of Oil from 2001 to 2009

Year

Average Prices per Barrel

2001

$23

2002

$22

2003

$27

2004

$37

2005

$50

2006

$58

2007

$64

2008

$91

2009

$62

- Prices are determined by market forces.

- Speculation contributes just 17-20% to the prices level.

- Official recession will be over this year.

- There will be sluggish growth in 2010.

- Recession is not a business cycle but a consumer cycle. When people don’t consume, businesses don’t invest, the economy shrinks causing deflation……

- Major players will get impediments as oil exploration is diminishing. Most of the oil facilities are not properly secured.

- Supplies disruptions from Iraq/Nigeria or Venezuela cannot be ruled out.

- George Soros has placed huge investment in Oil. He is LONG on Oil.

- Commodity prices surge will get the global economy out of recession.

- Jim Rogers and George Soros are making strategic investments in commodities. [This is big news information, few people know about it].

- Investment in Silver, Cotton and Grains are getting attention from major player globally.

- During great Depression of 1993, stimulus package did not take the economy out of depression. In fact, it was WWII that took the global economy in the growth mode………

OIL PRICES ARE HEADING TOWARDS THE SKY

Oil is now flirting with $80 per barrel. In January, while many other analysts were predicting $40 to $60 oil. I predicted that oil would soon be back at $87 by December 2009 OR maybe $93 per barrel. OIL PRICES WILL FLIRT AROUND $91/ BARRELL BY DEC-10

My strategic analysis of precious metals prices for last 9 years

Year

Silver Average Prices

Platinum

Palladium

2001

$4.37

$529

$603

2002

$4.59

$539

$337

2003

$4.87

$691

$200

2004

$6.67

$845

$229

2005

$7.31

$896

$201

2006

$11.54

$1,142

$320

2007

$13.38

$1,303

$354

2008

$14.98

$1,573

$351

2009

$14.29

$1,176

$251

2010 on 17,June

$18.77*

$1,572

$481

* Silver prices have doubled in the last 20 months…From $9.17 /ounce in N ovember-2008 to June-2010 to 18.78 /ounce.

Commodities can save you from uncertainty in prices globally and it’s an insurance of your wealth.

1 comment:

  1. Remarkable research
    Brilliant effort


    M.Saadan Sarwar
    Pak-Kiet...

    ReplyDelete