Strategic Value Investment Advisory Services
By Shan Saeed
MBA 2009 Uni. of Chicago, Booth School of Business, USA
GLOBAL ECONOMIC OUTLOOK
The global economy is passing through the worst of all depression of the modern times since 1930’s. As we navigate through turbulent times, the financial market would remain volatile and uncertain for the next 2- years. You bet. The US is bankrupt. because he had reached the total of a thousand of gold per day to wage war, which caused an army to be maintained by contributions from your people, from China’s lending to the trade deficit, in order not to be afflicted by heavy exactions, and let prices not to go up. Deflation is a more dangerous than inflation. US is trying to fight for its survival. Its facing twin deficit. Negative effective interest rates [interest rate – inflation] and huge budget deficit. Confidence level is abysmally low and private sector credit is down in the American economy. Bush tax cut plan if not extended will place the economy in doldrums. Deleveraging in US consumer\s will put a drag on the economic for the next 6 years as it requires $ 5 trillion to reduce household debts.
FED should, stop printing money, and rise interest rates, let the US suffer from pains, FED should have to consider not only present difficulties but also future, like hectic fever, that in its beginning it is easy to cure, like Japan, he suffered from decades sluggish economic growth and still slogging away, but he had developed a fundamentally different economic system, a new and superior form of capitalism.
Japanese economic style was the insulation of major companies from short-term financial pressures. Even housing bubble as a burst event, in the coming future, Japan has the ability to build machine bubble, robot bubble... The printing presses have little effect in this situation as the total liabilities in dollars (public and private debt, explicit and implicit guarantees, and other credit instruments such as derivatives) vastly exceed available currency with which to service them. Unfunded liabilities amount t $51 trillion. Print and all your debt service costs rise [ $ 1.52 trillion printed since Aug 2007], don't print and the amount and velocity of money slows further and faster. Either one leads to deflationary pressure as demand evaporates. This is the conundrum that the Fed finds itself in. 'Helicopter' Ben must be starting to realize that his last ditch solution won't work; pushing on strings never does.
Debt that cannot be serviced leads at one point to the reneging on that promise to pay. Any reserves in the system are rapidly consumed due to excessive leverage and the failure of the issuers results. The US Gov (or any other institution) does not have the financial nor political capacity to make everyone whole, leading to a structural collapse. FED will continue to follow the Quantitative Easing strategy for the next 2 years with zero interest rates till 2011.
ASIA AND EMERGING ECONOMIES
These economies would be the main driver of the global economies. Asia would be leading the way. There's a transition now from the US to Asia in the financial world and the economic world. The largest creditor nations in the world are now in Asia: China, Korea, Indonesia, Vietnam, Malaysia, Hong Kong, Japan, Singapore, you know who the largest debtor nations in the world are. Emerging economies would be second inline including Chile, Poland, India, Venezuela and Brazil. US economy would be third in rating…Europe’s economy would be one-third of the global economy. This is a huge paradigm shift in the financial and global landscape of the world.
INVESTMENT STRATEGY FOR SAVVY INVESTORS.
Investors are looking for areas in order to growth and protect their wealth as we move through treacherous times in the global financial markets. We strongly believe that sound and value investment advisory with constant engagement strategy can provide a much needed strategic competitive advantage to our clients to secure their wealth and to meet their financial requirements profitably.
The big question for all investors is how to sustain profitability and growth their wealth in these arduous times? We have all the answers for our valued investors to guide them strategically to help them in meeting success in the financial markets. Remember, all markets are not risk-free. Our valued investors have to decide the choice of investment as per their risk appetite and investment time-frame with definite exit strategy in place. We list few areas of growth and continuous sustain profitability.
1. Commodities Market
This market provides solid risk-return to the investors who have long term perspectives with growth corridors. Investors can buy Gold, Silver, Copper and Oil…We call it COGS…The return on investment on these commodities ranges from 20 to 30% annually. Why Gold and Silver have appreciated for the last 10 years. Reasons
- Dollar has got bearish outlook as FED continues to print money and create another asset bubble for the economy…
- Negative interest rates.
- Central Bank buying Gold and Silver since these are REAL ASSETS
- Major players like China, Russia and Japan are buying like crazy…Gold and Silver
- Gold and Silver are hedge against uncertain, risky, turbulent times and unpredictable behavior of the governments.
- Sovereign Debt risk is very high. This makes strategic value investment in Gold and Silver more attractive and rational....
As population is growing, supply-demand is a changing dynamics and weather patterns are giving policy makers a new dimension to analyze the growing importance of agriculture commodities. Global Food shortage will become a reality very soon. Please get your food security and investment in place before you are out-smarted and out-executed by your peers and competitors. We strongly recommend our valued investors to take positions in WHEAT, COTTON, RICE, COFFEE, SUGAR AND CORN…
Chinese are buying all from the market….Will they leave something you? This is a big question…Be proactive and outsmart others…..
2. Currency Market
If you trace history, Pound Sterling was the major reserve currency 70 years back. Fiscal and structural mismatch and financial imbalance led to its downfall providing Dollar to take the lead.. Dollar is facing Hugh trade imbalance, budget deficit and abysmally low confidence level among investors. Chinese have started buying Japanese bonds and have clearly indicted to the US government Confidence in US is waning…..So what’s the best currency to invest at this point…
a) We recommend Canadian and Australian dollar since there are commodities currencies with strong and sustainable growth of commodities going forward.
b) Defensive currencies will continue to flourish including Japanese Yen and Swiss franc because of historical smooth and stable economies
c) Underdog currency includes Chinese Yuan, Swedish Krone and Indonesian Rupiah
3. Technology / Telecom Market
Innovation is happening at lightening pace. Firms are continuous to outsmart and out execute their rivals. We suggest the following companies to invest
d) Research in Motion
h) Dell / HP
4. EQUITY MARKET----Lifelong Value Company’s
These companies would continue to grow since utility and value of these firms services will add to the consumer’s living standards. These companies will remain sustainable in profitability.
a) Johnson and Johnson
i) Wrigley Chewing Gum
Energy markets with strong focus on Natural Gas, Oil, Renewable Energy and Green Technology will make you profitable going forward.
5. REAL ESTATE MARKETS
This is again a huge area of growth for our valued investors who want to place their investment in real estate markets of US, Asia Pacific, South America and Europe can take strategic position for long term.
USA:- California, Florida and Chicago provide a good opportunity
Europe:- Spain and UK provide an opportunity
South America:- Brazil, Chile, Argentina
Asia Pacific: Vietnam, Singapore, China, Korea, Thailand, Malaysia and Indonesia
Disclaimer: This research should not be treated as investment advice or recommendation of any form..Please use your own judgment, business intelligence on research report and discount rate before making any short or long term investment decisions..