Investment Gems

China is still one of the fastest growing economies in the world. Even the weakness provoked crackdown on debt should be a long-term positive. E-commerce is still one of the most disruptive sectors in world’s economy, and Alibaba is a giant in this space. The current market rout has brought…

Summary The quantitative tightening and interest rate hikes have had a negative effect on the world economy, except in the US. A further hike would end up putting even more pressure on EM economies. Sooner or later, that will spill over to the US. Financial turbulence is also suggesting that…

Maybe a more suitable title could have been: “Does trend-following being profitable makes sense?” Many traders don’t care about the reasons why they achieve profitable strategies out of trend-following techniques. They don’t want to know. For them, it suffices to keep making money out of them. For me that doesn’t work,…

Photo Credit: PAS China President Trump has been promoting a trade war with China. His defenders argue it is time to rebalance what has been a win-lose trade relationship. Although there are positives in getting cheap goods from China that the trade balance can’t capture, it is true that China’s…

(Photo credit: Sankarshan) First of all, we have to get the context for this transaction. IBM (IBM) proposed taking over Red Hat (RHT) in a $30 billion deal. There are some specifics that must be covered. One of the most important is the fact that this is a friendly deal, i.e.,…

(photo credit: Aaron T. Goodman) Nader Naeimi, the guy who correctly called the emerging market selloff back in October, is now being quoted by Bloomberg as being bullish on Chinese shares. That doesn’t surprise me. First, the market rout happened very fast and the performance went down by a lot. For…

Summary Two decades ago, no one would say that open-source would survive private code competition. However, open-source not only survived, as it also thrived. Red Hat’s business model, based on subscriptions and services, has delivered good margins.   (Photo credit: Sankarshan) Open source evolved, developing an entrenched market position For years…

Summary Debt has no place in traditional academic macroeconomic models. Successful traders and speculators, however, have always relied on debt cycles to predict crashes. After the Great Recession and following Minsky heritage, academics started to pay more attention to debt cycles. They use High Yield corporate credit as reference. In…

Summary QE money returning home is mainly responsible for the fragile economies’ massacre. The trade war seems to be the catalyst for the disorderly return, and the movement seems blind to fundamentals. China should be resilient through the increased focus on its internal market. If a hard-landing fails to materialize,…