Longtime readers know I’ve been bearish on China for a while now. Last summer, I warned that China’s currency was poised for a sharp devaluation. In February, I warned that the economic situation in that country was much, much worse than we were being led to believe. #-ad_banner-#In each instance, I offered up a simple way to profit from the turmoil, thanks to the power of options. This time around, I’ve got my eye on a specific company in China — one of its largest and most well-known, in fact. I’ve… Read More

Longtime readers know I’ve been bearish on China for a while now. Last summer, I warned that China’s currency was poised for a sharp devaluation. In February, I warned that the economic situation in that country was much, much worse than we were being led to believe. #-ad_banner-#In each instance, I offered up a simple way to profit from the turmoil, thanks to the power of options. This time around, I’ve got my eye on a specific company in China — one of its largest and most well-known, in fact. I’ve made money betting against it before, and now it’s time to do it again… For those who are unfamiliar with the situation in China, let me briefly explain. Key economic data issued by the government is unreliable at best. The government is desperately trying to create a consumer-driven economy, while simultaneously propping up its real estate sector, stock market and imports. You can read what I’ve written before about this situation (as well as in other media outlets), so I won’t get into the details in today’s essay. But suffice it… Read More

Few countries trade with so much volatility in investor sentiment as China. Investors are manic about watching economic reports from the world’s second largest economy, and the slightest change in statistics can mean a plunge in sentiment.  Shares trading on the Shanghai Stock Exchange are up 74% over the last ten years, but the long-term note masks some spectacular ups and downs over shorter periods. The index lost 28% of its value over the last nine months of 2011. And who can forget the meteoric boom over the year to June 2015 when the market surged 140%? #-ad_banner-#Investors have once… Read More

Few countries trade with so much volatility in investor sentiment as China. Investors are manic about watching economic reports from the world’s second largest economy, and the slightest change in statistics can mean a plunge in sentiment.  Shares trading on the Shanghai Stock Exchange are up 74% over the last ten years, but the long-term note masks some spectacular ups and downs over shorter periods. The index lost 28% of its value over the last nine months of 2011. And who can forget the meteoric boom over the year to June 2015 when the market surged 140%? #-ad_banner-#Investors have once again abandoned shares of Chinese companies despite strong economic fundamentals and valuation. I’ve already put together two trades on the theme for a gain of 54% and 45% in less than three months’ time. Now I’m going for the long-term trade on China for even stronger gains as fundamentals come back to drive shares higher.  Recent Economic Reports Have Investors Fleeing The release of three economic reports late May renewed fears of a hard landing for the Chinese economy. The official May manufacturing PMI was unchanged from April at 50.1 to mark the third month just barely above the… Read More

“Buy American” isn’t only an admonition in support of U.S. manufacturers. In recent years, it’s also been the best advice for stock investors. U.S. stocks have radically outperformed shares of non-U.S. companies, driven by the superior performance of the U.S. economy relative to Europe, as well as our diversification relative to energy-heavy markets such as Canada’s and Russia’s. Even the once-soaring BRIC markets have suffered of late, as the rate of economic growth in China, India and Brazil has slowed considerably, with storm clouds on the horizon. #-ad_banner-#The numbers tell the story: for the three years ended April 30, the… Read More

“Buy American” isn’t only an admonition in support of U.S. manufacturers. In recent years, it’s also been the best advice for stock investors. U.S. stocks have radically outperformed shares of non-U.S. companies, driven by the superior performance of the U.S. economy relative to Europe, as well as our diversification relative to energy-heavy markets such as Canada’s and Russia’s. Even the once-soaring BRIC markets have suffered of late, as the rate of economic growth in China, India and Brazil has slowed considerably, with storm clouds on the horizon. #-ad_banner-#The numbers tell the story: for the three years ended April 30, the S&P 500 generated a total return of 39%, vs. 3.7% for the MSCI EAFE Index (EFA) of international stocks. That outperformance has dampened American investors’ enthusiasm for foreign stocks. The U.S. dollar’s strong rally during that period only reinforced the bias.  But in recent weeks the dollar has dipped, signaling that the euro and other currencies are staging a cyclical comeback. And in a larger sense, ignoring the rest of the world means writing off dozens of excellent companies — some of which do significant business in the United States. So let’s take a look at two such stocks that represent… Read More

Westpac Banking Corporation (NSYE: WBK), Australia’s second largest bank, missed earnings on May 1, when it reported the biggest loan impairment charges in six years for the six months ending March 31. Profits clocked in at A$3.9 billion, lower than the expected A$4.025 billion. #-ad_banner-#This miss sent shares into the weeds, as low as $22.71 on Monday, down from $23.59 at Friday’s close. At the heart of the miss were corporate debt loans and lower commodity prices. This isn’t good news for Australia’s banking industry, and Westpac is the first big bank to report in the country, with other major… Read More

Westpac Banking Corporation (NSYE: WBK), Australia’s second largest bank, missed earnings on May 1, when it reported the biggest loan impairment charges in six years for the six months ending March 31. Profits clocked in at A$3.9 billion, lower than the expected A$4.025 billion. #-ad_banner-#This miss sent shares into the weeds, as low as $22.71 on Monday, down from $23.59 at Friday’s close. At the heart of the miss were corporate debt loans and lower commodity prices. This isn’t good news for Australia’s banking industry, and Westpac is the first big bank to report in the country, with other major institutions reporting later this week into next. And they’re all in the same boat. Many of these Australian banks made loans to the coal and steel industry. Both of these industries are struggling massively right now. The world is moving away from coal as a power source faster than ever before, and China’s slowing growth is slashing demand for iron ore and steel. These factors could mean Australian banking debt could climb to its highest level in eight years by 2018, according to Bloomberg: [Commonwealth Bank of Australia (OTC: CBAUF), Westpac Banking Corp., National Australia Bank Ltd. (OTC: NABZY)  and… Read More

According to Bloomberg, “Traders added more than $1 billion to U.S.-traded emerging-market stocks and bond ETFs this month through April 15.” That puts inflows for the year at $4.5 billion… and it’s a major shift in the markets. Analysts are saying we’ve passed the low point, and that the rally could continue. But what’s behind this push higher? #-ad_banner-#The answer is two-fold. First, news out of China is showing some economic stabilization. The country’s GDP growth rate clocked in at 6.7% for the first three month of 2016, and could remain at that level through 2020. Some folks say… Read More

According to Bloomberg, “Traders added more than $1 billion to U.S.-traded emerging-market stocks and bond ETFs this month through April 15.” That puts inflows for the year at $4.5 billion… and it’s a major shift in the markets. Analysts are saying we’ve passed the low point, and that the rally could continue. But what’s behind this push higher? #-ad_banner-#The answer is two-fold. First, news out of China is showing some economic stabilization. The country’s GDP growth rate clocked in at 6.7% for the first three month of 2016, and could remain at that level through 2020. Some folks say this is bad news, as it’s a far cry from the screaming double-digit growth of the last decade. But I say it’s good news, as stable GDP growth in an economy transitioning from developing to advanced is almost unheard of. Many economies in this transition stop growing altogether, or even experience some contraction. Stable growth from an economy that makes up more than 37% of global GDP? I’ll take that. And apparently, so will emerging market investors. The second factor is a stable and recovering U.S. economy. After China, the United States is the world’s second biggest economy, and… Read More

It is exceedingly valuable to keep an eye on what’s going on abroad. Most of the world’s business transactions take place, after all, without the U.S. on either side of the trade. Our economy, at some $17.3 trillion annually, is less than a quarter of the earth’s total output. Or, to put it another way, 78% of the world’s business is none of ours. So when the United States economy takes a breather from reality, as it seems to be these days, it’s a wise bet to look for opportunities abroad. #-ad_banner-# This hasn’t always… Read More

It is exceedingly valuable to keep an eye on what’s going on abroad. Most of the world’s business transactions take place, after all, without the U.S. on either side of the trade. Our economy, at some $17.3 trillion annually, is less than a quarter of the earth’s total output. Or, to put it another way, 78% of the world’s business is none of ours. So when the United States economy takes a breather from reality, as it seems to be these days, it’s a wise bet to look for opportunities abroad. #-ad_banner-# This hasn’t always been so easy. But today, with new financial products and ever more participation in equity markets, you can allocate part of your portfolio to places you’d need Google Maps to find just as easily as you can order an Uber, get movie tickets or buy shares in Johnson & Johnson (NYSE: JNJ). Some sophisticated investors, through services like Interactive Brokers, can directly participate in major foreign markets. But even that’s not needed anymore. Your regular brokerage account can provide all the international access you need. A quick look at the data shows fairly anemic… Read More

Global investors are drooling with anticipation of a tie-up between the London Stock Exchange Group, (LSE: L) and Deutsche Bourse (DB1.DE). This merger of equals would create the largest exchange group in the world, and talks of the merger sent prices for both companies through the roof. On the news,… Read More

I’ve said it at least a hundred times, and I’ll say it at least a hundred more… the vast majority of the world’s best high-yield stocks are NOT based in the United States… Don’t believe me? #-ad_banner-#My staff and I recently ran the numbers… When we looked only at the companies that turned a profit over the past year, we found just 119 U.S. common stocks paying yields of more than 12%. But 204 additional stocks are out there yielding 12% or more… all coming from international-based companies. That means many… Read More

I’ve said it at least a hundred times, and I’ll say it at least a hundred more… the vast majority of the world’s best high-yield stocks are NOT based in the United States… Don’t believe me? #-ad_banner-#My staff and I recently ran the numbers… When we looked only at the companies that turned a profit over the past year, we found just 119 U.S. common stocks paying yields of more than 12%. But 204 additional stocks are out there yielding 12% or more… all coming from international-based companies. That means many income investors who focus exclusively on the U.S. are essentially missing out on twice as many high-yielders before they even get started. Today, I want to tell you about one of my absolute favorite countries for finding high yielders. And I bet most investors haven’t even considered looking here… It’s a country that rarely gets any mention by the mainstream financial media. Sure, you hear about India, China, Russia, and Brazil. And for good reason — those countries have grown at incredible rates over the years, which have made many investors… Read More

Let’s be honest. When you hear about a stock that yields 12% or more, your first thought should be that the company is probably a basket case. If it’s offering a yield that sounds too good to be true, it probably is. And you’d be right most of the time. Usually, yields are this high because a company’s share price is falling — signaling underlying problems in its business. A lower share price leads to a higher dividend yield. That means profitable companies paying yields this high should be rare. #-ad_banner-#My staff and I… Read More

Let’s be honest. When you hear about a stock that yields 12% or more, your first thought should be that the company is probably a basket case. If it’s offering a yield that sounds too good to be true, it probably is. And you’d be right most of the time. Usually, yields are this high because a company’s share price is falling — signaling underlying problems in its business. A lower share price leads to a higher dividend yield. That means profitable companies paying yields this high should be rare. #-ad_banner-#My staff and I recently ran the numbers… When we looked only at the companies that turned a profit over the past year, we found just 119 U.S. common stocks paying yields of more than 12%. But did you know there are actually 204 other stocks that yield 12% or more? The difference is that many investors just don’t know where to find them. That’s because the majority of the world’s highest yields aren’t being paid by U.S. companies. My recent search found 204 additional stocks out there yielding 12% or more… all coming from international-based companies. Read More

For decades now, investors and companies have been trying to position for an emergent China. Foreign direct investment has grown to $289 trillion in 2014 from just $38 trillion in 2000. The Shanghai Composite index surged an annualized 21% a year over the seven years to mid-2007 as investors poured into the trade.  #-ad_banner-#However, the China trade hasn’t paid as well since the end of the Great Recession. Economic growth has slowed to just under 7% and the Shanghai index has returned just 1.6% annually over the six years to 2016. To make matters worse, the Chinese Yuan has depreciated… Read More

For decades now, investors and companies have been trying to position for an emergent China. Foreign direct investment has grown to $289 trillion in 2014 from just $38 trillion in 2000. The Shanghai Composite index surged an annualized 21% a year over the seven years to mid-2007 as investors poured into the trade.  #-ad_banner-#However, the China trade hasn’t paid as well since the end of the Great Recession. Economic growth has slowed to just under 7% and the Shanghai index has returned just 1.6% annually over the six years to 2016. To make matters worse, the Chinese Yuan has depreciated 6.8% against the U.S. dollar since 2014, meaning lower returns when translated to the greenback. The Chinese government has yet to be successful in its move to transition from manufacturing to a consumer-driven economy and weak growth abroad means export growth will remain sluggish.  Against this outlook, there is still one China play that’s working. Best yet, this group of stocks should do well whether that economy picks back up or not. Pollution In China Is At Dangerous Levels Beijing issued its highest smog alert of the year in early December, raising the warning level and reporting PM2.5 levels… Read More