Author Archives: Ket Garden

by | February 28, 2014 · 2:02 pm

EL Cars

It seems like Tesla (TSLA) is on the way to change one of America`s most beloved industries – Automotive. This is not only good for Tesla themselves, but SolarCity (SCTY) will profit from it too. You probably know Tesla`s Superchargers.

tesla

Not everyone knows that Tesla`s superchargers is powered by a combination of electric grid, solar, and batteries. The batteries are being used to store excess solar energy and offset the costs of buying energy from the grid.

 

SolarCity is working on a new project called DemandLogic battery storage systems. They have tested the battery systems (provided by Tesla) in some people`s homes to complement their solar panels.

 

The intention is to bypass peak rate charges and store or sell any excess energy, ultimately providing a lower energy bill. Just like the superchargers. You can just imagine how it will be in the future as the technology matures.

solarcity-lg

A joint venture by Elon Musk and SolarCity could be a great company to make a better world! SolarCity is up 51,6% in 2014, while Tesla is up 67,9% in 2014. Tesla is up 625,1% (1 YR). SolarCity is up 375,6% (! YR). Great!

 

Reports today:

 

08:30 AM ET GDP
09:45 AM ET Chicago PMI
09:55 AM ET Consumer Sentiment
10:00 AM ET Pending Home Sales Index

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | February 27, 2014 · 2:15 pm

Smartphone prices are dropping

This week is a Smartphone week with the Mobile World Congress in Barcelona. This congress is the industry`s biggest annual trade fair. Everybody at the congress is talking about the smartphones. So, what`s up in this business industry?

Apple

The problem with all the smartphones is like the car industry. Their all look the same, which means it is hard to differentiate themselves from the competitors. The strongest brands in this industry is no doubt Apple and Samsung.

 

It is predicted that the growth in global smart phone shipments will fall sharply in 2014 and keep falling for the next four years. The average price will drop sharply as the demand shifts to China and other developing countries.

 

More low-cost devices are coming out to the market to retail at near $100 or cheaper than that. Those devices has a lack of some of the features of the top models, which is more expensive. It is the low-cost Chinese players with enough technical and design expertise that is now coming to the market and draw down the prices.

 

We are talking about brands like Huawei (the world`s third biggest phone maker), Lenovo, TCL Communications and more unknown brands like Oppo, CorePad and Gionee that is poised to be big known brands in the coming years. All of them coming from the world`s largest phone market.

 

China`s ZTE Corp are searching for tech solutions to reach the $50 price target, but the strong demand is pushing up the cost of the components which is a surprising twist in an industry more familiar with falling material prize as technology evolves.

 

Components like screen display, keyboards and memory are key hardware components wich is important to differentiate them all from the other smartphones. Alcatel`s Onetouch brand owned by TCL launched a new sub-$100 smartphone this week.

 

I don`t think you can expect to see Apple and Samsung selling their smartphones for $100 or lower the coming year. Nope. Forget it.

 

Reports today:

 

  08:30 AM ET Core Durable Goods Orders (MoM)
  10:00 AM ET Fed Chair Yellen testifies

 

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | February 26, 2014 · 1:53 pm

Gold price forecasts

Gold seems to have started a new bull market and the gold price is near a four-month high. Silver is at its highest since October 2013. A report from Street Research say that Chinese monetary authorities may be planning to convert the yuan into a gold-backed international currency. Primarily to deliver the dollar its comeuppance.

 

Data from CFTC shows that large players like hedge funds and other portfolio managers boosted their long exposures by 31% as on February 18. Gold prices should rebound because of the shift in the market from QE to tapering and global investor perception regarding currency values.

 

Technical selling, dollar`s strength, the sustained rise in equity and the Fed`s taper is the primary factors that caused the most recent fall in gold. The chart below is a study of the gold triggers since 1970:

Goldprice 1970 - 2014

The correlations between the gold price and the country’s balance sheet have turned negative lately. Combined assets of the U.S Federal Reserve, the European Central Bank (ECB) and BOJ could reach somewhere between $8 – 9 trillion in 2014. The analysts warn it can stay there for a while.

 

Liquidity and currency perception can drive the gold price movements rather than traditional supply – demand analytics. Chinese demand and the likelihood that Indian restrictions on gold imports could be lifted are macro factors that can be positive on gold prices.

 

The analysts expect that Central Banks would be strong buyers of gold in the future too. The analysts observe a 98% correlation between the US public debt and gold prices. With federal debt projected to rise to World-War-II levels by 2038, gold prices could be headed much higher.

 

Mining companies have adjusted their business models to the new low price environment and it is expected that the mining companies will sustain the performance and profit from it in the future. Commodity experts say India is playing a key role in the gold price.

 

The forecasts for gold are an average about $1300 per oz in 2014 estimates Sterne Agee. Silver is forecast at $23 per oz. The gold can vary from high $1,450 and a low of $1,100, while silver can reach $25 per oz.

Reports today:

10:00 AM ET New home sales

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

 

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by | February 25, 2014 · 1:30 pm

Online traffic

Some people do not understand how WhatsApp can be worth $19 billion, but CEO Mark Zuckerberg say it is worth more than that. How is that possible? What do Mr Zuckerberg see that others don`t see?

Facebook whatsapp

The revenue in WhatsApp is $20 million (2013), which means Facebook has paid 950 times the revenue. This means that Facebook is paying $42 per WhatsApp user. The Facebook value per user is $170. Facebook’s revenue per user (ARPU) is $6,73, while WhatsApp generates $1 per user annually after one year free subscription.

 

This deal gives WhatsApp the same valuations as Gap Inc, and half of the value of Twitter Inc. Half-a-billion people are using WhatsApp for messaging and, and the engagement of the app is huge on mobile by far.

 

It seems like Facebook’s goal is to collect as much people as they can on a few mobile and tablet apps. As long as they have billions of people engaged in their apps, they will be attractive to marketers which is paying their wages.

 

WhatsApp have low revenues today, but Mr Zuckerberg say it would be worth more in the future. This is a strategic value. He saw a huge business potential to double its users and its fit with Facebook. In addition; Mr Zuckerberg are seeking more phone companies as partners to connect the people.

 

It sounds like Nokia`s vision: «connecting people». Nokia was the worlds nr.1 mobile company. As you already know, the wind changed, and you know the history of Steve Job`s fantastic company Apple. The world`s biggest company!

 

It`s difficult for some people to see why they should use WhatsApp. There are so many alternatives out there, and they have been there for many years. I personally do not use WhatsApp. I don`t know other people who use it either.

 

I spend many hours on skype every week. Everyone I know from China use skype and its free. WhatsApp is free only the first year, and then it cost $99 cent. Why should people around the world use WhatsApp and pay for it when others like Skype is for free?

 

The trend now is that the mobile operators don`t sell SMS or phone calls anymore. Its free! How do they earn money? They sell online traffic. That`s the new product. Come on Facebook. Come on Mark Zuckerberg; this is not innovation! But if everyone use WhatsApp in the future; I have no choice.

 

Reports today:

 

09:00 AM ET S&P Case Shiller HPI
10:00 AM ET Consumer Confidence

 

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by | February 24, 2014 · 1:42 pm

Expensive oil shale revolution

Asian shares fell today and the Japanese yen rose as the growth in Chinese home prices eased for the first time in 14 months. Tokyo`s Nikkei index fell 0,2%. Tokyo stocks are also down, while the activity in its major export is declining.

 

European stocks and the Euro got a boost on Monday as the German carmaker Volkswagen came with a disappointed outlook with limited gains. Right after Viktor Yanukovich was ousted rom the presidency in Ukraine, the country`s dollar bonds skyrocketed, and the hryvnia currency fell.

 

On the commodities front, Brent crude is down -0,15% to $109,68. Gold is up for a third week in a row, to $1,334,10, up +0,79%. Silver is up 0,76%, to $21,98 and Copper is down together with the markets, to 322,00, down -1,23%.

 

Chesapeake Energy (CHK)

Chesapeake Energy (CHK) is pursuing strategic alternatives for its oilfield services division. The Oilfiesld Services generataed revenue of $2,2B last year. The investor Carl Icahn own 10% of the shares in Chesapeake Energy. Rumors say he is seeking a cash bid of up to $40 a share.

 

Rising natural gas prices could help the company to profit off a plan to revive the maligned Haynesville shale play, where it gambled billions of dollars six years ago. The rigs they have could boost daily rates for the U.S land drilling company.

 

Chesapeakes Energy`s plan would increase the number of Haynesville rigs 25% – 50 by the end of this year. Renewed gas drilling could drive up margins for U.S rig contractors. CHK have spent a lot of money in oil shale drilling, so higher demand will help then in the future.

 

It will be interesting to see who buyer will be in CHK. Is it gonna be Icahn, Exxon Mobil or ConocoPhillips? All of them are potential buyers while European majors disqualify themselves. Carl Icahn sold half of his stake in Netflix last year. He have success with investments in Herbalife (HLF) and Apple (AAPL) too.

 

Selling half of his shares in Netflix gave him a profit of $800 million. Carl Icahn started in 1980`s as an activist investor and there has never been a better time for activist investing than today. Activist involvement is necessary to ensure the competitiveness of corporate America. Chesapeake Energy is more of a restructuring play right now. CHK will probably continue to sell itself piece by piece.

Reports today:

10:00 AM ET CB Consumer Confidence

 

CHK

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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