by | September 29, 2014 · 2:16 pm

Gold is at a critical level

The dollar hit a four-year peak compared to major currencies today, and while the dollar is moving higher, the gold is declining. The dollar is moving higher as everyone have all their eyes on the expectations of interest rate in the U.S right now.

Gold

Strong economic data could prompt the U.S central bank to raise interest rates faster and sooner than expected, and that could boost the dollar. The pressure on gold from a stronger dollar was mitigated by a fall in equity markets after Honk Kong riot police advanced on pro-democracy protesters in the worst unrest since China took over the former British colony two decades ago. Gold is traditionally seen as an alternative investment during times of political instability.

Gold is still in a bearish territory. At the end of last year, the precious metal started to move higher. We saw higher highs and people were bullish. It was a positive sign, but it was a positive sign in a negative trend.

The precious metal is still declining and it is just a matter of time before we see a test of the critical support at $1,185. Gold moved higher when the U.S forces began bombing raids in Syria, but gold is down together with Silver, which is below $18 right now.

We can see the same trend in Platinum, which moved sharply lower, down almost $40, and palladium down almost $30, so Gold continues to get more expensive relative to its precious cousins.

A portfolio should contain about 10% of precious metals, because as we have seen over the past decades, gold can cushion an investment portfolio during times of crises. Right now we are at a very interesting and perhaps critical juncture with respect to the direction of the gold price as it approaches a key support level.

It can move up and it can move down, and I`m following some key support and resistance levels for the precious metals. The gold price can move down to $1000 and below. It all depends on happenings around the world.

The signals out there is mixed which makes the bulls and bears very frustrated. That`s why it is important to trade what you see, not what you think. I`m exited about the coming weeks and moths.

Leave a comment

Filed under Commodities

Tagged as ,

by | September 26, 2014 · 1:00 pm

Ello is Anti-Facebook

There has been a lot of buzz about the anti-Facebook stance from the new start-up Ello. The new site does not accept advertising and have no data mining. At the moment, you can`t participate, unless you have an invitation to join the community.

Ello

(Picture: Ello logo)

Those Ello people do not like Facebook`s business model. They obviously don`t like to be a part of facebook as they feel they are the product, while the network is owned by advertisers. And this is exactly how they do it on Facebook.

They track every post you share with your friends, every friend you make on Facebook and the links you follow. All this is recorded while advertisers can buy the data and show you more ads. Ello obviously don`t like this, and belive they have a better business model.

The founder Paul Budnitz, which is also the founder of the cool bikes called Budnitz Bicycles, launched the site Ello earlier this year and say he has seen thousands of sign-ups an hour to Ello the last week, and it seems like this site is now taking off.

Ello is made by designers and they have a manifesto, which is;

Your social network is owned by advertisers.

Every post you share, every friend you make, and every link you follow is tracked, recorded, and converted into data. Advertisers buy your data so they can show you more ads. You are the product that’s bought and sold.

We believe there is a better way. We believe in audacity. We believe in beauty, simplicity, and transparency. We believe that the people who make things and the people who use them should be in partnership.

We believe a social network can be a tool for empowerment. Not a tool to deceive, coerce, and manipulate — but a place to connect, create, and celebrate life.

You are not a product.

How will Ello survive without advertising? Are people willing to pay for a subscription? It can be a site for artists and musicians as they have the problem with Facebook`s policy to use their pseudonyms as part of their profession.

But I don`t think that billions of people will run from site to site as a new one is launched. Ello will probably end up as a niche community for musicians and drag artists, among others, who want to use pseudonyms to protect themselves. Your friends on Facebook will still be on Facebook I think.

It`s ads and banners everywhere and the ads on Facebook and their data commercialization is not an issue people out there care enough about, so shareholders should stay calm and relax. People will stay and continue to be active on Facebook.

Ello is a mix between Facebook and Tumblr and I think it will be heavy to compete with Facebook right now. There are a lot of social networks out there and I feel that Ello is just another Google+, and If they didn`t make it, why should Ello? And do we need them all? In my eyes yes, but only if they have a product.

 

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.

Leave a comment

Filed under Stocks

Tagged as , , ,

by | September 25, 2014 · 2:20 pm

What`s next in the stock market?

Take a look at the Silver. Now trading at $17,50! Down another 1,17% only today! Gold is also in a red territory, trading at $1,210,80. Down -0,71% so far today. Copper is trading at $303,95, while Crude Oil (Brent) is trading at 97,20.

This is not what many investors expected. Many was bullish on gold and are still buying with both hands, but the precious metals is declining every day. Yesterday, we saw good economic data. Housing prices are up in the best market in 22 years. What will happen next in the market. Please be sceptical about everything I say, but as an investor I need to predict the market.

SPX Sept 14

Here are some thoughts: The U.S economy can continue to grow with inflation subdued and the interest rates will probably increase next year, but in a gradual pace. Stocks will probably be supported by higher earnings instead of higher valuations. If so, the S&P 500 will continue to go up to about 2,250 next year.

But what if the stock market goes up like I mentioned above and the valuations melt up in the prices of the stocks when the growth remain the same, and at the same time, the dollar keeps going up and remain strong? Then a lot of capital will flow into the U.S market again. Fed will slow down its pace of monetary normalization, and companies support higher stock prices with more share buybacks.

Maybe this is the end? This is the top, and it stops right here. It is the end of the bull market. It is a slowdown in Japan and in Europe and China has a housing bubble that will burst, and all this will stop the whole global economy.

It`s many outcomes, and that`s why it is important to trade what you see, not what you belive. Expect the unexpected, because you`ll never know what`s gonna happen out there, but when it happens, it happens fast.

 

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.

Leave a comment

Filed under Commodities, Stock market

Tagged as , , ,

by | September 24, 2014 · 2:14 pm

Why not print more money?

Let`s print more money and solve the debt problem. That sounds great, but unfortunately, it isn`t so easy as that. We will not be wealthier if we print more money. That is difficult to understand, and why is it like that?

money2

If we print more money, prices will increase and that`s what we call inflation. Let`s suppose the United States printed a lot of money and gave it to everyone in the country. People would pay debt or save the money, but most of them will be spent on different things.

Today, I belive most of them would run to the shops and buy iPhone 6 or the latest version of Xbox. But this would be a problem for both Apple and Microsoft, because the demand will increase. They will simply not have enough products to sell to the market, which means the prices will go up, which means a massive inflation, and our money is devalued.

If Apple and Microsoft increase the production to meet the demand in the market, it will be a problem for the factories too, because their capacity is limited. If the demand increase, the production will also increase, so the prices goes up at the retailer, Apple and factory.

The cost per-unit will rise because of the rise in labor cost at the factory. A rise in cost at the factory rises the price of the product in the shop. All this because of an increase in the demand for the product.

Wages are prices. An hourly wage is the price a man charges for an hour of labor. It`s not possible to stay at the same level if employees work overtime. This is added cost. In some industries it will be a problem to have increased demand, and some will need to hire extra labor. Extra labor will increase wages.

Do you think employees will work more or less if you gave them a lot of money? Labor market pressures requires wages to increase, which means the cost per unit must increase as well. Retailers must raise prices or simply run out of product.

Inflation is when the supply of money goes up and the supply of goods goes down. At the same time, the demand for money goes down, and the demand for goods goes up. Inflation can be avoided, if the factors I mentioned is in balance. It`s all about the balance between the supply of money, and the supply of goods.

Look at Japan. They have printed more money than the U.S, but inflation and interest rates is stable and it has been like this for about 25 years now. They must be doing something right to control the supply and demand of money and goods. All this is theory. Fed Chair Janet Yellen is now warning investors, telling them that the interest rates will start to increase. Many investors are waiting for an imminent hyperinflation. Normally, when the stock market goes down, the interest rate goes up. They are going in the opposite directions.

People think that printing more money will give them more wealth, but that`s not true. If we all have more money, we will not be more wealthy, because more money does nothing to increase the amount of wealth or more «things» in this world.

Why is it like that? It is because the same number of people are looking for the same amount of «things», and that on average will not make people wealthier than before.

 

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.

Leave a comment

Filed under Quantitative Easing, Uncategorized

by | September 23, 2014 · 2:16 pm

Microsoft & Minecraft

All the kids around me are sitting in front of their computers and playing games, and I don`t know what`s so funny with the game. I asked them yesterday, because you can`t win something and you are not competing with someone. So, why is it so funny?

The kids love the game and they play Minecraft. A free-to-build sandbox game, which is developed by the Swedish independent video game developer Mojang AB. The company is founded in May 2009 by Markus Persson in Stockholm.

Minecraft-logo

Markus Persson founded Mojang alongside his best friend Jakob Persèr, with Carl Manneh later brought in as a CEO. Whithin a year, the company grew to a size of twelve employees. In 2011, the founder of Napster and former Facebook president Sean Parker offered to invest in Mojang, but was declined. A year later, Mojang had accumulated revenues of over $80 million.

On September 15, 2014, Microsoft announced a deal to acquire Mojang for $2,5 billion in a deal to be made official by the end of the year. With the stakes in the company bought out, the three founders will leave the company.

Is that a problem?

Probably, because in my point of view, the «assets» is gone. I`m in doubt about Microsoft’s skills to take Minecraft to the next level. Do they have the right expertise to do that? I hope so, because if Microsoft do the right things, I think Mincraft can be the new virtual kind of the popular Danish plastic-bric-company; LEGO.

The private company LEGO is valued at $14,7 billion and they have great success. You can only imagine how the opportunities are for Microsoft? Really big I think. Minecraft has sold over 54 million copies across all platforms.

Microsoft’s new CEO Satya Nadella has made his first major acquisition since taking over the leadership after Steve Ballmer. Microsoft has been known to make some expensive acquisitions under Steve Ballmer, and many companies were later sold at a loss or absorbed into the company without unlocking new value.

I think Microsoft can boost sales of both Xbox and Minecraft. Microsoft will create new editions of the game and set up a film and merchandising franchise, but I see a little bit trouble in the long run because of the lack of the founder Persson.

Minecraft has been around for over four years now, and longevity and consistency in this business isn`t normally part of the equation. Games tend to be trendy, but Minecraft seems to be one of the few exceptions to this rule, and that`s probably why Microsoft see the potential in this game.

Back to our Danish friends in LEGO. Think about it. LEGO is still hot for the kids, and have been on the market since 1932! Can you belive that? A family-owned company based in Billund, Denmark, which is the world`s largest toy manufacturer, surpassing Mattel, previously holding that position.

The word LEGO is derived from the Danish words «leg godt», meaning «play well». The word «lego» also means «I gather together» in Latin, and «I connect» or «I tie» in Italian. LEGO`s revenue in 2013 was $4,7 billion, while Mojang generated only $326 million the same year. That`s nothing compared to Microsoft’s $23 billion in the last quarter, so it would do little to move Microsoft’s share price, adding about $75 million a quarter to the top line and about $30 million to the bottom line.

But look at the iconic brand; LEGO. They have more than plastic lego bricks. They have grown to include factories throughout the world and have 11,755 employees (2013). In addition, they have built four amusement parks around the world, known as «Legoland».

Each park features large-scale Lego models of famous landmarks and miniature Lego models of famous cities. Legoland was first built in Lego`s home town Billund in Denmark. This was followed by Legoland Windsor in England, Legoland California in Carlsbad, US and Legoland Deutschland in Gunzburg, Gemany.

In addition, they opened Legoland in Winter Haven in Florida, and Nusajaya, Johor, Malaysia. Now, they are planning to open a new Lego hotel in Asia. Merlin Entertainment is also planning to open several parks in Legoland Dubailand, Legoland Nagoya, and Legoland Korea. They have also opened four new Legoland Discovery Centres, which take the Legoland concept and scale it down to suit a retail park environment.

You can imagine what opportunities Microsoft have with this game, but do they have the culture to expand the brand?

 

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.

 

Leave a comment

Filed under Stocks

Tagged as , , , , , , , , ,