Bespoke Investing on Hold Money, Economics and business, Education and self-improvement, Investing in gold now, Making money at home, Not off-the-rack investing approach, Prudent investing made simple, Wealth accumulation
Bespoke Investing feature #5
For all the market noise ballyhoo Nymex crude oil stood at USD40.23 per barrel on Wednesday 20 April morning. When the Doha production freeze talks failed on 18/4 crude dropped to USD38.54 / barrel and later in the day rose to USD39.22. Apparently Kuwaiti oil workers’ strike spurred the rebound. When the strikes ended it was still hovering at USD40. What gives? Had U.S. stockpiles (which rose the previous week) had any impact?
There was no breakout of the USD45 per barrel area.
On 19/4 world gold price rose to USD1244/oz from recent near USD1225 lows. The choppy trade was just based on market noise. In the first place apparently gold safe-haven bids retreated as dollar and stocks saw better days.
Yes, the Dow gained 0.93% to close 18,004 on 18/4. As a Bespoke Investing watcher the market has reverted to some sense because the oil vortex had loosened up its grip on Dow equities. They had recently moved together around 85% of the time.
There was no doubt a knee-jerk selloff due to crude oil stocks but later better-than-expected earnings paved the stocks recovery. Still, we need to note that Walt Disney Co. gained 2.9% but Apple Inc. declined 2.2%. Nonetheless the fact is that U.S. stocks have stunningly rebound 15% from the February lows and are just about 2% below May 2015 all-time highs.
As stocks pivoted slightly higher and was reinforced by firming oil prices, gold on 19/4 was lower at USD1228/oz against the Monday 18/4 close of USD1234. One local Gold quotes closed sell MYR159.63 per gram and buying MYR152.95.
At the end of the previous week we had sold off our gold holdings, incurring a loss of 3% on our hold money since our 26 February foray. The intuitive “SELL” call was to be in better position to capitalize on averaging down since market reality does not jive with negative economic data. In addition there was MYR strengthening on crude outlook. The 15/4 EP of MYR156.49 compared unfavorably with Feb28 EP of MYR169.93 or is just 92%. Recent highest EP (on Mar 11 = MYR171.93) was was 1.1% above Feb 28.
Our Hold Money increased to MYR1775 or 88.87% of MYR2000. Bespoke Investing strategy here is one of “live to fight another day when there is a breakout of the USD1200 per ounce area”.
The Shanghai Gold Fix set Tuesday 19 April 2016 gold price roughly in between USD1234 an ounce and USD1236 an ounce. Unlike the Comex gold market the Chinese market has a deep physical gold liquidity. China is one of the biggest buyers of gold and like India it’s a Hotel California for gold bullion. The metal goes in, but cannot legally come out.
The amount of gold withdrawn from Shanghai Gold Exchange was a good indicator of physical gold demand. This unique transparent metric for Chinese gold demand is no longer published. The manipulation of world gold prices continues. China could be “lowballing” their gold holdings to protect their substantial USD holdings. Things will turn better because the yuan will make headway in the IMF Special Drawing Rights currency basket.
The weekly chart ending 22/4 for world gold prices tells it all with regards to Bespoke investing position.
Firstly, just ignore the market noise and pundits highlights . . . Thursday 21 Apr just before 10pm in Malaysia the scenario was world gold price peaked just below USD1270 – gaining 0.97%. Does this make our previous week sell call a dumb move? Then around 10.05pm it declined to USD1248 meaning a decline of 0.77% of Wednesday’s close.
Friday 22/4 gold settled at 1,229.50 down 19.50 points, which pundits accrued to a stronger USD. This is back to the level when we made our sell call. Have you observed the explosion higher and subsequent reversals – well across the commodity complex, including wheat, soya beans & corn due to funny monetary policy? Some China money moves from stocks to whatever on speculation. The small investors are “going nuts” certain pundits say.
Our EP (MYR equivalent price per gram) of MYR157.39 on 22/4 is just 0.6% higher than the recent low MYR156.49 of 15/4 whereas the corresponding USD1232/oz is 0.2% higher than USD1229.
Crude oil does offer to some stocks watchers a proxy or signs of the health of overall economies. A report noted U.S. crude prices recovered from a 6% drop on news failure to freeze oil production levels. On 19/4 morning crude touched USD40.40/barrel against 18/4 USD38.54/barrel at one stage. Ignoring all the market noise Nymex crude is hovering above USD40/barrel and still struggling to touch USD50/barrel – our benchmark for long term production sustainability. As of now we can note that crude had bottomed in February low price range of USD27 – USD29 per barrel.
Among the LinkedIn posts the one incidental feature write-up which has garnered substantial weekly views is “Leading and Controlling – the other two functions of management”. Below is the headway in response made to-date.
The contents of the above post in LinkedIn are extracts from a book, “Leading & Control Attuned with the Quran”. The URL for the book preview: https://www.createspace.com/Preview/1182677
You will find in Hope Tribute Malaysia a11th December 2015 posting relating to the book title too. Focusing on conduct will induce people to put into action the teachings hence the diversity in interpreting God’s message does not cloud the orientation of communities to become decent and benevolent. The “leading and controlling” management functions theme appeals to general readers and the book objective for action is enhanced by practical workplace illustrations.
Category: Posted by A.R. Mowe in Community and socio-economic upliftment, Education and self-improvement, General newsview