Re: Unique financial nuggets
July 18 wsj
Sugar prices have sjlkyrocketed 21% since mid June. Too much rain in Brazil coupled with increased demand expected for Ramadan.
Re: Unique financial nuggets
July 18 wsj
Sugar prices have sjlkyrocketed 21% since mid June. Too much rain in Brazil coupled with increased demand expected for Ramadan.
uncle aap ke utility stores nahin hain. Cheeni sirf PKR 42 per Kg mil rahi hai.... Pehle aaiye, pehle Pa'iye :)
Re: Unique financial nuggets
Theek hai hum aathay hai! Zara mithai side mein Rakh deejiyega. Me gots sweet tooths!
Re: Unique financial nuggets
As most of you know Exxon paid $35b for XTO energy which was a shale gas producer. Unfortunately the purchase was at high nat gas prices in z2010. Nat gas has tumbled to $2 per million BTU.
BP and BG Group also have nat gasxassets. They had to lower long term price forecase to $4.25/MBTU FROM $5. This results in lowering of future cash flows which are discounted by rates standard in the industry. BP AND BG group had to take impairment charges of $1.3 and 2.1billion $ respectively thus lowering current profits. Exxon FOLLOWSXUS GAAP Rules. So as long as the GROSS cash flow returns > current book value of assets Exxon does not have to take impairment.
As the chartered accountants here know BP AND BG GROIP follow IFRS.
So beware of Exxon reported earnings. They are not as healthy as they seem.
Re: Unique financial nuggets
Flip side - BP has already taken charge. So capital lowered. Future depreciation lower - so future earnings higher on lower capital -- so higher ROI - return on capital.
Source: wsj Aug 3
Re: Unique financial nuggets
Our office has found there are quite a fewxchartered accountants and financial types among the Guppyans. Received request from venerable panchayat chief to invite the CAs for discussion - esp about above accounting Prof inconsistency.
Re: Unique financial nuggets
About 2 weeks ago bonds guru Bill Gross of PIMCO declared stocks dead for the long-term. He stated the last 100+ years of 8-10% return were an anamoly because returns were far higher than 3-4% GDP growth. For the foreseeable future he expected stocks to return 3-4% same as GDP growth.
Needless to add, the markets have shot up about 5% since then!
Re: Unique financial nuggets
To the ardent readers of this thread - an apology for reduced and inconsistent output. With the Libor scandal going on, our staff was heavily consulted, resulting in less time to the much awaited nuggets. But you, our readers, are not forgotten. We have a special nugget for you. So here we go.
As you know, 10 yr bond yields are close to Multics year low. So what is an investor to do?
Re: Unique financial nuggets
In this brief interval, several of you pointed out ( with rolling eyes) go to high yield corporate bonds!! To which the sat Aug 11 issue of wsj States - NOT SO FAST!#*
Re: Unique financial nuggets
The article does state"the guppians do have it partially right. High yield bonds yields 6.8% - 5% more than 10yr treasury. Since an average of 4.2% of junk bonds default each year, and investors recover 44% of money from these defaults, deduct 2% - still yielding 3% more than treasuries.
So where the beef you ask?
Re: Unique financial nuggets
Since aira gaira nathu khaira has piled onto this asset class, they have gotten (is that a word Khatti?) Expensive with yields dropping by 1.6%. However municipal bonds have not particimapated in this rally yielding a TAX-FREE 5.8% yield. Default rates are lower and recovered money from defaults higher than corporate junk bonds!
Article advises buy only mutual funds not individual munis. Of course, you knew that.
Re: Unique financial nuggets
Several astute readers brought up the fact that the volatility index (VIX) is at multi- year lows at ~ 14. They pointed out that during the heart of the financial crisis, VIX was at ~ 75-80, with fear at the maximum. The stock market had plunged to or near multi-year lows. That, they opined, would have been an excellent time to buy the market.
Re: Unique financial nuggets
So now with VIX at 14, isn't it an excellent time to sell since complacency as indicated by low volatility, appears to have set in? They also remarked that counting dividends, the stock market is at an all time high.
First, I would like to compliment these readers for digging under the hood.
Second, I would caution them not to place too much emphasis on one metric.
third I agree that thexmarket was way more attractive 3.5 years ago than now.
Fourth I would point out that people appearing to be shifting money away from treasuries. Refer to end of 30 yr bull market thread)
Fifth market is neither SIGNIFICANTLY undervalued as in 2009 march or overvalued as in 2000 march ( and to lesser extent in 2007 Oct)
Last getting in and out on a whim is best way to lose money. As always, do your own homework. Mr. Market knows best.
Re: Unique financial nuggets
I can't understand a word over here. Isn't there an absolute beginners guide to all this?
Re: Unique financial nuggets
I can't understand a word over here. Isn't there an absolute beginners guide to all this?
PowerEngineer Sahab - Ehsan Bhai is going to open a thread for beginners. Plus he has actual experience working in the finance sector. I am just posting titbits. I will be happy to answer specifics. But I want to emphasize I am not a professional finance person. This is a hobby.
As for guide investopedia.com is a good one to get started. There are other sites as well. And Dummy guide for investing etc are useful too.
Re: Unique financial nuggets
Bookmark investopedia.com, done.
Re: Unique financial nuggets
Good man!
Re: Unique financial nuggets
Since aira gaira nathu khaira has piled onto this asset class, they have gotten (is that a word Khatti?) Expensive with yields dropping by 1.6%. However municipal bonds have not particimapated in this rally yielding a TAX-FREE 5.8% yield. Default rates are lower and recovered money from defaults higher than corporate junk bonds!
Article advises buy only mutual funds not individual munis. Of course, you knew that.
There is an error. The high yld for munis are for junk or risky munis. Sat Aug 18 wsj - munis yld 3-3.5% 20 -30.
Re: Unique financial nuggets
The earning for companies in the S&P 500 increased by $78 billion overnight. This did not require higher margins cost cutting increased sales or other usual suspects. It was achieved as a result od the TEMPORARY pension relief provision included as part of a transportation law signed by President Obama. The discount rate needed to calculate present value of future pension obligations was incelreased. Higher the discount rate, loser the present value of a fixed future obligations.
So magically lots of previously underfunded pensions got fully funded.
Re: Unique financial nuggets
The earning for companies in the S&P 500 increased by $78 billion overnight. This did not require higher margins cost cutting increased sales or other usual suspects. It was achieved as a result od the TEMPORARY pension relief provision included as part of a transportation law signed by President Obama. The discount rate needed to calculate present value of future pension obligations was incelreased. Higher the discount rate, loser the present value of a fixed future obligations.
So magically lots of previously underfunded pensions got fully funded.