Comment of the Day
1st March 2023
Video commentary for March 1st 2023
A link to today's video commentary is posted in the Subscriber's Area.
Some of the topics discussed include: China rebounds on stronger PMI, copper, steel, gold, platinum firm, Dollar eases, Treasuries touch 4%, Europe stocks pause on higher inflation readings, Startups running short on funds.
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Email of the day on precious metals and buying Ukrainian stocks
Could you please share your thoughts and help on the following two issues.
1. It seems that gold and silver found some kind of support after recent decline, both on the upper side of the underlying ranges, at about $1,800 and $21 respectively. Do you think, it can be so? Should we await them ranging for significant amount of time, as they usually do? Can this be just a short-term support after which decline will continue? And what about platinum?
2. Baron Rothschild is credited with saying, “The time to buy is when there's blood in the streets, even if the blood is your own.” Also, John Templeton bought shares of more than 100 companies at the beginning of the WWII. I think, some investors may consider it worthwhile to look at the Ukrainian stock market today. But it is rather small, and information is poor.
In the chart library, it is even not clear what is the main stock index. With your resources, maybe you can look if there are any instruments available for international investors, be it Ukrainian ETFs or mutual funds. At East Capital, that specializes at East European markets, I found none. The same, at Franklin Templeton. Ukrainian leading firm Dragon Capital seems to offer just brokerage services and private equity, not asset management. I suppose, the Ukrainian market is too small to be considered for a separate fund but may be, say, an East European fund with Ukrainian stocks can be found. Also, 10-15 years ago, the Warsaw Stock Exchange, in an attempt to become the regional financial centre, courted Ukrainian companies as well so some of them can be listed there.
Eoin Treacy's view
Thank you for these topical questions. Let me take them in reverse order. I share your instinct in looking at potential opportunities in Eastern Europe because valuations will have certainly improved as a result of the war. However, it is also worth considering that the war is not over. In buying today one is taking the bet the war will be resolved favourably and minority shareholder interests will be respected in future.
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Chinese Markets Roar Back on Upbeat Data Ahead of Congress
This article from Bloomberg may be of interest to subscribers. Here is a section:
China’s manufacturing activity recorded its highest monthly improvement in more than a decade in February, while services also showed stronger-than-expected performance. With home sales rising for the first time in 20 months, the string of positive data helped allay concerns over the nation’s recovery from the damage induced by its Covid Zero policy.
Eoin Treacy's view
The timing of positive news flow ahead of the Party Congress is very convenient and has boosted sentiment about the strength of China’s reopening. The Hang Seng Index in Hong Kong rebounded emphatically from the region of the 200-day MA to confirm near-term support and, potentially, a high reaction low.
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Eoin's personal portfolio: commodity long initiated and stock option long initiated February 14th 2023
One of the questions subscribers ask most often is how to find details of my open trades. To make it easier I will simply repost the latest summary on a daily basis until there is a change.
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