Wednesday will be an important day for the US dollar. The Federal Reserve will announce the interest rate. Although the market anticipates a rate hike, the confidence is not as high as usual. Moreover, the tone of the central bank will affect the USD a lot. Follow the meeting to determine the strength of the USD. Also on Wednesday, traders will get a chance to trade on the British and Canadian inflation data and the New Zealand economic growth.
Thursday will be highlighted by central bank meetings. The Bank of Japan and Bank of England will release their interest rates. The market doesn’t expect any changes but banks’ speeches will determine directions of the currencies. Also that day, Australian jobs data will give an opportunity to trade.
The end of the week will bring important indicators for the US dollar, British pound and Canadian dollar. GDP, Core Retail Sales figures and Bank of Canada Business Outlook Survey will put pressure on the CAD. GDP and Core Durable Goods Orders will affect the USD. As for the GBP, current account data will either support the currency or pull it down. Let’s have a look at the technical side.
When the GBP recovers?
Last week was full of events related to Brexit. A postponed Parliament vote, a vote of confidence and the lack of willingness form the European Union to renegotiate the deal pulled the British pound down. The GBP/USD pair reached lows of April 2017. Risks of the further decline prevail as the market is waiting for the US rate hike that will support the US dollar. If there is more negative news on the Brexit and the USD is strong, the pair may fall to 1.2364. A breakthrough will provoke a plunge to lows of March 2017. Vice versa, the pair will be able to recover. A way to the first resistance is long.
What will happen to the EUR/USD?
On the weekly chart, the EUR/USD pair has been trading sideways for 7 weeks. If the Federal Reserve supports the USD, risks of the fall beyond the horizontal channel will increase. The support lies at 1.1120. If the USD isn’t that strong and the euro is encouraged, the pair will stick above 1.1424.
What is the trend of the USD/JPY?
The direction of the USD/JPY pair is also soft. To leave the sideways channel, the USD needs to push the pair above 114.40. If the USD is strong enough and the Bank of Japan isn’t able to support the yen, it may happen. If the USD isn’t able to stick at psychological highs, the pair will move to 111.26.
Again the US dollar index couldn’t break above 95.70. A new week will bring a lot of important economic events for the USD. If the USD finds support in the economic data, it will be able to test the resistance again. Otherwise, the index will fall below supports at 94.45, 94.05. A break below 94.05 will provoke a plunge to 93.40.
How will the USD affect other currencies?
The EUR/USD pair was trying to recover after the significant fall. However, Italy budget issue still weights on the European currency. The weakness of the USD will let the pair to try again. To keep rising the pair need to gain a foothold above 1.1627. The next key level is at 1.1710. However, if there is negative news for the currency. The plunge below an important level of 1.1530 will be likely.
What about the USD/CAD pair?
The pair keeps trading within the downward longterm channel. If the USD is weak and the Canadian data are supportive, the pair may fall below the support at 1.2985. It will provoke a further fall to 1.29. If the USD recover, we can anticipate a rise above the resistance at 1.3068.
Let’s have a look at the events that will affect market moves.
On Tuesday, we will get economic data for the British pound, New Zealand dollar and Australian dollar. Average Earnings Index will affect the British pound. CPI data will become one of the crucial drivers for the New Zealand dollar. Monetary Policy Meeting Minutes may give clues on the future direction of the aussie.
On Wednesday, traders will pay attention to the British CPI data and American meeting minutes.
Thursday will give traders opportunities to trade on the Australian jobs data and British retail sales data. Moreover, the European Economic Summit will take place on that day. It will cover a range of global economic issues, including Brexit, and the economy. Be ready for a high volatility on markets!
Friday data will affect the direction of the Canadian dollar. CPI and Core Retail Sales figures will define the direction of the currency.
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The race continues between Microsoft and Alphabet, as Apple and Amazon have already reached the Trillion Dollar market capitalization. The four magnets have been competing since the beginning of the year in an attempt to overthrow one another at becoming one of world’s Trillion Dollar Company. Could there be a third Trillion Dollar Company in the close future? Let’s look at the facts.
At the half of May, Apple had quite a large advantage of about $140 billion in front of the remaining three companies. The race was tight for the second runner up between Alphabet, Amazon, and Microsoft with only a couple of tens of billions between them. In fact, the 2nd of August, Apple became the first ever company in the world to reach a market value of over $1 Trillion. Shortly after, Amazon managed to get a great head start and just a month later became the world’s second Trillion Dollar Company. Before we can debate which might be the world’s next Trillion Dollar Company, let’s get an overview of Amazon’s financial year so far.
The second Trillion Dollar baby, Amazon was closer to the next runners up – Microsoft and Alphabet – than to Apple, managed to cover $100 billion – more than 10% of its value – in just a month. From heavy drone delivery concept to proprietary package delivery, all the way to the insertion in the food industry, 2018 seems to have been a really good year for Amazon.
The company scored a trifecta this year by having:
doubled in share value by Q3,
surpassed the $2,000 psychological barrier,
reached the Trillion Dollar market capitalization.
The chart below illustrates some of the most important events that influenced its shares this year.
We’d be tempted to say that it couldn’t get any better, but there is more to it than meets the eye, and analysts are already making great forecasts for Amazon’s upcoming months.
The chase for bronze
Microsoft’s current market cap is of $856.61 billion and counting, down from the peak of $861.37 billion. The company has dedicated this year to innovation, foraying the world of blockchain technology, acquiring Artificial Intelligence start-up – Bonsai, all the way to investing in GitHub – a leading software development platform. Following the chart below we can see how it stands so far, compared to its main challenger Alphabet.
On the other hand, Alphabet’s market value reached $815.05 billion, down from $869 billion. Based on the chart from above we might say that it followed Microsoft’s trend. However, Alphabet focused this year on diversity by investing in experimental fields like mobile payments, artificial intelligence, and Waymo – self driving car company.
Upcoming events that might shake giant companies market quotation
Since the end of August, neither of the two tech giants seemed to get any good vibes from the markets. In addition, Senator Bernie Sanders is preparing a new tax bill for giant companies. The so called “Bezos bill” is apparently focused on pushing companies with over 500 employees to either pay them well enough to not qualify for benefits or pay for their benefits if they do qualify.
If Bernie Sanders’s bill will not affect Microsoft and Alphabet in any way, on October 25th we might see a stir in the markets, as on this date both magnets are due to publish Q3 earnings report.
In a speculative market knowledge is king
Which of the future market events might cause more volatility, enough to skyrocket one of the two companies in the 13 digits market cap? Knowing before might make all the difference, or it could make a great event pass unobservable.
A better chance at speculating on future market events, aside from the use of fundamental analysis, could be revolving to the technical one. It has proven to be using multiple times if used with caution. If you’re interested in learning more about this, you can access for free the webinars offered by Stratton Markets.
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DasCoin, the Currency of Trust, is continuing its rapid expansion and will now be traded on IDAX, marking its fourth listing on a cryptocurrency exchange. This listing was announced in late August, and trading begins 5th September 2018.
With this listing, DasCoin can be found in addition to more than 40 other tokens and coins on the IDAX exchange, which also offers a consistently high trading volume. This marks the fourth public exchange listing, indicating an expansion of trading opportunities for DasCoin. The International Digital Asset Exchange, IDAX, is based in Mongolia, helping DasCoin reach new traders.
What DasCoin Has to Say?
Michael Mathias, DasCoin CEO, discussed the start of trading on IDAX, expressing excitement about the listing. Mathias sees this as an acceleration of DasCoin’s trading potential. He pointed out that a particular feature of IDAX that the DasCoin team appreciates is the chance to trade in Chinese RMB. Additionally, he feels that the partnership with IDAX will help DasCoin work toward its goal of trading within key geographical regions worldwide. Since IDAX has a unique history, starting as a blockchain research center, Mathias feels that it is an excellent addition to DasCoin’s partnerships.
The arrival of DasCoin on IDAX is likely to be followed with a listing on CoinBene, which is among the top 10 exchanges according to CoinMarketCap. That fourth listing followed listings with BTC-Alpha, CoinFalcon, and EUBX in April 2018.
Listings on public exchanges are not the only accomplishments DasCoin has achieved in recent months. The Currency of Trust also recently partnered with Blockfolio, a popular cryptocurrency specialist application that is known as the top free crypto portfolio management application.
Overall, DasCoin aims to take the strengths of emerging and traditional digital currencies while improving on their weaknesses. Thanks to the use of a distributed ledger built on BitShares and Graphene technology, the DasCoin blockchain can handle as many as 100,000 transactions each second. In fact, DasCoin cut the block time in half last month, bringing it from 6 seconds down to just 3 seconds. This accomplishment made DasCoin among the quickest blockchains in the world and dramatically boosted the settlement speeds.
What Else There Is There to Know About DasCoin?
DasCoin sees itself as part of the evolution of money by providing a method of exchanging and storing value. This blockchain-based currency delivers scalability, security, balance, efficiency, and speed. DasCoin hopes to deliver improved performance over other currencies and blockchains via operational efficiency, wider distribution, increased transactional capacity, and greater regulatory compliance and governance.
August was a difficult month for cryptocurrencies. The price of bitcoin dipped and the price of some altcoins plummeted. What was a painful loss for crypto holders, turned out to be an opportunity for outstanding gains even for day traders who were able to take advantage of price volatility.
A smart contract for difference (CFD) orders made it possible for trader interested in crypto markets to make a profit even in the first half of August when practically all altcoins were plunging.
In that case, every bubble is an opportunity. “We’ve seen six big bubbles, each more epic than the previous one, and each bubble is astonishing when they’re happening but when you look back they look like pimples on a chart,” Lubin said during an interview on Bloomberg Television. “With each of these bubbles we have a tremendous surge of activity and that’s what we’re seeing right now.”, Ethereum co-founder Joseph Lubin in an interview with Bloomberg.
Markets go back to business
In the second half of August, the values of Bitcoin, Litecoin, XRP and other started to recover. What can we expect from the cryptocurrency markets in September?
The summer is officially over. People come back from holidays. This usually means the world is getting back down to business. The trade volume on all financial markets tends to go up, as institutional speculators are back in the game. This may cause huge price swings for crypto.
Especially, since the bitcoin trading volumes went down during summer. It started in June and even got worse in July, however in August, when the price collapsed, the volume increased as well as its volatility.
So do the legislators
In September legislators are back to work, too. This brings lots of dynamics to the world of cryptocurrency. European bureaucrats tend to be in the vanguard of regulations. They want to keep it this way. Cryptocurrency traders and issuers of virtual currencies can expect new EU law that will probably restrain their activity.
It will take some time, but on September the 7th, the Finance Ministers of 28 European countries will meet in Vienna to discuss new rules for the sector.
On the other side of global politics, Iran is expected to lift the cryptocurrency ban in September.
In the US, the crypto market is going to make a move towards self-regulation. A working group led by cryptocurrency exchange Gemini will meet in September to discuss forming a self-regulatory organization (SRO).
In another vibrant crypto, market changes are coming too. Within two weeks the Philippines’ Securities and Exchange Commission (SEC) plans to issue “draft rules” overseeing exchanges.
China and India are clearing the way for a state-controlled. Recently China has shut down numerous blockchain-related news accounts on the WeChat social app and banned hotels in downtown Beijing from hosting events promoting cryptocurrencies.
According to sources, Indian regulator will prepare the final guidelines for a plan of the native virtual currency in September.
In Japan Line Corp, a subsidiary of South Korean search giant Naver Corporation, will launch its cryptocurrency in September.
Keep an eye on all these events, as they are great tips for smart crypto speculation.
The fundamentals seem to be strong as the blockchain technology is attracting record-high investments. A recent KPMG report, The Pulse of Fintech 2018, stated that global expenditure in financial technology companies so far this year has already surpassed that of the whole of 2017. This was mostly driven by blockchain based projects.
The blockchain industry is constantly growing. New businesses crop up and existing ones gain in size, new examples of technology adoption appearing virtually every day. The steep rise in investment is likely to continue. A survey by Deloitte shows that 40% of their respondents want to invest significantly in this sector next year.
Mainstream adoption of blockchain requires a reasonable level of legal regulations to protect customers from fraudulent actions and at the same time avoiding the risk of overregulating and stifling innovation in the process.
A recently announced Global Financial Innovation Network certainly seems like a step in the right direction. Regulators from eleven countries, including Canada, Australia, and the UK, aim to create a regulatory sandbox for businesses to test their solutions.
As you can see September will likely be a brighter month for crypto holders and as good as the post months for cryptocurrency traders. If you watch bitcoin and altcoin daily news and have your own opinion on current and future trends, it’s an excellent base to make money of day trading.
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Australian Forex & CFD Broker EightCap has recently launched the MetaTrader 5 trading platform to existing and new clients.
The improved mobile and desktop applications will enable EightCap’s clients to leverage 38 technical indicators and 21 timeframes, whilst also gaining access to new markets.
“We are committed to providing our clients with a market leading trading experience. Our clients need access to the very best tools and technology in the industry and we’ll continue to invest in these needs. Our recent introduction of MetaTrader 5 is an exciting step forward for us in this space.”
Cryptocurrencies such as Litecoin, Ethereum, Bitcoin Cash, BTG, Ripple, and Bitcoin have all been added to EightCap’s MetaTrader 5 platform extending their total trading instrument list to over 200+ products.
Under ASIC regulation, EightCap provides market access to a wide range of Forex & CFD products. Global market indices, metals, oil and both major and minor currency pairs can be traded on MT4 & MT5. Since entering the market in 2009, EightCap now boasts offices around the globe providing a wide range of client support services.
An institutional investor with a $164 million stake in Tesla (TSLA), held through 158,000 of the electric car manufacturer’s Nasdaq-listed shares, has publically pleaded with CEO Elon Musk to re-think his move to privatize the company.
Representatives of ARK Investment Management, the investor in question, have urged the reassessment through an open letter to Musk, on the grounds that they believe that Tesla’s stock price has the potential to reach $4000 within 5 years. On that basis, ARK argues that Musk’s stated intent to take the company private at a valuation of $420 a share.
Why Did Musk Want to Take Tesla Private?
Elon Musk has grown frustrated in recent months with what he considers the short-termism of capital markets. The entrepreneur, who first rose to prominence as co-founder of the online payments platform PayPal, has never quite fit the mold of a Wall Street CEO. Breaking that mold has been a huge part of his success in managing to sell his grand vision for Tesla to investors and achieving a capitalization and resources far beyond what the company’s revenue would suggest should be possible.
Tesla’s lofty valuation, higher than both traditional auto manufacturers Ford and GM with a fraction of their revenues and none of their profits, has been achieved to a large extent through the force of Musk’s personality and his ability to sell a long-term vision. However, despite the fact that the Tesla stock price (TSLA) has for years marched to a different tune than that of companies many analysts argue should be considered its peers (auto manufacturers rather than tech companies), capital markets still have their demands. Patience with Tesla continuingly missing Musk’s usually overambitious targets and timelines, and the amount of cash the company burns through, has recently grown thin. Tensions recently surfaced when Musk refused to answer fairly standard financial questions put to him by an analyst at a recent quarterly earnings report, dismissing them as ‘boring’.
While subsequently apologizing for what Wall Street media described as a ‘meltdown’, the event seems to have crystallized Musk’s growing suspicion that being a public company might not be the most conducive way for Tesla to reach its goals. Capital markets demand quarterly improvement in specific growth metrics and Musk’s argument for taking the company private is that this creates a short-term mentality that is hindering achieving longer-term ambitions.
The Argument Against Tesla (TSLA) Going Private
ARK’s representatives argue that being a public company provides Tesla with more advantages than disadvantages. The public letter signed by the investment firm’s founder and chief executive, Cathie Wood lists these as:
More ‘rapid’ ability to capitalize on competitive advantages – argued as key to network effects and natural geographic monopolies that will characterize autonomous taxi and truck networks.
Increased public profile – argued as key to launching an autonomous taxi network.
The investor also believes that the proposed buy-back of Tesla (TSLA) stock at $420, with a $100 a share premium on current price, denies investors who have backed the company the opportunity of realizing huge future returns. The ambitious $4000 a share target ARK argues Tesla can achieve within 5 years, is built on the high-margin future business model of Tesla offering driverless taxi and truck services.
It has been reported that Musk has hired Morgan Stanley to manage the reprivatization process of Tesla. However, as much as the idea to privatize Tesla was appealing, Musk and the Tesla’a management realized that “the better path is for Tesla to remain public”. Tesla shares dropped and did not yet recover after Musk’s decision to keep the electric car maker public.
RoboForex, an international company that provides its clients from different countries all over the world with brokerage services, is pleased to announce the increase of the leverage value for trading operations involving cryptocurrencies. Starting September 1st, 2018, RoboForex clients will have an opportunity to trade cryptocurrencies with the leverage up to 1:50.
RoboForex is actively expanding the Company’s services and improving trading conditions for its clients. From now on, traders with Pro-Standard, ECN-Pro, and Prime accounts will have an opportunity to trade all available crypto instruments with the leverage up to 1:50. The new leverage value is available in MetaTrader 4, MetaTrader 5, and R Trader for 7 cryptocurrencies (Bitcoin, Bitcoin Cash, Dash, EOS, Ethereum, Litecoin, and Ripple). These changes will affect both the already open and newly opening positions in cryptocurrencies. Previously, the maximum admissible leverage value ranged from 1:1 to 1:10 depending on the account type.
Denis Golomedov, Chief Marketing Officer at RoboForex, is commenting: “Many of our clients trade cryptocurrencies. It’s really important for them to cooperate with the broker, which provides the most comfortable trading conditions and the highest security level when they trade these instruments. The increased leverage will allow our clients to implement a wider range of trading strategies and significantly increase their trading volume.”
RoboForex is a company, which delivers brokerage services on a worldwide basis. The company provides traders, who work on financial markets, with access to its proprietary trading platforms. RoboForex Ltd has the brokerage license IFSC/60/271/TS/17. More detailed information about the Company’s activities and operations can be found on the official website at www.roboforex.com.
Once again, the SEC has disapproved more proposals for Bitcoin ETF.
The latest rejection has seen eight bids turned down by the authorities; two from Proshares that would have tracked Bitcoin futures, another from GraniteShares and five more from Direxion.
The result has proved to fall in line with their original decision against the Winklevoss ETF, explaining that there was too much of a concern around the legality of Bitcoin markets.
To quote them, the SEC said that Bitcoin ETF markets do not meet the requirement that a “national securities exchange’s rules be designed to prevent fraudulent and manipulative acts and practices. Among other things, the Exchange has offered no record evidence to demonstrate that Bitcoin futures markets are ‘markets of significant size.’”
What we can take from this is that the SEC isn’t keeping up with the current times.
In fact, it was refreshing to read Commissioner Hester M. Peirce’s dissent of this ruling, with her saying that “the Commission’s interpretation and application of the statutory standard sends a strong signal that innovation is unwelcome in our markets, a signal that may have effects far beyond the fate of Bitcoin ETFs.”
It is hard not to agree with her.
Considering how the 21st Century has seen a rapid development in technology and other investment schemes, it is a wonder why the SEC continues to act as dinosaurs and not take cryptocurrency markets as seriously as they should be.
For starters, Bitcoin is traded electronically which facilitates both competition and price transparency and it is an interchangeable commodity.
Those who are new investing and looking at trading strategies for beginners may only be interested in starting because of the rapid rise and success of Bitcoin. It has made trading popular with the younger generation and, even though at the time of writing 1 Bitcoin = 7,241.98 USD, is getting more and more people to invest their money as opposed to just saving it for a rainy day. (Meanwhile, Bitcoin reached its highest level this year and has gained 10% since the SEC decision to reject Bitcoin’s ETF’s).
Perhaps their reluctance to allow an ETF markets falls in line with the recent tension that has developed between the US and China. Recent developments have seen the US adding a further 25% tariff increase on goods imported from China.
There are also plans for further tariffs to be placed on 200 billion USD worth of Chinese goods.
In terms of cryptocurrency, it is well known that there is very large Bitcoin mining activity in China and so perhaps the powers-that-be are wary of potential medalling that foreign entities can have at the domestic level.
However, the regulation around the trading of Bitcoin and other cryptocurrencies is surely on its way, meaning that the Commission would see it as a far less risky investment strategy.
Whether or not that regulation is coming in the near future remains to be seen but it’s well worth noting that even if the government decides not to publicly regulate the market, we have already seen that private regulation has proved an effective method.
Furthermore, the mining of Bitcoin is not geopolitically limited, unless you consider that the mining processes occur more prominently in locations where electricity tends to be cheaper. This aside, Bitcoin is far less susceptible to being influenced by geopolitical matters compared to other trading and investment markets.
The SEC go on to say that their disapproval does not rest on an evaluation of whether Bitcoin or blockchain technology has value as an innovation or investment.
It seems that the SEC has not completely turned its back on Bitcoin and a possible ETF in the future; there is likely to be further twists ahead with a new ruling to be made at the end of the month on VanEck’s application for a cryptocurrency ETF.
The Long Swim – a first-of-its-kind 530km swim along the breadth of the English Channel – has been completed in under 50 days. On Wednesday, the 29th of August, Lead Partner FXTM hosted the emotional finale at Shakespeare Beach in Dover, where the forex broker’s Brand Ambassador and dedicated Patron of the Oceans for the United Nations, Lewis Pugh, crossed the finish line at 13:30 local UK time. FXTM Senior Staff Writer Nikola Grozdanovic writes about the completed challenge and how the partnership highlights key values for the broker.
In many ways, education is at the heart of FXTM’s values – the broker is known for regularly hosting seminars and workshops for its traders, as well as webinars in multiple languages for its global audience. This attribute, perhaps more than any other, is perfectly aligned with Lewis Pugh and the world-first challenge he’s just completed. Pugh’s driving motivation for The Long Swim was to raise awareness and educate the public about the perilous state of our oceans – a crisis caused by three main factors: plastic pollution, climate change, and overfishing. Scientists estimate that, if the situation continues to deteriorate at the same pace, there may be more plastic than fish in the ocean by the year 2050.
Pugh’s overall campaign, Action for Oceans, a planned series of challenges which has been launched by The Long Swim, is to try and get governments to take action and secure 30% of the blue waters as Marine Protected Areas (MPAs) by the year 2030. As Lead Partners of The Long Swim, and for future activities planned with Lewis Pugh as the broker’s Brand Ambassador, FXTM has initiated its first corporate social responsibility campaign with the hashtag #FXTMGoesBlue and the slogan ‘Our Oceans. Our Time’.
“At FXTM, we believe in sustainable livelihoods based not only on grounded economic practices but on protecting the environment as a whole for future generations. In this way, we are more than just a forex company,” comments FXTM’s Chief Commercial Officer, Lex Webster. “The urgency of the issue facing the oceans is part of the reason we are thrilled to partner up with Lewis.”
“On behalf of all of us at FXTM, I congratulate Lewis for accomplishing this incredible feat and for the resilience he’s shown throughout The Long Swim. We know there’s plenty of work still to do to protect our oceans, and FXTM happily backs Lewis as our latest Brand Ambassador on his continued mission to spread the message about the importance of plastic-free seas. FXTM is founded on the principles of education, integrity, responsibility, and care for its surroundings and environment; this makes Lewis and what he stands for a perfect fit for our brand.”
On Shakespeare Beach, a popular starting point for swimmers attempting the English Channel crossing from Dover to Calais, France, Lewis Pugh finished a 530km swim which is roughly equivalent to 16 Channel crossings. He is now the first person to ever swim the entire length of the English Channel while abiding by the rules of the Channel Swimming Association – that is, wearing just a pair of Speedo briefs, goggles, and a cap for protection.
As Lewis crossed the FXTM finish line in Dover, a huge crowd greeted him in what turned out to be an emotional conclusion. Media representatives, sponsorship partners, the general public, officials from the Channel Swimming Association, and other professional swimmers created a rousing atmosphere. Most importantly of all, the UK’s Secretary for the Environment, Michael Gove, was among the crowd, greeting and congratulating Lewis on what he has achieved, vowing to take legislative action for more secure protection of the UK’s waters.
The Long Swim has successfully fulfilled its mission of educating the public and raising awareness for a vital cause that impacts us all. However, in many respects, this is just the beginning. Lewis will now continue to spread the message while traveling across the world – and FXTM will proudly be standing by him all the way.
Find out more about this partnership by clicking here, and follow #FXTMGoesBlue on social media channels. To discover more about FXTM’s award-winning products and services, click here.
For investors who have been watching the cryptocurrency movement over the past year, it’s apparent that the so-called “crypto mania” has come to an end, or at least on hold for a while. After cryptocurrency prices skyrocketed towards the close of 2017, all of the top 10 high market cap coins have now settled into more muted prices down, in some cases, nearly 80% from their all-time highs. Looking at the charts for bitcoin (BTC) and ether (ETH), it’s clear that the impressive bull run has tapered off to arguably more sustainable levels.
As with nearly everything in the economy though, industries are connected together one way or another. One of the questions many in the cryptocurrency world hadn’t considered after the decline of crypto prices is how that fall will impact other facets of the economy. That fall in cryptocurrency prices, along with an increased focus on newer consensus mechanisms that aren’t processing-intensive (like different variants of proof-of-stake over the current proof-of-work model), has led to a decline in sales of graphics processing units (GPUs) for producers like AMD and Nvidia. While mining on the Bitcoin network is dominated by ASIC miners, other cryptocurrencies are still largely mined viaGPU mining operations, though that could soon be changing.
Crypto GPU Sales Down
Nvidia, the popular GPU manufacturer known for making a variety of cards for the gaming industry and, more recently, the crypto mining industry, recently announced a “substantial decline” in revenue from cryptocurrency miners. According to the company’s CFO Commentary on Second Quarter Fiscal 2019 Results, the company was anticipating a drop in GPU sales, though the reality was more significant than they accounted for.
According to the report, “Our revenue outlook had anticipated cryptocurrency-specific products declining to approximately $100 million, while actual crypto-specific revenue was $18 million. Whereas we had previously anticipated cryptocurrency to be meaningful for the year, we are now projecting no contributions going forward.”
Competitor AMD is in a similar situation as well. After releasing second quarter earnings earlier in the summer, the chip producer noted that their quarter-over-quarter decline in revenue in the computing and graphics segment was “primarily related to lower revenue from GPU products in the blockchain market.”
Cryptocurrency prices aren’t the only factor to blame for the decline in GPU sales either. One of the topics at the center of the cryptosphere right now is about alternatives to the standard consensus mechanism known as proof-of-work (PoW). As newer methods are proposed, developed, and eventually implemented, GPU sales are likely to continue declining in the crypto-related industry.
Heavy Infrastructure Investment
Besides trading and investments made directly in the cryptocurrency world, there has been a significant amount of investment funneled into business related to the crypto industry as well. Unlike the early days of bitcoin, cryptocurrency miners are no longer individual enthusiasts running gaming PCs in their bedroom.
Nowadays, there are entire cryptocurrency mining operations being funded and built across the globe. In Montana, US, Power Block Coin LLC is investing $251 million into a new cryptocurrency mining farm where the facility will be stocked full of mining equipment, and they’re not alone.
In upstate New York, US, there’s an even larger cryptocurrency mine under construction. The new facility in Massena, NY is being built by Coinmint and is estimating up to $700 million in investment going to the mining operation. But with all this funding being put into mining farms and large-scale operations, investors in these ventures are beginning to wonder what’s to come of them in the event that they become obsolete in the crypto world or if interest in mining dies off more. Here are some of the alternatives.
Crypto Mining Alternatives
While the cryptocurrency markets are cooling down on GPU mining, there are still viable alternatives for all the hardware and infrastructure created in the industry. Looking back to the comments from Nvidia’s CFO, there’s another area that led strong growth throughout the year that aided in offsetting a decline in crypto-related GPU sales. According to the CFO commentary:
“GPU business revenue was $2.66 billion, up 40 percent from a year earlier and down 4 percent sequentially, led by record performance in Gaming, Professional Visualization, and Datacenter, offsetting a substantial decline in cryptocurrency GPUs.”
Professional visualization, video rendering, and developing AI are all areas of the tech economy that cryptocurrency farms can look to in the future. If investors are looking for a return on their investment, farm operators still have options. In fact, there are companies in the space already angling themselves for a significant shift in the coming years.
Marco Iodice is the co-founder of Leonardo Render, a blockchain-based startup working on incorporating much of the infrastructure already in place for mining to profit from large-scale, enterprise-level graphical rendering needs in the growing CGI industry. All of those mining farms can put their GPUs to work for them not mining, but as a means for graphical rendering. He sees the same thing that Nvidia saw in revenue as well and believes there are other solutions for miners, saying that:
“In 2017 we witnessed the ‘gold rush’ of GPUs with people gathering as much hardware as possible to grab some crypto, which caused the price of hardware to skyrocket along with the price of cryptocurrencies. Now that the market is down and there’s less interest in mining, many have hardware that is only worth half of the purchase value. So the best solution, in my opinion, is to keep the equipment so carefully collected and assembled and wait for a new way of using it, ideally more profitable and less volatile than crypto mining.”
Similarly, Tatau is another blockchain-based startup that’s focusing on using the infrastructure to fill other demands. Like Leonardo Render, Tatau is connecting those with computational power across the industry to put their machines to work not for mining, but for outsourcing jobs that require large amounts of computing power. In the case of Tatau, that’s being done for developing AI and the compute-intensive processes associated with it.
Regardless of what the future holds for the cryptocurrency markets, the current state is no longer supporting GPU mining at the scale that it once was. Because of that, investors need to start looking at alternate ways for these mining operations to be put to use. Significant investments were made to create the farms, now it’s up to business owners and investors to ensure the infrastructure is adaptable for the future of the crypto world.
Anything vintage is widely regarded to be the best in its class. For instance, when talking about vintage stocks, the first thing that comes to mind is blue-chip companies that appreciated in value. The likes of Apple Inc. (NASDAQ: AAPL), Alphabet Inc. (NASDAQ: GOOG), Amazon.com Inc. (NASDAQ: AMZN) and Microsoft Corporation (NASDAQ: MSFT) and the list is long, and a lot varied than the few names mentioned above.
These stocks, among several others quality companies, also make up the list of CFD-tradable stocks on many brokerage platforms. Brokers are traditionally stricter on smaller companies being part of their list of available CFDs. Quality attracts more investors meaning that blue-chip stocks are highly liquid, which makes them ideal for CFDs.
But what really is vintage investing?
Vintage investing does not stop with buying blue-chip stocks. It encompasses a far wider market than just stocks. For instance, Etsy Inc. (NASDAQ: ETSY) describes itself as an e-commerce marketplace for vintage goods. Such include archaic artworks, handmade goods and many more.
However, over the years, vintage investing has been more about buying things that stand out from the rest rather than investing in quality stocks. Supercars, for instance, have historically been among the best vintage items to invest in while others prefer wearable items like jewelry and watches.
This may not sound like something that you would associate with investments because the general view out in the world is that people who buy these expensive products, sometimes popularly referred to as ‘collectors’, buy them for luxury. However, some of these items as mentioned in the previous paragraph, supercars, tend to appreciate in price with age. So, the older they become, the more expensive they get.
And just to illustrate how profitable investing in supercars can be, this article published by The Telegraph a few years ago puts things into perspective. Investing in rare cars, in this case, supercars can result in huge profits. For instance, the article notes that the price of a Ferrari LaFerrari more than doubled between the years 2014 and 2015. This clearly shows why investing in collectors’ items could be one of the best forms of investing.
The same thing applies to luxury watches. In this case, one type that stands out from the rest is the Rolex watch. Some people believe that if a person reaches the age of 50 years without ever owning a Rolex watch, then it is probably a sign of failure in their life. However, many vintage watches have emerged over the years, some even more expensive than the traditional Rolex watch. Brands like Hublot, Michael Kors, and Patek Philippe have launched their own vintage watches that cost a lot more than their Rolex counterparts.
Some watches cost millions, but that is mostly down to the number of diamonds and gold used in them. This does not necessarily lock out those who are not wealthy enough to spend millions on a watch. Top brands like Seiko, Armani, Diesel, and Rotary, among others, provide interested investors with varied options that fit their budget. For instance, a quick search for these brands at Tic Watches shows that investors can buy their preferred brand from as low as a few hundred US dollars while those looking for a little bit of class there are some that cost a few thousand.
One interesting fact about luxury watches is that most of them never depreciate in price. The price always goes up even when the global market is experiencing a recession. For instance, this article published on Business Insider, shows the price appreciation of the Rolex watch over a 60-year period, dating back to the 1950s. During this period, global markets experienced recessions causing major crashes in the stock markets. However, the price of the Rolex watch and many others continued to climb, rising from $150 or ($1,265-inflation adjusted) in 1957 to $7,500 in 2014.
And just for comparison, the S&P 500 gained about 177% between 1996 and 2014. In 1996, one Submariner (No-Date) Rolex watch model 5513/14060/14060(M) cost $2800 according to the Business Insider article, which implies a gain of about 168% during the same period.
It is correct to say the difference isn’t that much. However, when you factor in the stock market crashes and the fear, stress, and anxiety that comes with it, it could have been better for some investors to opt for the steady returns presented by investing in vintage products. After all, how many investors get it right in the stock market? It could be a good time to consider putting some money in vintage products. It is hard to predict when the next recession will hit the market.
South Korea has become a regular fixture in Blockchain and cryptocurrency news reports. Beyond featuring prominently in the crypto news, events from the country often determines whether the price of cryptocurrencies trade up or down in the rest of the world. The reason for South Korea’s strong presence in the crypto space is not far-fetched. As much as 33% of the country’s adult population is actively investing in and using cryptocurrency. Another survey released earlier this week shows that South Korean youths are the most active crypto investors in the whole world. As much as 22.7% of South Korean’s in the twenties are “active” in the cryptocurrency space.
Interestingly, the two biggest cryptocurrency exchanges in South Korea, Upbit and Bithumb are listed in the top 25 crypto exchanges in the world and they pull their weight with a combined daily trading volume of $200 million. This piece provides insight into the emerging blockchain and cryptocurrency ecosystem in Korea and how the country could potentially be one of the places where the mass-market adoption of Blockchain technology is realized.
South Korea is a playmaker in the world of cryptocurrencies
The estimated size of the blockchain market in South Korea jumped more than 100% from 20.1 billion Won in 2016 to 52.4 billion Won this year and the market size is expected to grow by 579% to 356.2 billion Won by 2022 as seen in the chart below.
Earlier this year, applications analytics company, Wiseapp revealed that the number of virtual currency app users in Korea increased by about 1,300% from 140,000 in October 2017 to 1.96 million in January 2018. In the data (see chart below) the increase in the number of users tracked the strong bullish performance in cryptocurrencies in the tell end of last year. Of course, recent data suggests that the number of cryptocurrency app users might have dropped; yet, South Korea remains one of the most fertile grounds for cryptocurrency and Blockchain Technology.
The South Korean Won is the third most traded national currency for Bitcoin, trailing only the USD and the Japanese Yen. The Korean Won is responsible for trade volume of about 59,573BTC to control a crypto market share of 5.81% ahead of the Euro with a market share of 1.53% and the British Pound with a measly 0.21% market share as seen in the chart below.
In fact, BTC is currently being traded as 11 market pairs against the KRW base currency with a 24-hours trading volume of 59,206BTC on 11 cryptocurrency exchanges globally.
Korea to host a global summit for crypto innovators and investors
South Korea will be hosting Block Seoul, one of the largest blockchain conferences of its kind from September 16 through September 19 at the Sebitseom Island Complex on Seoul’s Han River. The conference among other things will bring together stakeholders in the cryptocurrency space as part of efforts to help them forge powerful connections and real-world relationships.
There’s an important need to start paying more attention to the practical applications of Blockchain technology beyond cryptocurrencies. Block Seoul is being set up to be a hub for investors, VCs, traditional financial institutions, and ICOs to connect, engage, and collaborate.
Hosting Block Seoul is particularly symbolic for Korea after the country had moved to ban ICOs and regulate the operations of cryptocurrency exchanges within its territory. Block Seoul will play host to heavyweights in business, governance, tech, the blockchain, and cryptocurrency – who will lend their voices to how regulations could be used to guide and power the mass-market adoption of blockchain technology. The more than 40 speakers include former directors of the CIA, NSA, U.S National Intelligence, founders of blockchain startups, partners in VC funds, and investment bankers.
North Korea to host a crypto conference
North Korea, not to be outdone by its neighbor on the south has also revealed that it is planning to host its maiden international conference on cryptocurrency and blockchain technology in October. The details of North Korea’s blockchain conference are still sketchy and the country doesn’t have a developed conference tourism industry.
However, Radio Free Asia suggests that the event will be held in Pyongyang and for two days. Attendees can also look forward to a meet a greet session with North Korean business leaders as well displays of the country’s technological capabilities.
North Korea is not particularly the first port of call for cryptocurrency and blockchain enthusiasts, last year there were allegations that state-sponsored hackers from the country attacked exchanges and stole hundreds of millions of dollars in cryptocurrencies. Hence, it would be interesting to see how Pyongyang is able to leverage the conference to improve its image in the global crypto market.
The whole world is looking to South Korea for direction
From the foregoing, it is obvious that the whole world is fixated on developments in Asia and their effects on the global cryptocurrency markets. When Asia sneezes on crypto, the rest of the world tend to catch a cold. The fast-paced adoption of cryptocurrency in South Korea and its hosting of Block Seoul suggests that the country might yet be able to wrestle back the position to it lost to Hong Kong and Singapore by its premature decision to ban ICOs.
2017 was a year of record growth for the legal cannabis industry and the sentiment continues throughout 2018. Leading analytical research estimates that total economic output worldwide from legal cannabis reached about $16 billion; that figure is expected to increase considerably in the next few years as the legalization of medical use around the world gradually becomes more widespread.
This upward trend is being prompted by changing public opinion on legal cannabis, and emerging legislation seems to be a direct reflection of this greater acceptance. Ever growing research on cannabis points to an effective and safer solution for pain management, and the cannabis industry has also proven itself to be beneficial financially for governments, creating jobs and tax revenue.
Canada and the United States are spearheading the growth, paving the way for other countries such as the UK, Germany, Italy, and France to adopt favorable stances on marijuana production and sales. Several licensed North American companies are already experiencing global expansion, having begun exporting cannabis products and setting up production deals in Europe, as well as South America, Asia, Africa, Australia and New Zealand.
As massive growth for the marijuana industry is already the trend, and further expansion this year and beyond seems imminent, keen investors are in a unique position to take advantage of a burgeoning market that has yet to reach its forecasted potential. How can investors take advantage of this opportunity? One way is through a unique CopyFund investment strategy that eToro has developed specifically around the legal cannabis market.
“In regards to CopyFunds, we are looking at an interesting industry emerging in the public sector…which is cannabis,” says eToro CEO Yoni Assia.
eToro’s investment committee has created a CopyFund comprising North American stocks in the medical marijuana industry called CannabisCare. By selecting the top players in this growing market and rebalancing the CopyFund regularly, eToro allows clients to gain exposure to this sector through a diversified investment portfolio.
The CBOE Volatility Index (VIX) is a market index used to measure the general volatility of the stock market as implied by the S&P 500 Index Options over time. It is calculated and published by the Chicago Board Options Exchange. Analysts and traders use it to predict how volatile the market is likely to be in the foreseeable future. As such, it has gained many trading names over time including ‘the fear index’, or simply ‘the VIX’ among others.
The VIX uses the S&P 500 Index (SPX) options to capture the expected volatility for the next 30 days. The index uses the two options expirations that have more than 23 days and less than 30 days to narrow down on the 30-day timeframe.
As demonstrated on the charts above, the VIX and the SPX appear to have a direct relationship with significant spikes and curves occurring just about the same time, or within a 30-day period. This white paper the Chicago Board Options Exchange explains the whole relationship properly and also illustrates how the VIX is calculated using the SPX options.
Trading the VIX
So clearly, it looks like trading the VIX would be pretty a simple task. However, as it turns out, you cannot directly trade the VIX. However, as expert traders at Engine forex point out, the two key extremes of the VIX are known ahead of time that makes it a lot more complicated than it visually appears to be. As such, traders try to trade the VIX by trading products that track the volatility index.
Therefore, the market has created various products that traders can use to capitalize on the opportunities created by tracking the VIX. Most of these are ETNs that allow traders to hedge using funds. Some of the notable ETNs in the market today include VelocityShares Daily Inverse VIX Short-Term ETN (XIV) and the iPath S&P 500 VIX Short-Term Futures ETN (VXX).
When using the VXX to hedge against market volatility, analysts and online trading experts seem to have a bias towards going long when they anticipate a market correction in the foreseeable future. This decision is usually taken when the VIX appears to bottom indicating that it cannot go any lower.
However, as many traders have found out, this theory does not hold when individual funds and ETNs are involved. Sometimes these have moved lower, even when the VIX appeared to have bottomed, which again illustrates the potential impact of trading an asset that tracks a predictive measure of market volatility.
Therefore, in order to understand better how to trade products that track market volatility, it is important to use a shorter timeframe, in this case, the Volatility Index pegged to short-term S&P 500 Index options, represented by the Mini SPX Index Options (XSP).
It is pretty much like using a narrower window to determine how volatile the market is likely to be for the next few weeks, which is likely to return more accurate results.
In general terms, the VIX has also been used to determine the overall market sentiment and views towards the economy. When the market has a bullish view on the economy, the VIX tends to rise as investors flock to the stock market to invest in capital assets.
This is very well demonstrated in the chart above. Starting in late January 2018 to early February 2018, the market experienced one of the sharpest bull-runs in a long time as speculation hit multi-year highs, and this can be seen on both the S&P 500 Index and the CBOE Volatility Index.
However, what followed shortly after was a period of low market volatility as normalcy returned with most of the investors having exhausted their investment capital. Since then the VIX has traded within what appears to be a tighter range and this indicates high levels of market stability. This is also backed by the steady rally in the market as demonstrated by the SPX.
In summary, the VIX predicts market volatility and due to its wider timeframe, it is hard to target the two extremes making it difficult to trade directly. However, traders have adopted the practice of trading products that track the VIX and as demonstrated on the charts, it tends to pay off some of the time.
RoboForex, an international financial broker, has launched a new service, which will allow the company’s clients to deposit funds to their Bitcoin accounts (BTC accounts) by means of other cryptocurrencies. The sum deposited in alternative cryptocurrencies will be automatically converted into BTC according to the exchange rate at the moment of depositing.
Right now, this new service for depositing RoboForex BTC accounts supports more than 40 different cryptocurrencies, including the most popular ones, such as Bitcoin Cash, Ethereum, Dash, Litecoin, NEO, and others.
Denis Golomedov, Chief Marketing Officer at RoboForex, is commenting this new opportunity: “Considerable part of our client’s trade and keep funds on their accounts in cryptocurrencies. Many of them have assets in digital currencies other than BTC, which they now may use for depositing their BTC accounts. Our new solution will offer the company’s clients a convenient way to convert their assets into BTC and transfer funds between Wallets and accounts inside the system.”
It should be reminded that in January 2018 RoboForex introduced an opportunity to use BTC as a base currency for trading accounts.
In May 2018, RoboForex enabled an option to buy BTC for fiat money within the framework of “RoboForex Wallet”. The Wallet provides clients with an opportunity to buy BTC, perform trading operations with this asset, and buy the cryptocurrency back for fiat money. Along with an opportunity to buy, RoboForex clients got a chance to profit from BTC rates difference.
RoboForex Ltd is a company, which delivers brokerage services on a worldwide basis. The company provides traders, who work on financial markets, with access to its proprietary trading platforms. RoboForex Ltd has the brokerage license IFSC. More detailed information about the Company’s activities and operations can be found on the official website at www.roboforex.com.
Global investment platform eToro has launched partnerships with seven Premier League clubs including Tottenham Hotspur in landmark deals paid using bitcoin. eToro will partner with Brighton & Hove Albion F.C., Cardiff City F.C., Crystal Palace F.C., Leicester City F.C., Newcastle United F.C., Southampton F.C., and Tottenham Hotspur.
Iqbal V. Gandham, UK Managing Director at eToro said: “As a global multi-asset platform where you can purchase the world’s biggest crypto assets alongside more traditional investments, we are excited to be partnering with so many Premier League clubs and make history by being the first company ever to pay for a Premier League partnership in bitcoin.”
These partnerships mark the first step in bringing the opportunity offered by bitcoin and crypto assets to football. eToro believes that crypto, and the technology, namely blockchain that underpins it, can improve football and the world of sports. In the future, this could include addressing issues of ticket touting, problems with transparency, and providing a guarantee of authenticity for merchandise.
As a partner of these seven Premier League clubs, eToro will gain global exposure through an extensive range of marketing opportunities including matchday LED boards, player access, tickets and digital rights.
Iqbal V. Gandham added: “Today’s announcement is the first small step on a long road to football fully embracing blockchain technology. Education will be key so that industries can understand the potential and so getting global exposure through these Premier League clubs represents a great opportunity to raise awareness.
“Blockchain brings transparency, which means it can improve the experience for everyone who loves the ‘beautiful game’.”
Fran Jones, Head of Partnerships, Tottenham Hotspur F.C. said: “At Tottenham Hotspur, we are committed to technology and innovation and as such we’re excited to welcome eToro as a partner in a category that is developing at a rapid rate.”
Paul Barber, Chief Executive, Brighton & Hove Albion F.C. said: “At Brighton, we pride ourselves in being at the forefront of bringing new technologies and new ideas to football. We’re excited to welcome eToro as a partner that can help us better understand the true potential offered by blockchain.”
Barry Webber, Commercial Director, Crystal Palace F.C. said: “Blockchain technology is bringing exciting new opportunities to all areas of business sectors and we are delighted to welcome eToro as a partner so we can explore its potential in football.”
Jonathan Gregory, Commercial Director, Leicester City F.C. said: “We are pleased to welcome eToro to the Club as an Official Partner, it is exciting to be working with such an innovative industry leader. Much like Leicester City, eToro is an ambitious brand with a significant global reach and we look forward to working together throughout the season.”
David Thomas, Commercial Director, Southampton F.C. said: “We are extremely pleased to be welcoming eToro as a club partner. We look forward to working with them and learning more about the potential that cryptocurrency and blockchain technology can have in football.”
As a global multi-asset platform, eToro empowers people to invest by giving them access to the financial instruments they want. The company has created a global community of more than ten million registered users who share their investment strategies and anyone can follow the approaches of those who have been the most successful. With eToro, investors can hold commodities, stocks, ETFs and of course crypto assets such as Bitcoin and Ethereum, alongside thousands of other financial instruments all in one portfolio. In this way, eToro provides a bridge between the old world and the new. eToro believes that in the future all assets will be tokenized and crypto is the first step in this journey.
BANNG = Barrick Gold, Agnico Eagle, Newmont Mining, Newcrest Mining, and Goldcorp. They are the collection of gold stocks that would appear in all the major gold stocks ETFs, major indices in their respective countries. They have the liquidity, market cap, dividends, along with being the group of some of the largest gold miners in the world. Barrick and Newmont are the largest gold miners in the world. Both FAANG and BANNG stocks are in a global equity fund managers MSCI ACWI Index (All Country World Index). But how in love are these global fund managers with FAANGs, and how despised are they with BANNGs?
This is the first-time investors can see how underweight Global Equity Funds are in gold’s BANNG’s stocks.
How Many Global Equity Funds Hold FAANGs & BANNGs?
When looking at the 270 Global Equity Funds, with ~480 billion in AUM, we have seen the number of funds owning FAANG’s risen from 1 in 2 (51.4%) to 7 in 10, but the number of funds holding FAANG’s has been drifting down since April 2017, when it was 72.38%, but not by much to 69% at the end of July 2018. They have been clearly selling into the rally as retail investors continue to hold on.
“Global equity funds have been selling into a strength this year, building a larger underweight in FAANG and tech-related stocks. Some of that selling has been reallocated into Materials stocks but the gulf in ownership is still huge, this has further to go.” Steve Holden, Founder at Copley Fund Research
This is in contrast to BANNGs today, where only 1 in 13 (7.7%) global equity fund managers have any exposure to the BANNG group. 1 in 3 funds held the BANNG’s during gold’s peak in 2011 and even held them well after gold peaked, 31.1% of global equity fund managers peaked in January 2012. The number of global fund managers didn’t start to reduce exposure until the second quarter of 2012, and more meaningful in the second half of 2012. This is almost one year after the gold price peaked.
How Much Exposure Do Global Equity Funds Have to FAAANGs & BAANGs?
When we look at the funds with a global mandate, the average weight to the basket of FAANG’s has more than doubled from 2.0% to 4.6% since April 2011. But fund managers have held the line in keeping their FAANG exposure to no more than 4.5%. This is in contrast to BANNG’s that saw their exposure in global mandate funds fall by more than 90%, from a high of 0.061% to 0.068% at the low in 2013, and currently at 0.13%.
Let’s repeat that, Global equity fund managers only have an average weight of 0.13% allocation across ALL BANNGs. This presents a huge untapped opportunity for investors. Global Funds missed the runup in the gold price in the first half of 2018, as fund exposure continues to fall.
How Many Funds Are Overweight FAANG’s & BANNG’s?
With all that exposure by global equity managers, only 29.2% of global equity funds were overweight FAANGs, down from a high in 2011, when more than 44.4% of global equity fund managers were overweight FAANGs, relative to the MSCI All-Country World Index. Interestingly, 7% of the global fund managers were overweight the BANNG STOCKS, down from a peak of 24.9% in February 2012.
The Newmont Edge
If capital continues to flow into the US, Newmont Mining has an edge over the other BANNGs, because it is the only company that is in the S&P 500. No other BANNG will be able to do this unless they change to being domiciled to the U.S.
Over at Barrick, Executive Chairman John Thornton is taking a non-traditional approach to the gold sector, focusing on profits over production ounces. He is taking his non-mining background and focusing on creating a consistently profitable business, with the aim that many of the diversified miners have done. Mr. Thornton doesn’t have to follow the standard norms or practices as to what has been in the past, potentially setting up the company to outperform its peers as its taking an unconventional approach.
We think its welcomed. “(Thornton) doesn’t have the DNA of a mining manager, or a mining family industry executive”(National Post). We would counter, that the one thing counts for shareholders, and that is delivering shareholder performance over anything else. If he is able to deliver on earnings, the share price will follow.
The contrarian view over the next 2-3 years puts the odds in favor of BANNG’s outperforming FAANGs, as FAANGss come under political pressure, typically highlighting the end of a sector run. Global Equity Fund Managers are light on BANNG’s, so those positioned with a view over a 2-3 year time horizon will be able to capitalize on fund flows back into the sector.
While governments are opening up to miners to expand in their countries to create jobs as we have seen in Canada, Brazil, and the United States, the Risk-Reward for fund managers presents an opportunity shift from FAANG’s to BANNG’s with better asymmetric opportunities. We think this is the beginning of BANNGs versus FAANGs as we see a sector rotation into materials and FAANGs comes under political pressure, a common occurrence at the end of a sector cycle.
This article was written by Paul Farrugia, BCom. Paul is the President & CEO of First Macro Capital. He helps his readers identify mining stocks to hold for the long-term. He provides a checklist to find winning gold and silver miner stocks and any commodity producer.