Sh-tdown to End

Mon, 2018/01/22 - 1:50pm | Your editor

2018 is shaping up to become another year during which our selected small caps get cashed out by takeover bids. We had only one such takeover in 2017, of Stada Artzneimittel, a German generic drug producer, by a hedge fund pair which still owe us money because the final price paid to German shareholders significantly topped what was paid to owners of its American Depositary Receipts. We also gained from two mergers, which revalued our holdings in two stocks.

Back before the Global Financial Crisis (2007-9), we got bought out of holdings regularly at huge premiums.

As of today there have been two buyouts in our portfolio. Because they have not yet closed I am continuing this write-up for paid subscribers only.

 

*Amazon cancelled its collection of “Prime” membership after I sent the firm a copy of Friday's blog. It shouldn't be necessary to go public with disputes in order to settle automatic sign-ups to a sneaky system of collecting payments headlined as a “free trial.” The message about the “non-renewal” was headed “Don't forget to smile!”

 

News today from Bermuda, Brazil, Britain, Canada, Chile, China, Colombia, Denmark, Dutch Antilles, France, Finland, Germany, India, Ireland, Israel, Italy, Japan, Mexico, Panama, Sweden, Switzerland, and the USA where the sh-tdown is being ended.

Read more »

Tables Updated

Sun, 2018/01/21 - 3:45pm | Your editor

Because of the problem getting data at the end of the year I saved myself the aggravation of producing performance tables since Dec. 31. Today I resumed posting tables, although some information on distributions and dividends is still incomplete.

You can view the tables you are allowed to see at www.global-investing.com. Closed positions are for everyone while the current recommendations are only for paid subscribers. Join them to join in the profits.

Our portfolios are up substantially year to date mainly because of the limping Greenback, held back by the government shut-in and the Trump deficit plus worries about inflation and/or rate increases. As a matter of principal we do not hedge currencies, aiming to get the benefit of diversity with our portfolios. This is working out in 2018 so far.

Barron's now forces you to visit its website to read the full roundtable advisors' remarks, which is annoying. More for paid subscribers follows.

Read more »

Amazing Amazon?

Fri, 2018/01/19 - 1:54pm | Your editor

The rush into stocks at the wending of the year turns out to have been at an all-time record level. Now optimism is being questioned as the markets prepare for a budget impasse and a US government shut down. I cannot believe that either of these phenomena deserves a long-term future but I have been worried about stock bulls and Congressional die-hards for ages.

 

A major bust-up with Amazon from which I bought a book in December written in part by a college friend whose name I set as my password..I “tested” (haha) Amazon Prime which has been taking its fee monthly and tried to do it again today. I know my password but Amazon doesn't accept it and aims to bill my rinky firm monthly at a higher rate than November's to boot.

 

Sometimes I think Donald Trump has it right.

 

More for paid subscribers follows from Brazil, the Dutch Antilles, Canada, Denmark, Australia, Chile, Finland, Sweden Switzerland, Israel, India,Hong Kong, China, and South Africa.

Read more »

Times Scoop

Thu, 2018/01/18 - 1:17pm | Your editor

There are lies, damned lies, and statistics.

China surprised markets on the upside today reporting growth of 6.8% in Q4. Take this measure with a tablespoon of salt, however. Chinese growth statistics are inherently flawed, according to the current issue of The Economist, mainly because drops in growth were hidden by provincial reports in earlier years. Rather than revealing how poorly their regions were doing, the local Communist officials made up numbers to claim non-existent growth.

As a result, more recent data showing higher production is also false, because the rise is not from the pretend earlier up move, but from a hidden and much lower level of output.

However, stock markets do not question statistics. So China bourses went bullish. So too did Hong Kong, Indonesia, Thailand, and India, in a generalized rush into emerging markets plays. Then new bursts of buying hit South Africa and Turkey.

This is not as dangerous as bitcoins but it is also likely to unravel, perhaps as soon as tomorrow, before the weekend.

Of course some Asian markets have a good reason for rising, like Seoul. While my experience of ice hockey via my eldest grandchild is that it is a rough and aggressive sport, there is nothing like combining two former enemy women's teams, from North and South Korea, for creating sweetness and light among fans and officials.

I also am upbeat on South Africa as it slowly eases out the corrupt Jacob Zuma and his pals from power.

But I am bearish on markets overall, perhaps because I own GE. US interest rates will go up quicker than punters expect, and inflation may well rear its ugly head this year.

 

The New York Times today had a scoop. Martin Shkreli, who raised the price of an old drug, Daraprim, by 5000%, can be stopped.

Hospitals are planning to get into the business of making generic drugs for their own use to avoid shortages and sudden price hikes. They even may sell some drugs they don't need themselves to the public. About 300 non-profit and profit hospitals are forming a new non-profit company to stop price gauging. They will buy the drugs from selected third-parties.

The VA hospital system is looking into joining them to insure the supply of needed drugs. Former Nebraska Sen. Bob Kerrey, a Democrat, and former Medicare official Dr. Donald Berwick are among the advisors for the new group and the leading hospital rep is Dr. Richard Gilfillan, who runs Trinity Health, a Catholic chain with hospitals in nearly half the US states.

 

Today IQVIA, a pharma sales tracker, reported that prescription volumes rose 3.3% in Nov., with the biggest jump in generics, up 3.8%. However branded prescriptions fell 2.1%.

 

More for paid subscribers follows from Israel, Canada, Chile, Spain, Canada, Finland, Belgium, Germany, and Denmark.

Read more »

Where Is Everybody?

Wed, 2018/01/17 - 2:11pm | Your editor

There are between 200 billion and 400 billion stars and at least 100 billion planets in our galaxy. Why, then, are there no signs of alien intelligent life? This paradox was stated as early as 1950 by physicist Enrico Fermi. In today's reality, if even primitive rocket technology could colonize the galaxy in a few billion years, where is everybody?

One response is suggested by Prof. Brian Cox in an article published by the London Sunday Times Oct. 9, 2016. He suggested that the reason why no intelligent life beyhond the earth has been discovered is that none exists, because advances in science and engineering outstrip the development of political institutions to manage them. As a result, advanced civilizations end up destroying themselves.

(This is from the first issue of the Global Letter covering complexity, technology, and governance. It was launched today by Llewellyn Consulting, run from London by John Llewellyn, a former deputy chief of research at the Organisation for Economic Cooperation and Development, and his team of experts.)

 

More for paid subscribers follows from Britain, Kenya, Nigeria, South Africa, Ghana, Ivory Coast, Finland, Germany, Panama, Spain, Russia, India, Ireland, and Switzerland.

Read more »

Day After MLK

Tue, 2018/01/16 - 2:05pm | Your editor

 

After Martin Luther King day there is a lot of catching up to do, because world markets were open yesterday. News and guidance did not halt because of the holiday.

Today bitcoin lost about 20% of its value with other crypto-currencies also down. Meanwhile the US dollar picked itself up from a 3 year low against other major currencies. Brazil's index hit a new high and the Dow moved over 26,000. There was a l

The big shock explaining the rush into greenbacks and reais was a supposed dividend aristocrat, Carillion, a UK government contractor which upped its dividend for 16 years in a row, filing for bankruptcy. This was the result of its debt to its own pension fund and off balance sheet liabilities coming in at about £900 mn it does not have.. Its largest clients were parts of the UK public sector where it bid aggressively for contracts which lost money. Read more »

I'm A Forbes Woman

Fri, 2018/01/12 - 2:28pm | Your editor

 

Dear Reader, today I became a Forbes woman. I won kudos for no reason other than my sex, which usually works against me despite the advances of women's lib during my business career. Steve Halpern, who writes about investing newsletters, placed an article on investment advisors who are female in Forbes magazine today. You can view it on-line at:

 

https://www.forbes.com/sites/moneyshow/2018/01/12/top-women-advisors-best-stock-picks-for-2018/#3d086c504e57

 

In my early days as a journalist in Paris, I benefitted from the generosity to his colleagues—of whatever gender—by Malcolm Forbes who owned a French château and a yacht upon which great parties were held. He invited the press, their spouses, and their children for food, music, and rides in the gondola of his hot air balloon, at his palatial residence called “The Undefensible.” His refreshing attitude toward wealth was in total contrast to the shifty French leftist bias against "les nouveaux riches", particularly if American. He collected Tsarist Easter eggs and Maoist posters before they became fashionable and costly.

And from that Presbyterian Heaven where he deserved to wind up, (despite some supposed sins which are now no longer sins that we didn't know about then), I expect Malcolm Forbes is applauding Steve's initiative.

 

It looks like Angela Merkel has succeeded in creating a new “grand coalition” to govern Germany, resulting in a rise to a 3-yr high of the euro against the greenback. Even the Mexican peso gained againts the dollar. Pres. Trump's incredible lack of respect for his office doesn't help the dollar either, but it will lower the trade deficit. Crude oil has risen to $64 today because of predicted cold weather, Monday's closed market (for Martin Luther King day), and a lower dollar (in which oil is priced but not consumed.)

 

I do not have the Australian flu spreading in England, merely a bad cold. Having had the real flu, in 1969, I know how different it is from a mere respiratory infection. On the subject of medicine and women, we have an interesting note in our paid blog today about simulating childbirth and also news from Britain, Brazil, Colombia, Canada, Hong Kong,  China, Mexico, Switzerland, Israel, India, Belgium, Ireland, Tibet, Taiwan, and Germany.

Read more »

Home Again, Home Again, Jiiggity Jig

Thu, 2018/01/11 - 4:45pm | Your editor

Back in New York having missed the great freeze. But I did manage to get a bad cold probably from someone who flew in the same Norwegian Air Shuttle as we did yesterday. Again our flight was delayed, this time because there was baggage put on our plane without a passenger to go with it, which resulted in a security alert. I have a suspicion that someone from a rival full-price airline may be causing these incidents.

  Read more »

Last London Letter

Mon, 2018/01/08 - 3:35pm | Your editor

This is the last London blog and I will resume writing Thursday if I survive the journey to flooded JFK Airport and icebound Manhattan. The main reason is that we are visiting a museum with friends, then having lunch with them, and then attending the worldwide Harvard Day parties here in London for the first time on Tuesday. So I will not have time to write and Wednesday we fly home.

 

More news today from Israel, Canada, Denmark, Ireland, Israel, Spain, Brazil, Chile, Germany, Switzerland and Britain.

Read more »

Cold Calling

Mon, 2018/01/08 - 9:40am | Your editor

Global warming has caused an overwhelming heat-wave in Australia, which led to cricket matches being cancelled, and also great winter fury in east coast America, called the bomb-cyclone. It is cold in London but dry and if we bundle up we are fine outside. But were we in Manhattan we would have to remain indoors.

 

Some of the very stable geniuses who don't believe in global warming mock the scientists' linkage of freezing weather with the industrial impact on the earth's climate. While hard for the simple-minded to grasp extreme cold iconfirms that pollution and carbon are potentially harming life on earth. Warming doesn't only explain hot Oz weather; it also explains extreme cold and deadly storms in North America.

 

At age 81, Mark Mobius of the Templeton fund management group is retiring from directing its activities in emerging markets, as he had been doing for 40 years. Mobius, born in upstate Rochester New York to a pair of immigrants from Germany and Latin America, and studied economics at Boston University where he got his BA and MA. I ran into him first when he was a graduate student at MIT. In 1961 he, under the name Joe Mobius and your editor participated in a Harvard government department seminar run by Prof. Barrington Moore. Moore, a Sovietologist, was trying to figure out whether economic factors hampered or favored the rise of democratic political systems. Mobius got his PhD from MIT in 1964.

Mobius's first job was developing a dairy industry in northern Thailand. He then became a consultant on Asia markets from Hong Kong. Then he worked for Vickers da Costa and a Taiwanese investment firm, International Investment Trust Co., before jumping ship to join the legendary John Marks Templeton's Bahama-based company fund management in 1987. He was not the first to plug emerging market investment, a role which was taken by Antoine van Agtmael who invented the term and created databases for emerging markets earlier in the 1980s on behalf of the International Finance Corp., the private sector arm of the World Bank. Agtmael created the first emerging markets country funds. But Mobius was the first to create a worldwide fund for these emerging countries.

One result of joining Templeton was that Mobius reversed his former first name, Joseph, to a middle name, to prevent any confusion with John Templeton. Like his mentor, Sir John, who renounced his US nationality and became Bahamian-British, Mobius did the same and took German nationality. Because of his baldness he was often called the Yul Brynner of emerging markets. During his prime years he travelled 200 days per year, in part the result of his not being allowed to spend more than 183 days per year in the US lest he become a taxpayer. Besides his well known hands-on flying visits to emerging markets company the funds were considering investing in, Mark also acted as a spokesman for the Templeton group, now merged into Franklin Funds (NYSE-BEN).

Mobius will formally retire Jan. 31. The way was prepared 2 years ago when BEN named Stephen Dover head of emerging market equity. Then last March, Mobius stepped down from 6 funds he helped manage, only remaining to run Templeton Frontier Markets with Tom Wu who will now manage solo.

When Mobius joined the late Sir John Templeton in 1987 he was the only analyst for the early years. By last year there were 50 full-timers and the assets under management topped $28 bn. BEN also now manages exchange-traded funds and the Mutual family of open-end funds.

 

More for paid subscribers follows on Templeton and other funds and Sweden, Israel, Brazil, Colombia, the Netherlands, Germany, Panama, Switzerland, Denmark, Belgium, Canada, and the USA. We start with China.

Read more »