Monday, 25 July 2011

Are the first cracks in China starting to appear?

China in recent years has been the country that has underpinned much of the economic growth around the world. It's seemingly unstoppable growth has led to one of the biggest commodity booms ever seen. The demand out of China probably saved several commodity driven countries from really feeling the impact of the GFC (notably Australia and Canada).

Most of what we hear from China continues to paint this rosy picture - with growth still forecast at levels that the developed world could only dream of. However recently some factors have caused me to re-think the China growth story (and importantly what my asset allocation should be)
  1. I was recently in Hong Kong and got the South China Morning Post delivered to my room. Out of general curiosity I browsed the newspaper and was mildly shocked to see the number of articles dealing with failing factories in the manufacturing heart of China. These factors have been failing due to several factors including rising wages and rising rents
  2. Getting accurate data out of China is notoriously difficult. The propoganda and government controls make it had to seperate fact from fiction.
  3. Many factories in China cater exclusively for the U.S. With the problems the US is having at the moment how is the Chinese manufacturing sector going to survive?
  4. China's projected growth is already factored into the stock prices of many entities so there is only downside risk inherent in companies that have a significant exposure to China.

The dilemma in the above is finding stocks (especially global blue chip companies) that are not in some way dependant in China even through several degrees of separation.

Monday, 11 July 2011

Search for a broker - continued

After further digging I've narrowed my broker search to 2
  1. Interactive Brokers - Cheapest broker around by a long way and offers access to more markets than any other provider. Downside is that you require 10k minimum initial deposit AND US$120 of trading costs per annum which isn't great for buy and hold investors like myself.
  2. OptionsXpress - Not cheap relative to other online brokers but a very very intuitive system which has customer service in my area (and more importantly time zone). Downside is that it only offers access to US markets. Upside is that it is a super intuitive system to use.
I'm leaning towards optionsxpress. I don't trade often enough for trading costs to really factor into my decision. Given that I am expanding my effort into the international arena - I think the US market will offer enough diversity to me.

Monday, 4 July 2011

The broker dilemma

Until now I have been quite happy trading using Commsec, the brokerage division of Commonwealth Bank of Australia.

Recently, however, I have been looking offshore for investment opportunities as everything is so expensive on the Australian Stock Exchange due to the commodities boom. I have been looking at stocks listed on exchanges from the NYSE to the HKSE and the Frankfurt exchange. I then checked out how much the brokerage would be through my Commsec account and found that they would be ~$100 per trade (US$107)!!!!!!!!!

After looking around I found the following brokers which are open to international investors (i.e. not US only) and will post what I think about each of them as I research more:
The more I look the more I find (for unbelievably cheap rates)...will update once I have researched some more.

Sunday, 3 July 2011

Outrageous ATM receipt

The attached article from the Daily Mail has been going absolutely viral on the internet.

It deals with an ATM receipt left in the ATM (presumably by mistake) which has an account balance of $99,864,731!!!! A couple of things came to mind when I was forwarded this email:
  1. Wow - I wish I had that much in my checking account!
  2. Why does someone have that much in their checking account? Does that mean their investment accounts are many multiples of that?
  3. Why would someone with that much money in the account even print a receipt?!
Anyway if you haven't seen it elsewhere - enjoy!