Friday, December 6, 2013

A bit more reading for Friday noon

A bit busy at work, so I haven't checked up on anything, aside from seeing that the "good jobs report" made the market go up (i.e. the economy looks good) instead of down (i.e. OMG the Fed's going to taper!).

I gotta wonder if the short-term market had already positioned itself short in anticipation of a good report; then when the good news hit, they saw that nobody was selling, cos anyone who would have sold had already sold short. So they had to buy back, and now the market resumes its upward trend.

It's possible, I guess. Anyway, I won't short an up market, so I'm happily holding my stuff.

Now here's some news:

BI - US market update. The jobs report was good.

FT Alphaville - Spain's IBEX is the world's most overpriced benchmark. Andrew Wilkinson at Miller Tabak says that because IBEX's current PE is at 106% of +2SD of its 5-year average PE. Did you follow that? Shanghai, by contrast, is at 44%. Did you follow that? This means Andrew Wilkinson has told us that he doesn't realize the Spanish market has laid in utter collapse for 5 years, while China was grossly overvalued for much of that same time. Nor does he think the IBEX has a reason to go up in the next year.

Sorry, Andrew! You should figure out what the hell the numbers actually mean before you write about them.

FT beyond brics - be careful with Indian exit polls. Avantika Chilkoti points out that Indian polls are pretty useless for determining election results, so tread carefully. But here's the interesting bit:
In fact, whatever the rumours and whatever the predictions, markets tend to rally in the run up to elections in India.

Analysts at BofA ML say that if an investor bought the benchmark Sensex index six months before polling day and sold the day before, they would have made a gain in six of the last seven elections with an average return of 15 per cent. The sectors that have done well in the past are autos, energy and utilities while consumer staples have suffered.
I wonder if we should see the same effect on gold?

Mineweb - boo! hedging! scared ya! Uh oh. William Tankard at GFMS suggests gold hedging is the way forward for producers. Well, unfortunately hedging is a downward pressure on prices, so it's a positive feedback for gold price downside.

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