Tag Archives: Stock Market

Plus500 to go Public

Plus500, a global Forex and CFD broker, is going public. A leading Forex broker, founded in Israel in 2008, Plus500 hopes to raise $50 million by posting an IPO on London’s Alternative Investment Market (AIM).Plus500 to go public

Plus500′s offering will be what is called a combined primary and secondary offering wherein half of the proceeds of the offering go to the company and half go to some of the company’s existing shareholders who will be selling some of their shares in the IPO. The transaction accounts for 25% of Plus500, currently valued at $225 million. The remaining 75% will be retained by the founders. The AIM listing is being handled by the Liberum Capital Consulting Firm.

Plus500 claims to be one of the world’s leading Forex brokers with an annual turnover of $56 million and $23 million of profit (pre-taxes). The first quarter of 2013 has shown a $7 million profit before tax. With these numbers, one can certainly wonder why Plus500 has chosen to list itself on an exchange made up primarily of junior businesses and small companies. In contrast, the truly top-tier Forex brokerssuch as Gain Capital, the parent company of Forex.com, and FXCM are traded on the more prestigious New York Stock Exchange.

Plus500 maintains offices around the world and is governed by local regulatory authorities as well as the United Kingdom’s FSA (Financial Services Authority.)

Stepping Back from the Fiscal Cliff, Where to Now?

While U.S. citizens and taxpayers can breathe a little more easily now that the fiscal cliff deal has been brokered and is merely awaiting the formality of a Congressional vote, the implications were much farther reaching than just the United States. Indeed, had President Obama and the U.S. Congress not reached an accord and allowed the U.S. economy to fall from that precarious precipice it would be more than just $600 billion at stake, immeasurably more.

The U.S. economy, fragile as it is, is the largest economy in the world, and the one which is the center of the universe, so to speak, the one which all the other economies revolve around. While a recession is still not as remote a possibility as analysts and economists would like, it is at least not a looming eventuality. And just because the fiscal cliff has been avoided doesn’t mean that there isn’t some less well publicized danger ahead.

Analysts point out first that concessions had to have been made, but also that there were some laws that would go into effect on January 1st regardless of the Congress’s actions or otherwise. The taxing of the more affluent was, of course, the major sticking point between the parties and in the end the Republicans agreed to a series of tax hikes over the course of several years, which could raise as much as $600 billion for the U.S. government’s coffers. Also applicable to wealthier Americans was an increase in the dividend tax and capital gains, as well as estate taxes. Though Republicans remain in principle against tax hikes for the wealthiest Americans, they seemed to understand that in the court of opinions they would be “blamed” for the chaos which would have ensued had the fiscal cliff issue not been resolved.

What Now?

For some lower wage earners, Bush-era tax cuts will now be made permanent. However, all wage earners across the board will be affected by a 2% increase in Social Security payroll taxes, which will translate into a take home pay reduction for all workers.

On the spending side, unemployment insurance benefits were extended for an additional year, and several tax credits such as those for children, tuition and earned income, will be extended an additional five years. A cut in Medicare payments to doctors has also been avoided.

Markets had been holding their collective and proverbial breaths as they awaited word on the outcome of the fiscal cliff negotiations. Though the deadline was not met, lawmakers can retroactively implement the law so that there is essentially no harm done. The relief was first seen clearly in the world’s stock markets, with the vast majority of Asian indices logging in multi-month highs; at present,Europe’s key equity markets, i.e., the German DAX, the French CAC, the London FTSE and the Spanish IBEX, are also markedly higher. The EUR/USD pair is also higher, trading at 1.3277 from a session low of 1.3196, and not too far off the session’s high of 1.33. Other growth-linked currencies were likewise higher as optimism reigned supreme.

Though the U.S. Congress managed to pull the economy back from the brink of disaster, analysts warn that there is a still a danger ahead. Mohamed El-Erian of Pimco, the largest bond fund in the world, was recently tapped by President Obama to head the Global development Council, has cautioned that the prolonged outlook for the U.S. economy is weak. He believes that an adjustment to a “new normal” will have to be made, one which included lower growth and fewer jobs. There is still the issue of U.S. deficit and growing levels of debt which have to be addressed, sooner rather than later and El-Erian is still hopeful that the U.S. Congress will propose some “grand bargain,” one that would include medium term fiscal reforms to combat the long term budget challenges and which would put an end to the escalating problems once and for all.

Will the U.S. Congress be up for that challenge? They did, after all, just vote to cancel their own cost of living adjustment, so however improbable, anything is possible.

Stock and Forex Investing in the ASEAN Countries

While most of the ASEAN nations have been dictatorships and or communist regimes for some time, they are starting to realize that they need to move into the world of the capitalist markets and are thus in the process of opening their stock markets and currency markets to the world.

Thus Cambodia for example just opened their very first stock exchange, which, as of this writing is trading a single stock (the Phnom Penh Water Authority). The Ho Chi Minh Stock Exchange was opened a few years earlier in the year 2000 and already sports more than 300 companies traded on the exchange. In Laos, the Laos Security Exchange is also a recent creation with just two stocks being traded on their market.

All Trying to Attract Foreign Investment

The key thing to remember however is that all of these countries along with the other ASEAN nations (and especially Singapore, which has always attracted foreign investment) are eager to attract foreign investment and are thus ripe investment opportunities for those who wish to take their chances in exchange for potentially large rewards.夺宝雄兵城堡

How to Invest

One of the best ways to make investments in these countries is to look into working within their stock markets. Since almost all ASEAN nations now have a stock exchange (the exceptions are Brunei and Myanmar, though a Burma stock exchange is currently being planned and there are murmurs about creating a stock exchange in Brunei as well) it’s possible to simply purchase stocks in the various countries as an investment.

Be sure to track the various companies just as you would with more traditional investments in more established countries. It may also be a good idea to hold off on investments on the newest stock exchanges until they have matured somewhat, unless you can afford to lose the money on your bets.

Forex Markets

Most of these countries have limited Forex markets available for investing opportunities, though it is possible to purchase currencies in some of these countries as well. The Lao Kip is a good currency for going short since the currency has been steadily dropping in value versus the US dollar over the past few years. The Vietnamese Dong by comparison has been steadily rising in value when compared with the dollar. The Cambodian Riel has seen the most fluctuation of all of these currencies, with the price jumping up down against the dollar. In all cases remember that as currencies of emerging markets these are likely to be much more volatile than purchasing currencies from more established states.

Bottom Line

The bottom line is that there are investment opportunities which are a off the beaten path that are worth looking into, especially if you have the stomach for slightly riskier investment opportunities and a good handle on the Forex world in general.

Interview with Sunny Wong, Originator of Neutral Trading

Sunny Wong, Money Show PresenterSunny Wong is a Vancouver-based trader who developed his own trading strategy after falling upon hard financial times.  He is now working as a full-time trader, and earning tidy profits on a regular basis.  Sunny will be presenting his trading strategy and trading live at the World Money Show Vancouver at the end of March, as he has done in years past.  Read on to learn about Sunny’s unique and fascinating trading strategy.

How long have you been working as a full-time trader?

I started to daytrade just as the tech bubble was bursting.  It was the worst time for any newbie to enter the markets.It was approximately 12 years ago.  But my trading just became profitable in the last 4 years after I created Neutral Trading.

What did you do before you started trading?

With only a high school education I could only get into blue collar work …renovations and construction.

How did you become interested in the markets?

I retired from construction and experienced how easy it was to make money from the markets before the tech bubble burst.  Then realized how much easier it was to lose money in the markets, and I had to find a strategy that would work.  I lost more money on any strategy that I tried.  Finally just as I was to give up.  I accidently discovered and created Neutral Tading.

How did you develop this strategy?

By accident; after, trying other conventional strategies, I still lost money.  I was fed up with losing money.  I wanted to lose whatever I had left and would never trade again, like an alcoholic that would want to take the one last binge and drink himself to death.  But then, I discovered and created Neutral Trading.

What is Neutral Trading?  My strategy is basically a non-technical, non-news, non-fundamental system.  I just trade one stock, instead of diversifying as conventional wisdom says.  I hold long positions and short positions on the same stock, and then I sell on both sides of the fence.  I take my profits early and then I hold my losses, and I work them in a system that I devised which is the s0s system.  In this way, I average my buys lower and my sells higher, so that makes my break-even point a lot better than having to go all the way to the price where I entered.  I combine trading equities with options and the spot USD, so I have one set of money that makes 3 sets of profits.

This makes my strategy totally different, than most conventional traders who tries to be a specialist and trade only one market like the Forex or futures market.

How long did it take for you to become profitable?

Once I figured it out, I started to make money immediately and took my account from 30K to 300K within 30 months.

How many hours do you trade each day?

I am a full-time trader, trading 6 hours per day, 5 days per week.

During what market session?

I use active, aggressive trading during the American market session and passive trading in the Forex and futures markets. Being active means I take profits (or the markets come to me and give me a profit). Aggressive means I create a profit (or I do not wait for the markets to give me a profit, I create or force the market to give me a profit).  The aggressive trading is my defensive move.

What type of investment capital would work best for your trading strategy?

Depending on cost of stock or vehicle you are investing in.    I trade only one stock which is Kinross Gold on the Tsx.  To trade Kinross you should have a $25k minimum.

What type of platform do you use for Neutral Trading?

I have created a special excel spread sheet, which is capable of abstract accounting. I am not using any pro platforms as of now. I am working towards being more active in the futures and Forex lines, as well as working on automated robot trading.  At which time I will be looking for pro platforms.

Do you offer any teaching or coaching to share your methodology (aside from MoneyShow appearances)?

Yes, I teach a class. Yes I coach and mentor individually as well.  Advanced students learn my Neutral Trading by practicing on my real live money account.

What advice do you have for new traders?

Do not go directional – remain neutral.  It is all about how much holding you have in the long side and how much holdings are in the short side, which is all about balance.  Do not use technical indicators.  The herd uses technical indicators which rely on data from the traders that trade the front line (like Neutral traders) and the technical traders gets the data which is now old data.  Neutral traders create the data that the indicator uses, therefore neutral traders are one step ahead of the technical traders.  Do not listen to the news, it is usually too late and by the time the trader hears it, it is old news.  Trade what you see in your account, not what you think will happen.  When we think, we become normal, and just like the normal, 8 out of 10 will lose money.

Want to learn more?  Find out more about Sunny Wong here.

When Forex Fails

Investing money online is a complicated business – if it were easy, everyone would be doing it, and retiring from their stressful day jobs to make millions from the comfort of their own homes.  Still, there are many ways in which you can invest online.  Forex trading, of course, is one of them, but it’s not the only way to invest money online.  In fact, for most people, Forex trading requires a lot of technical knowledge and skill, which many people don’t have (at least not initially).  If you’re tired of losing money in the Forex market or are looking for an alternate way to make money online, check out the options below, and consider trying some out to see if they’re right for you.

  • Investing in the stock market – If you’re not looking for a quick profit, but are willing to wait things out over the long term, investing in stocks may be a good option for you.  While there are ways to identify stocks whose value may increase quickly, many people who invest in stocks prefer a long-term investment strategy.  Buying stocks online is easy and relatively affordable, with many brokerages allowing for some free trades or charging only a few dollars per investment.
  • Pair options trading – If you’re interested in the stock market but don’t want to wait for a long-term investment to mature, you can consider pair option trading, which is a relatively new way to make money online, and quite an exciting one.  With this type of trading, brokers such as StockPair allow traders to predict which of two stocks will perform better in a given period of time.  If the trader predicts correctly, he earns the stated payout in a matter of minutes or hours.
  • Binary options trading – Like pair options trading, this form of trading lets traders make predictions about how certain markets will fluctuate within a defined time period (usually a few minutes to a few hours in length).  Traders can choose from stocks, currencies, indices or commodities and make decisions based on their knowledge of the markets.  Binary options trading requires a much lower minimum deposit than Forex trading making it ideal for traders who are afraid of risking too much  money at the outset.
  • CFD trading – The most similar to Forex trading, CFDs (or contracts for difference) are derivatives products that allow traders to profit on live market price movements without having to own the traded instrument.  CFDs, like Forex, require traders to have a keen knowledge of the market, and, to truly succeed, will likely require some understanding of technical indicators.

Have you tried any of these methods?  How did it go?

Will Qaddafi’s Death Affect World Markets?

Qaddafi and the Forex MarketColonel Qaddafi, branded the “mad dog of Libya” by former president Ronald Reagan, is dead. Defiant until the very end according to his aides, he kept up his delusions of returning to power and taking Libya back for his own family’s personal gain. And now that the fighting is done with, NATO is preparing to withdraw and the Libyans are busy planning their first free elections, the question that must be asked is this: how will this affect the rest of the world? Here’s what you need to know:

Why Libya Mattered to NATO

The first question to ask if we want to understand how this will affect the world’s economy is why Libya mattered to NATO to begin with. After all, Syrians are fighting a similar battle against their dictator, but to date the leaders of NATO seem to be mum on the subject except for a handful of watered down security council resolutions.

The official answer is that Libya’s revolution had gone further than the one in Syria, to the point of open civil war and that NATO forces were there on a humanitarian mission to protect civilians in the rebel areas. However, in back rooms it has also been whispered that the real reason for NATO involvement was that Libya has oil while Syria does not. This is important because of the fact that world oil prices had been trending upward in the wake of the revolt in that country and indeed in the wake of the Arab Spring.

Immediate Reaction: Prices Trend Downward

The immediate reaction to the news of Qaddafi’s demise in world oil markets was for prices to begin to fall. However, this was quickly corrected and prices came back up again within a day or two to over $100 a barrel. Forbes, in their coverage of the death of Qaddafi speculated that world oil markets had “rapidly discounted the effect of a return of 700,000 barrels of oil” to the market.

The thing is, Libya’s oil production was fairly minimal, even before the revolution, accounting for just 5% of OPEC output and 2% of overall world oil production. This means that realistically, even if Libya’s new government rapidly cranks up the pumps and gets back to pre-revolution numbers, it will have a fairly minimal affect on the world economy.

The Elephant in the Room: Saudi Arabia

To my mind however, the elephant in the room and the one that everyone has ignored in the wake of Qaddafi’s death is Saudi Arabia. The kingdom is the world’s second largest producer of crude oil (after Russia) and thus has a much greater influence on world markets than almost any other group. The reason I’m concerned about it is that on two days after Qaddafi was killed, the heir apparent to the Saudi throne died in New York.

Crown Prince Sultan bin Abdul-Aziz Al Saud was the next in line for the thrown and news reports say that his death is throwing the kingdom into a bit of a tizzy as calls for reform grow louder now that there is no clear chain of succession. In the wake of Qaddafi’s death, I imagine that such calls could grow even more stringent as revolutionaries looking for greater freedom are emboldened in the kingdom as well.

Back to Syria

All this is also to say nothing of Syria’s Bashar El Assad, who is seeing his control crumble and his people increasingly calling for him to join Qaddafi on the dead leader’s parade. However, in the case of Syria, because it shares a border with Israel, Assad, if he feels his government is imminent danger of collapse, may well decide to try to divert his people’s attention by provoking a war with that country, thus potentially sparking another Middle East conflagration, which could in turn further disrupt world oil markets.

Bottom Line

It’s still too early to make firm predictions about what Qaddafi’s death may mean for world oil markets, to say nothing of stocks and the Forex market (both of which are quite sensitive to oil price shocks). However, it is possible to say that predictions of sharp rises in the price of oil have both been given a boost and a reason to be deflated in the wake of the news. It all depends primarily on how the rest of the Middle East takes the news and whether the Arab Spring is galvanized by it, or crushed more ruthlessly than ever.

 

Will Occupy Wall Street Destroy the Financial Markets?

Occupy Wall Street Protests

Photo Credits: IB Times

I have to admit that I’ve largely ignored the Occupy Wall Street protest movement. I’m a native New Yorker so you’d think that I would know more about it, but it’s been a while since I’ve lived in the city and there isn’t a protest of this kind anywhere near where I now live.

 

However, this past week, I could ignore it no longer. The global protest movement held last Saturday, in solidarity with the ideals of the Occupy Wall Street movement shows the kind of pent up anger that is permeating the world today. How will this affect your investments? Should you be worried? Here’s what you need to know:

What is Occupy Wall Street?

In case you’ve been living in a cave, or like me, just never paid much attention to the movement, Occupy Wall Street is a movement, inspired in part by the Arab Spring, which says that the banking system in the United States and indeed all over the world is corrupt. This is borne out they say by the fact that so many banks have received massive bailouts to keep them afloat while ordinary homeowners and wage earners have lost homes, jobs and livelihoods in part while helping to pay for these “fat cats.”

What Does Occupy Wall Street Stand for?

I haven’t been able to get a clear handle on what the Occupy Wall Street movement is about, other than extreme anger, which I admit is partially justified. At its most extreme, the movement has called for taxing the wealthiest 1% of the world’s population in order to help the other 99% get lifted out of depression and poverty. To me, it sounds like the exact opposite of the American Tea Party movement, which seems to have championed the idea of no new taxes, no matter how much the economy is hurting and the deficit is ballooning.

Extremes Aren’t Good for Anyone

The thing is, as we all know – extremes of any kind don’t help anyone to do anything. Obviously the 1%/99% movement is just as silly as the 9/9/9 tax plan being championed by Herman Cain in the United States. Neither is going to solve problems and both would make things worse if they were ever implemented – both for the United States and for the world at large.

But Will They Affect Anything?

Now here is the million dollar question (no pun intended). Will the global protests this past weekend have any real affect on the Forex market and on world investments? I’m going to go out on a limb and say “yes, but…”

The “But…” (Forex)

I say “yes, but…” because I mean that there will (hopefully) be some changes made. If Europe begins to realize that the Euro isn’t infallible and that financial regulations need to be imposed to ensure that banks and governments don’t destroy the currency, then that would be a good thing.

I think that the global protest movement will have an effect on European leaders to moderate their austerity plans, though I also believe that they will impose new regulations. This in turn should help to lift the European currency in the long term since a productive Europe will mean a strong Euro. Similarly, I believe that the American dollar may be strengthened by the Occupy Wall Street movement because ultimately it may spur much needed investment in new jobs.

However, I don’t believe the movement will have any mass effects on the Forex market since governments are likely to implement much more moderate changes than the protestors are demanding.

As for Stocks

I do expect the stock market to take a beating in the short term because of the Occupy Wall Street and global protest movements. There is a lot of anger at major corporations and banks and this will scare investors in the short term. However, I also believe that this could be a great time to invest in some bargain blue chip companies who are likely to ride out the storm and emerge stronger at the other end.

No One Gets Everything

The key thing to realize here is that while these protest movements are inspired by the Arab Spring, they’re not trying to accomplish the same things that the Arab Spring was trying to accomplish. Except for a handful of radicals, these movements simply want things to work again and aren’t interested in imposing draconian changes on their governments. This means that the Occupy Wall Street movement can have a moderating effect on government, to the point where it will try to mollify the protesters by offering some things, but by no means everything. And ultimately, that kind of give and take is what will lift the world economy out of the doldrums it currently finds itself in.