“Kohlberg Kravis Roberts’s bid for Coles and the prominent role of Texas Pacific in the Qantas takeover stir Australia’s ancestral conviction that foreigners are taking the place over,” reports John Edwards, the chief economist for HSBC Australia, in today’s Financial Review.
We’d like to take this moment to assure Australia that our intentions, as American interlopers, are completely honourable. We will not ravish, plunder, or otherwise pillage Australia’s market for retail investment information. We are merely carpetbaggers with investment ideas and a modem. And our sole hope each day is to write you letters, long ones sometimes, we admit. We hope by doing so we can warn you about the coming financial calamities we see behind every corner, and perhaps turn a profit from the opportunities every crisis presents.
To demonstrate our goodwill, there are a few financial websites should you know about if you’re looking for less opinion and more data and information. We’re often asked what we read and where we get our data. As you know, we read the Australian Financial Review and The Australian each day. On the Internet, it’s Prudent Bear, Bloomberg, and for the state-of-the-world each morning, The Drudge Report.
What about finance? Surprisingly, Australia lags the rest of the English-speaking world in the number of useful investment websites with real-time data, archived semi-annual reports, and genuine, independent analysis. This changing…slowly…and of course it’s not greeted with open arms by the industries which have been benefited from being gatekeepers to information. But in the meantime, we suggest you take a look at Google News and Google Finance. There is more to the Google than just searching for things.
Google Finance, we predict, will soon be the most valuable research tool for individual investors on the Internet. Google is attempting something ambitious but useful, organizing the mass of data and news stories and blog posts about stocks into useful categories of actionable information. If you have recommendations of your own, please let us know at email@example.com
By the way, information itself is mostly useless. There is too much of it already on the Internet. To make it useful you first have to know what you’re looking for. That is, you have to begin your search with some first investment principles. This context (or orientation) prevents you from getting disoriented by the sheer volume of mostly-meaningless data available. What exactly do we mean? More on that below. But basically, if you don’t understand the strategic big picture first-how things work and what’s moving markets-the tactical exercise in finding the best investments to profit will not only be a waste of your time, it will cost you money.
Speaking of the big picture, our commodity analyst friend Steve Belmont recently sent a note to his clients, writing, “We thought we smelled a correction coming in gold and silver. We finally got it. Three weeks ago OE recommended exiting and taking profits half of our bullish positions in silver and gold. Despite our exit recommendation, we remained long term bullish. Now that the correction we were waiting for has arrived, we believe the time has come to re-establish bullish positions in both metals.
He continues, “The logic behind our bullish stance remains simple: 1) gold and silver appear to be in bull markets. 2) A simple definition of a bull market is one that makes new highs. 3) Gold and silver show a pronounced tendency to make their highs between the months of September and May. Consequently we believe that if their bull markets are still intact, then gold and silver should exceed their 2006 highs by May 2007.”
And what if they don’t? “If they don’t, then both metals will most likely no longer be in bull markets. They may not necessarily be in bear markets, but their bullish momentum will have been lost…Both gold and silver are bouncing smartly this morning, leading us to believe that the wicked correction in both markets may be near its end.”