Category Archives: Investments

OPEC cuts Oil Price target

Crude Oil prices are down 25% since their recent higher levels, and are currently at nearly 4 year low. Experienced energy analysts feel crude oil prices may remain low in the near term due to increasing US shale oil supply, but crude oil prices are likely to move up back to $100 per barrel.
One day after Saudi Arabia lowered prices in an attempt to hold market share in the USA, to compete with the cheaper shale oil in the United States market, the White House spokesman Josh Earnest said that the USA is monitoring the global oil demand-supply situation but has no comment on whether it might look at replenishing the Strategic Petroleum Reserve.
Meanwhile, Goldman Sachs analysts believe the crude oil surplus supply situation will remain till Q2, 2015. However, industry veterans believe crude will bounce back by Jan 2015, its just a matter of few weeks for the commodity to stabilize, and then the big short squeeze will play out, and we may see crude oil back at $100 per barrel by Jan-Feb 2015. Continue reading

VIX Products in High Demand by Investors

Volatility arbitrage though not new, has taken on a new dimension, as several new hedge funds have begun to deploy strategies involving VIX futures and options. We’ve seen the VIX universe continue to expand in surprising ways. For instance, a major investment group that principally trades energy and interest rate products, recently became a Trading Privileged Holder, or TPH at CFE. Other new users include European investors trading VIX products against fee stocks, a measure of volatility of the Euro Stocks 50. And banks in Brazil, now actively using VIX products for macro hedging. We also see increasing numbers of customers that sell implied volatility short, which has been an active topic in many trading forums. Its important to note we are still in the early stages of developing previously-identified customer segments globally, such as hedge funds, CTAs, proprietary trading firms and institutional investors. Many customers in these categories are early adopters meaning there is considerable room to further expand every category of VIX user. Quite simply, we believe investors of every type can potentially benefit from the added dimension of pure volatility provided by VIX futures and options, and that education is the key to unlocking that potential. – Ed Tilly CEO, CBOE (Q1’2014 Earnings Call, source: www.SeekingAlpha.com)

How to Study Stock Market Trends?

A very informative and insightful video by Ron Insana. He was able to see the real estate bubble building up during end of 2002, which was probably the early stages of the real estate bubbble, which peaked 5 year later by end of 2007, followed by crash in 2008. A stock market bubble is a type of economic bubble taking place in stock markets when market participants drive stock prices above their value in relation to some system of stock valuation. Continue reading

Business Valuation by Rand Gambrell

The value of a business depends on what the purpose of the valuation exercise is aimed for. Is it for raising new investment via minority share sale, or majority stake sale, or for bankruptcy? State/country specific laws also plays a role in valuation. Investors may still attach a positive value to a company undergoing bankruptcy proceedings, like in the case of United Airlines. Under what standard of valuation are we doing this valuation: Fair market value vs Investment value?