H S B C: Buy Egyptian Stocks

[Realistbear]

http://uk.finance.yahoo.com/news/HSBC-sees-Egyptian-stocks-reuters_molt-873850515.html?x=0

HSBC sees Egyptian stocks as cheap, moves overweight

15:55, Tuesday 1 February 2011

LONDON (Reuters) - Investment bank HSBC (LSE: HSBA.L - news) said on Tuesday that recent developments in Egypt had been "constructive" enough for it to view Egyptian stocks as attractively priced and to move them to overweight.

Buy buy buy!!

They are saying that, in their view, the rats* are not an issue and it will soon pass. Maybe its another pump and dump!

___________________

* riots

Edited February 1, 2011 by Realistbear

[Deckard]

Overweight Egyptians?

mmmm.... no thank you

[R K]

Don't do it. It's a pyramid scheme.

I predict a riot.

[Realistbear]

If the stocks then go pearshaped they will end up in denile

That will be my coat on that rack............................

[R K]

If the stocks then go pearshaped they will end up in denile

That will be my coat on that rack............................

I've always pictured you in a camel coat RB.

[Realistbear]

I've always pictured you in a camel coat RB.

Aber Crombie?

No thanks, I prefer a Burberry.

Coat please...........................

[Realistbear]

Don't take the hump RB.

Yus, and if you buy the stocks and they dump you will be up the Nile river without a paddle and it will be a FAIR ROW back to land again.

Boom-tish! *

*

[Kazuya]

You are all in De Nile!

[gingertips]

SERIOUSLY - do NOT follow suit with HSBC here...if it all goes tits up then they will get tax payers money to recoup their losses - you will simply get shafted

[19 year mortgage 8itch]

Don't do it. It's a pyramid scheme.

And built on sand, at that.

[Superted187]

Red Sky at night? Cairo's alight!

[winkie]

[19 year mortgage 8itch]

SERIOUSLY - do NOT follow suit with HSBC here...if it all goes tits up then they will get tax payers money to recoup their losses - you will simply get shafted

Surely they'll cotton on to that?

[Guest_ringledman_*]

The responses to this thread just goes to show how joe bloggs always gets his stock timinng completely wrong.

Just to let you boys know:

Value increase as a stock or market falls in price.

Risk increases as a stock or market rises in price.

Hard concept to grasp for you Im sure, but that's why 90% of investors like to be sheep and buy after everyone else has (dot com 2000 anyone?).

'Buy when there is blood on the street' as the legend John Templeton said.

The same with BP. The ubers on here came on knocking it at 300p. You've all gone quiet on this now.....

Edited February 1, 2011 by ringledman

[nohpc]

The responses to this thread just goes to show how joe bloggs always gets his stock timinng completely wrong.

Just to let you boys know:

Value increase as a stock or market falls in price.

Risk increases as a stock or market rises in price.

Hard concept to grasp for you Im sure, but that's why 90% of investors like to be sheep and buy after everyone else has (dot com 2000 anyone?).

'Buy when there is blood on the street' as the legend John Templeton said.

The same with BP. The ubers on here came on knocking it at 300p. You've all gone quiet on this now.....

Everybody is contrarian now though and that's the problem.

The contrarion in me wanted to buy egyptian stocks so I looked into how I could do this.

I found the EGPT Ishares egypt ETF which has already bounced 20% from it's recent bottom and is now trading at a 12% premium to it's NAV.

So where does the contrarion go from here? Nothing is contrarion at the moment. Every investment seems to have bulls waiting in the sidelines waiting to pile in on drops and they are always a bit quicker than me and I don't need much time to think things through.

[Guest_ringledman_*]

Everybody is contrarian now though and that's the problem.

The contrarion in me wanted to buy egyptian stocks so I looked into how I could do this.

I found the EGPT Ishares egypt ETF which has already bounced 20% from it's recent bottom and is now trading at a 12% premium to it's NAV.

So where does the contrarion go from here? Nothing is contrarion at the moment. Every investment seems to have bulls waiting in the sidelines waiting to pile in on drops and they are always a bit quicker than me and I don't need much time to think things through.

I am not saying buy Egyptian stocks, just don't go with the uber view that every asset class in the world will fall to zero except for the amazing cash and bonds which keep their value in uber's eyes (they cant work out the difference between nominal and real value and the devistating power of inflation on paper 'assets' ).

The only asset class I see that is contrarian is Japan.

Ugly, unloved, underowned and undervalued. Its the only thing I am buying at present.

Investment houses have moved out of the country. Funds have shut down. No one talks about the country. Lovely.

Edited February 1, 2011 by ringledman

[AvidFan]

Don't do it. It's a pyramid scheme.

On the subject of their stock market - I was talking to this Giza - reckons its plateaued.

Sorry everyone

[OnlyMe]

On the subject of their stock market - I was talking to this Giza - reckons its plateaued.

Sorry everyone

Tut tut,

[Realistbear]

Mubbers is in denial.*

* :angry:

[AvidFan]

No, seriously... beware the curse of the pharaoh - it's worse than the Hindenburg Omen:

Edited February 2, 2011 by AvidFan

[R K]

I am not saying buy Egyptian stocks, just don't go with the uber view that every asset class in the world will fall to zero except for the amazing cash and bonds which keep their value in uber's eyes (they cant work out the difference between nominal and real value and the devistating power of inflation on paper 'assets' ).

The only asset class I see that is contrarian is Japan.

Ugly, unloved, underowned and undervalued. Its the only thing I am buying at present.

Investment houses have moved out of the country. Funds have shut down. No one talks about the country. Lovely.

You may (or not) be interested in this research into the relaltive 'protection' offered against inflation by the major asset classes. Equities don't perform as you keep insisting so adamantly they do (in real terms). Hat tip to Hotairmail for the link.

Note the performance of 'cash' versus equities in real terms.

http://www.bondvigilantes.co.uk/blog/2011/02/01/1296576900000.html

Blog article here on reasons not to grasp the egypt ETF 'opportunity'.

http://tradersnarrat...y-best-avoided/

Edited February 2, 2011 by Red Karma

[Guest_ringledman_*]

What planet are you bond and cash lovers living on?

The fact that bonds have outperformed equities over the last 20 years is simply down to the worst equity bear market in history coupled with a low inflation environment that imported deflation form China.

There is no doubt that for anyone investing in 1999 or 2000 then bonds or cash would be the place to be.

However extrapolate the last decade as the likely outcourse for the next decade or two at your peril. What happened over the last 10-20 years is likely the exact opposite of what will happen over the next 10-20 years.

All asset clases move in long 15-25 year SECULAR cycles with opposing short term noise cycles to confuse the masses.

The current bond SECULAR cycle bull started in the early 80s and is now near exhaustion. We are now at the blow out top, the point at which every joe public loves the asset class that is currently in vouge. There is a universal love of such asset class at such points.

There is a belief amongst the masses that the price can rises forever. That the yield can fall further. That there is a new paradigm. That the long term average is now dead. Mean reversion is an unkown concept to such 'investors'.

Take the stock bubble in 2000.

Take the property bubble in 2007.

Take the bond bubble in 2011.

We are here now. Why -

1) Inflows into bond funds now far outstrip the current outflows of equity funds. This is a polar opposite of 2000 when equity inflows far outstripped bond fund outflows.

http://www.tradersnarrative.com/wp-content/uploads/2010/05/ICI%20US%20bond%20equity%20mutual%20fund%20flows%20May%202010%20partial.png

2) Bond Yields hit 15%+ in the early 80s. They bottomed at 2% in late 2008 / early 2009. They have since made a classic double bottom from a technical point of view. Its all uphill from here for bond yield and inversely downhill for bond prices.

3) Pension funds are piling into bonds.

As for cash, great over a year or two but not a long term asset to own, except 6 months reserve salary. Over the longer term cash is trash especially in a negative interest rate decade that we now face.

Western governments will do anything in their power to punish savers and investors over the next decade through the silent inflationary theft. There will be only two places to beat them - commodites and stocks.

To say that bonds offer a better long term inflationary protection than equities is pie in the sky and judging by the website and authors of that report it is clear why they say it. They have based their analysis on the last 20 years. A time in which bonds went on a multi decade bull run, stocks collapsed and entered a secular bear.

These are exact reasons to bet against the recent pass and use long term emperical evidence to your advantage, in which it is proven that all asset classes mean revert. Secular bulls follow secular bears and vice versa. The typical period for each is 15-25 year bull followed by 10-15 year bear.

Bonds and cash are at the end of their bull. Mean reversion will collapse their value over the next few decades.

Equities are a decade into their secular bear. Their is more mean reversion to come for some growth stocks on high multiples but you could pick up defensives on 6-8 times earnings and yielding twice the gilt rate at the market low in 2009. Classic bottom of the market ratios. It is all uphill from now on for these mega cap defensives.

Commodities are 1/3 to 1/2 way through their secular bull market. This will be the big story for the forseeable future. Highly volotile but 10-20% allocation is what I like.

Wake up to the future. For anyone saving over the next decade then stocks and commodities are the main place to be (with a small element of cash/bond diversification).

Long term bonds get a whipping-

http://www.investorsfriend.com/SBBI%20rolling%2030%2055%202008.png

http://monevator.com/2010/03/10/uk-historical-asset-class-returns/

Edited February 2, 2011 by ringledman

[R K]

What planet are you bond and cash lovers living on?

The fact that bonds have outperformed equities over the last 20 years is simply down to the worst equity bear market in history coupled with a low inflation environment that imported deflation form China.

There is no doubt that for anyone investing in 1999 or 2000 then bonds or cash would be the place to be.

However extrapolate the last decade as the likely outcourse for the next decade or two at your peril. What happened over the last 10-20 years is likely the exact opposite of what will happen over the next 10-20 years.

All asset clases move in long 15-25 year SECULAR cycles with opposing short term noise cycles to confuse the masses.

The current bond SECULAR cycle bull started in the early 80s and is now near exhaustion. We are now at the blow out top, the point at which every joe public loves the asset class that is currently in vouge. There is a universal love of such asset class at such points.

There is a belief amongst the masses that the price can rises forever. That the yield can fall further. That there is a new paradigm. That the long term average is now dead. Mean reversion is an unkown concept to such 'investors'.

Take the stock bubble in 2000.

Take the property bubble in 2007.

Take the bond bubble in 2011.

We are here now. Why -

1) Inflows into bond funds now far outstrip the current outflows of equity funds. This is a polar opposite of 2000 when equity inflows far outstripped bond fund outflows.

http://www.tradersna...0%20partial.png

2) Bond Yields hit 15%+ in the early 80s. They bottomed at 2% in late 2008 / early 2009. They have since made a classic double bottom from a technical point of view. Its all uphill from here for bond yield and inversely downhill for bond prices.

3) Pension funds are piling into bonds.

As for cash, great over a year or two but not a long term asset to own, except 6 months reserve salary. Over the longer term cash is trash especially in a negative interest rate decade that we now face.

Western governments will do anything in their power to punish savers and investors over the next decade through the silent inflationary theft. There will be only two places to beat them - commodites and stocks.

To say that bonds offer a better long term inflationary protection than equities is pie in the sky and judging by the website and authors of that report it is clear why they say it. They have based their analysis on the last 20 years. A time in which bonds went on a multi decade bull run, stocks collapsed and entered a secular bear.

These are exact reasons to bet against the recent pass and use long term emperical evidence to your advantage, in which it is proven that all asset classes mean revert. Secular bulls follow secular bears and vice versa. The typical period for each is 15-25 year bull followed by 10-15 year bear.

Bonds and cash are at the end of their bull. Mean reversion will collapse their value over the next few decades.

Equities are a decade into their secular bear. Their is more mean reversion to come for some growth stocks on high multiples but you could pick up defensives on 6-8 times earnings and yielding twice the gilt rate at the market low in 2009. Classic bottom of the market ratios. It is all uphill from now on for these mega cap defensives.

Commodities are 1/3 to 1/2 way through their secular bull market. This will be the big story for the forseeable future. Highly volotile but 10-20% allocation is what I like.

Wake up to the future. For anyone saving over the next decade then stocks and commodities are the main place to be (with a small element of cash/bond diversification).

Long term bonds get a whipping-

http://www.investors...2055%202008.png

http://monevator.com...-class-returns/

Fill yer boots, get rich.

[Guest_ringledman_*]

A wonderful passionate post there!

Gold your take on it please, Sir.

Hi bulltrader.

Gold like all commodities bottomed in price between 1999-2001.

It is worth noting that commodities at this point were at their cheapest on an inflation adjusted basis for a 100 years in the main, or certainly the cheapest since the great depression.

So when people say gold is a bubble because it has risen 5 times since its low in 2000 they don't really understand just how cheap commodities were in 2000 and exactly how many times an asset class can multiply before it reaches its bubble peak.

In 2000 commodities were universally hated to the core. No one was interested. Likewise commodites go on 15-25 year up cycles so I think we have 5-15 years left on this upcycle.

In terms of gold, it is still below its inflation adjusted peak of $2,500 from the last blow out. I think it has probably another $1,000 to go, perhaps $2,000.

I will be getting nervous at around $2,000 and probably sell up. The thing it will do is go parabolic on its top out. The last blow out phase lasted 9 weeks I think. You will have to time it exceptionally well to get out high. Watch the 200 day moving average and when it is 50% above then its heading into bubble territory.

Who knows how high gold eventually goes. I have no faith in US politicians to do the right thing but whether gold hits $5,000-$10,000 is hard to say. I think $2,000-$3,000 max but who knows.

Short term gold has further to fall I think, perhaps another $100-$250 off. Likely to fall to its 200d ma or somewhat below.

Medium term its going up.

Edited February 6, 2011 by ringledman

[nohpc]

Fill yer boots, get rich.

Better to die trying than living a life of banal normalcy.

Even if I lose everything I own now my life would not change much so why not try and get rich?