Platinum Gold Ratio Just Breached 20 Year Low 0.78 Catalytic Demand Price South Africa Jewelry

The recent dive in platinum prices is forcing miners to turn to shallow, highly mechanized new mines.  "65% of South Africa’s platinum operations are unprofitable at current prices".  Making matters worse is the price of electricity - up threefold since 2008.  In 2014 South African platinum production dropped 10% to less than four million ounces - by comparison the country produced 4.8 million ounces in 2011.

But industry demand remains strong having eclipsed eight million ounces last year for just the second time in history, and with South Africa being home to 95% of global reserves, production issues in the country will swing supply/demand in the wrong direction in upcoming years.

platinum versus gold

Demand - platinum is more widely used industrially (catalytic/automotive as well as laboratory equipment)

Supply - depends more on recycling than any other metal - 2.1 vs 5.7 million ounces (total demand ~ 8M ounces per year).  But there are concerns over production - demand for platinum is known to fall during times of economic uncertainty which is more true today than at any other time in past fifty years.  Volkswagen diesel scandal is also weighing down prices - diesel vehicles may not be as popular in the future meaning less demand for catalytic converters - which account for 40% of platinum demand.

Just last month an HSBC metals analyst said he expects "platinum to trade above gold next year"  A discounted platinum price will boost jewelry demand allowing it to take market share away from gold.


Analysts see platinum at $1150 in 2016, $1300 in 2018.

Real Estate Investing Advice Buying Land Opportunities in Canada foreclosures discounted properties

Getting approved for a mortgage in Canada isn't as easy as it used to be.  There are a number of reasons for this

• lower incomes and less job security with the majority of new jobs being in self-employment 
• lending institutions playing it safe by choosing to sit on cash rather than lending it out
• new mortgage rules that require from prospective borrowers a 20% down payment
• shorter amortization period

this is forcing middle class buyers out of the market.

Let's take a look at some of the properties currently up for sale their advantages and risk exposure

Also to consider : the changing attitudes of young people 

the next generation is putting off marriage until well into their 30's; they're also moving to the city choosing to rent rather than buy, and even forgoing the option to take over the family home when their parents decide it's too big for them. 

This, in my opinion, has created an opportunity for smart investors - people who are able to pay for something with cash !

Buying with cash is impossible ? think again - there are a number of properties in Canada that can be had for under $20,000; so if you can buy a car you can invest in real estate - yes, even in Canada :)

Quebec Real Estate Market A Wise Buy

With problems in the oil (Alberta) and manufacturing (Ontario) sectors investors are shifting their focus to Canada's other major market : Quebec - where the population keeps growing (thanks to a thriving student population driven by what is arguably Canada best all around university McGill) real estate remains cheap - yes rental income is lower than than it is in Toronto and even Ottawa but high demand means very low vacancy rates.

Quebec City is proving to be a great option for investors
median income in Quebec City is growing at a healthy pace - since 2009 it has surpassed Halifax, Hamilton, Kitchener, Kingston, has kept pace with Sudbury and is now tied with Victoria.

Why Gold Will Outperform Silver During the Next Economic Crisis price ratio

In times of crises historically, precious metals have been the preferred store of wealth.  Even though silver does have intrinsic value; by being the best store of value a preference for gold inevitably develops - this is especially true if the crisis leads to massive inflation and the rise of radical groups both of which occurred in weimar Germany and tsarist Russia.

There are benefits to owning physical gold but if you're going to buy stocks consider these precious metal companies

Isis, Greece and the confiscation of wealth

As has happened in Cyprus, would've happened happened in Greece if the 2015 summer bailout didn't materialize and is happening in Iraq and other Isis strongholds, the confiscation of wealth makes portability important.  At 75 the current gold silver ratio gives gold the upper hand - being able to move your wealth more easily makes it less likely to be discovered and thus confiscated.

Hyperinflation

if the US dollar - which is by far the world's most relied upon currency - is ever forced to prove its value the way every other currency does (ie the money supply, possibility of insolvency/national debt levels) - rapid inflation the likes of which has never been seen in history definitely could happen.

US dollar losing precedence in international trade

- in 2006 127 countries called the United States their largest trading partner .. that number has since fallen to 76.  In just five years China displaced the US in 51 nations.

- When forming new economic partnerships with countries China is emphasizing the need to bypass the dollar.  Traditionally all trade is done first by converting into dollars, but China has developed new ways of avoiding this.

America's shaky relationship with Saudi Arabia as of late will affect the petro dollar 's unique status.

International trade by central banks

Greek Companies To Invest In national bank of greece nyse NBG OPAP rebound stocks

Greece securing new bailout money stabilizes an economy that was free falling for the better part of 2015.  That creates investment opportunities - at least until September 2016 when all of the current deals expire.

Greek bank stocks stand to benefit from recent developments. August 29 - Greece National Bank Shareholders Approve Recapitalization Plan;  August 11 - The New York Stock Exchange NYSE notified the bank that it must bring its market price back above $1.00 by February 2016.

National Bank of Greece has the most upside but don't ignore the risks
- in 2008 TT Hellenic Postbank aka Greek Postal Savings Bank was one of the world's 2000 largest companies - in 2013 it was forced into liquidation.

Motor Oil Hellas (FRA:MHZ)

- best performing Greek stock since 2012 (price: 3.80->9.0)
- since 2008 is the only 'new' Greece-based company added to the Forbes Global 2000 list.
- least risky of Greece's eight major companies (five are banks most of which were on the verge of collapsing on the eve of the last bailout deal).
- oil refineries stand to benefit from low oil prices (takes months if not years for gas pump prices to reflect lower oil price).  crack spread remains stable.

OPAP SA Greek Organization Football OTCMKTS:GOFPY

gaming stocks

- weathered the global financial collapse in 2007/2008 fairly well (ranked 1009 on the Forbes Global 2000 list in 2008 before eventually falling out).
- worst performing major Greek company stock since new bailout package announced (end of June price: 3.5 -> 4.5 August 14 -> 3.75 August 31)
- Greeks voted to stay in the EU - that benefits the tourism industry which OPAP business is tied to.

National Bank of Greece NYSE:NBG

guaranteed access to EU taxpayers money when facing collapse, bank bailout

yes, this is a very risky investment but the reward could be substantial.  The bank's market capitalization has been cut in half over the last 12 months ($4.2 billion -> $2.1 billion).  Despite ongoing financial problems in Greece, between 2010 to 2013 the stock price spent most of the time oscillating between $25 and $35;  It's now at 67 cents.
Keep in mind this has always been Greece's largest company - that takes away a bit of the risk since even in dire circumstances this is one of the first companies that the government will step in to support.  Consider it Greece's version of a bank that's too big to fail.

- revenue is about the same as Greece's #2 and #3 banks combined
- since 2008 Forbes has routinely called it Greece's top company
- despite new bailout money stock price continued to plummet - to me this is a result of a wait-and-see approach by investors; institutional ownership only 3%.
- End of August: new European Union rule tied to the new Greece deal gives greater economic flexibility to Greece allows it to tap into additional EU funds in order to bailout the most important banks - even going as far as to consider tapping into taxpayer funds from throughout the EU.

Another reason to expect a rebound in the stock price:
The NYSE requirement that ADS share prices of stocks listed at the exchange be above $1.00.  NYSE is threatening to delist the stock unless the company gets the price back up from $0.67 to to $1 (it has six months to do this - expiry date is February 11, 2016).

Israeli & Canadian Pharmaceutical Companies Leapfrog their way to the top Teva, Valeant VRX game changing drugs ms

Attention investors: take a long hard look at Teva Pharmaceutical Industries of Jerusalem and Valeant Pharmaceutricals of Montreal - you won't regret it !

Just last week nyse:TEVA paid $40.4 billion for Allergan's nyse:AGN generic drug business giving the world's largest generic drug maker an even bigger international presence (Allergan was/is present in more than 100 countries).

This also gives them more leverage because more revenue spreads fixed costs over more units of output - which is important in the business of low margin generic drugs.

Though ms drug Copaxone faces increased competition from Novartis and Momenta among others, their proprietary brand continues to grow (last quarter both in terms of sales +12% = 50% of company profit and about a fifth of company revenue) and share of the market for MS prescriptions (31%) - thanks in part to more innovative ways of introducing the drug to patients (3X a week 40mg version vs 6X by competing brands).  And don't forget about the over-the-counter products - Teva has hugely benefited from key partnerships with companies like Proctor and Gamble and even Canada's Life brand (Shoppers Drug Mart).  For instance in Canada products include sea salt for baths.

Another overlooked aspect of the company - it is deeply rooted in Israel and has strong connections with Israeli universities - this is key since these institutions are credited with having developed important drugs such as Copaxone and Azilect.

Financials - Teva was doing well even before taking into considering recent acquisitions - in GAAP terms operating income and net income more than doubled last year despite revenue being stable.  All major metrics have been stable since 2010 with non GAAP earnings per share up steadily : 4.54 in 2010, 4.97 in 2011, 5.01 in 2013 to 5.14 in 2014.

Teva - making Israel proud : The deal for Allergan is the biggest in Israel's corporate history !

Valeant Pharmaceuticals nyse: VRX - merging its way to the top one company at a time - acquiring game changing drugs

According to CEO Mike Pearson, Valeant remains focused on medium sized acquisitions - this, despite the fact that the more recent deals have been game changing (Salix Pharmaceuticals ltd for $10.1 billion) and the tug-of-war for control of privately held botox maker Allergan plc.

July 2015 - Just this month Valeant took control of one of Egypt's leading drugmakers Amoun Pharmaceutical by taking over parent company Mercury Holdings ($800 million deal).

Oil Production USA Beats Russia, Greece Grexit Empowers China sea port Cosco 600428

The USA recently became the largest oil producer in the world, just barely nudging Russia out of first place at just under 10 million barrels per day - a 1.6 million bpd gain versus the previous year making it three consecutive years of 1m+ bpd annual growth in output.  Demand for oil from developed nations was down marginally by -1.2% but up elsewhere including China which experienced a 390 thousand bpd increase yoy.
USA gaining energy independence ! America now produces 90% of the energy it consumes.  Energy imports as percent of GDP : 1% vs 3% in 2007.

Consequences of a Greece Grexit from Eurozone

When Greece leaves the Eurozone any debt commitments it has to Eurozone entities will undoubtedly be scrapped and Europe will lose some €250 billion as Greece will for the first time have the green light to default.  Germany's state owned KfW bank (aka Bankengruppe) will lose €15 billion, France's BNP Paribas (BNPQY) €700 million while Germany's Commerzbank (CRZBY), Deutsche Bank (DB) combine for €700 million.  Credit Agricole (CA) remains heavily exposed with €3.5 billion euros owed to it by Greece.  Societe Generale (SCGLY) is owed €300 million all corporate debt - that's down significantly from €3 billion just five years ago.
In total €24 billion of the debt is held by German banks, with another €18.8 billion owing to private individuals and state institutions.
The aid plan initially called for €270 billion to be provided to Greece - the money has been coming from the IMF, ECB and the European Commission's 19 Eurozone governments.
According to the payment schedule Greece's next payment to the ECB is to be made on July 20, 2015 in the amount of €3.9 billion

Russia, China stand to gain a significant edge in their battle with the West for strategic control of the sea
(chinese navy, china sea ports, greece china)

1. The Greek Merchant Navy controls 16.2% of the total merchant fleet worldwide. Greece ranks first in tankers and bulk carriers.  Any deal for new funding from Russia or China's development bank would undoubtedly involve ports, vessels, and strategic sea routes.
2. Chinese shipping company Cosco Shipping Company Ltd (SHA:600428) already controls 2 of 3 shipping terminals at Greece's main port of Piraeus.
   since Cosco took control of the port in 2007 (for €500 million) business has tripled - this directly benefits Athens, the country's economic center.
3. Greek prime minister recently met with Putin in Russia where he was rumored to have sought out a new Russia Greece deal .  Russia has already secured new bases in Cyprus - bases in Greece which is home to Europe's largest sea ports and naval bases would obviously be in Russias interest.  When Greece votes to exit the Eurozone it will only be a matter of time until the country embraces a new currency.  This will have to result in closer ties with China since the IMF and ECB have already ruled out any future financial support to Greece.

Worldwide Food is Becoming More Expensive

Food prices in Turkey are now 20% higher than the world average - food prices in Nigeria are twice as high this year as compared to last year.  In the United States poultry, eggs, and vegetable staples such as cauliflower have gone up in price - being nudged higher by the two year drought in California and the bird flu epidemic.

 

Australia Gold Production at 11 Year High

Last year production totaled 284 tonnes +4% versus the previous year.  Companies are adjusting to lower metal prices by increasing the grade of ore mined.