Which is going to be the next Bear Factor?

Which is going to be the next Bear Factor?

The late 1980s bear market in the world Stock Markets were fuelled by the Gulf war and failure of East Asian Economies like Malaysia, Singapore, Hong Kong and etc. The bear market sustained till 1998.
The early 2000s bear market was fuelled by the dotcom bubble burst and also by the terrorist attack on WTC in USA. Then it terminated only on 2003.
The 2008 bear market was fuelled by real estate bubble, which impacted heavily the USA and also the World Economies. Since then it has pared some of it losses but still vulnerable for another bear attack.
If so, then which is going to be the biggest factor for the next bear market. May be it is real estate itself. As I believe the real impact of the real estate bubble is yet to be felt.
Another possible factor could be a Gold asset Bubble. Peaking Gold prices would lead to Bubble in days to come.
Let us wait and see…

Economy and Stock Markets

Economy and Stock Markets

Are Economic growth and Stock Markets are interrelated. Half of the economists will say ‘Yes’ and half of them will say ‘No’.
According to me it is ‘Yes’. Stock Markets and Economic growth are interrelated because the rise of Stock Markets would attract small investors into the Market which will propel the stock Markets further, which in turn fuel the start of new companies and projects, which in turn help grow Economy.
A rising Stock Market would invite retail Investors and Foreign Investors to invest in the Stock Markets through secondary Markets and also through Initial Public offerrings. This process will infuse huge amount of idle money into the system
The money that came for circulation would be used by the companies to expand, backwared integrate and forward integrate. Thus the production capacities of all companies increases, so they produce more end products.
These end products has to be sold and this will be done by exploring new Markets locally or internationly. Thus the earnings of the companies will increase, which in turn means increased tax for Governments.
Thus a rising stock Market will surely propel a Economic growth.

GLOBAL INDUSTRY DOWN TURN A BOON TO THE CHINESE AUTO INDUSTRIES!!!!!!!!!

GLOBAL INDUSTRY DOWN TURN A BOON TO THE CHINESE AUTO INDUSTRIES!!!!!!!!!

The global industry down turn is a double bonanza for the Chinese leading automobile industries. The fast growing Chinese industries are chasing western brands to utilize the steep global industrial down turn.
Beijing  Automotive Industry Holding(BASIC) is one of the largest auto maker in China.  Recently Beijing automotive industry holding acquired Saab unit a part of General Motors  as a part of developing its own cars. More over it will by the intellectual property for 9-5 and 9-3  sedans and other equipments for a huge  unspecified sum.

This deal will help in the new saap production , but the Saap people clearly informed that the deal will not affect the sale of Saab to others.

The Dutch sports and ;luxury car maker SKYPER is also holding talks with general motors for Saab. Not only SKYPER and BASIC  there are so many other automobile manufactures like GEELY automobile groups are running behind the western car manufactures to harvest the benefits of Global industry down turn.

Most of the Chinese Auto mobile industries are running behind VOLKSWAGEN, TOYOTA MOTORS for tie ups .

Acquiring some assets of GM by BASIC  us a boon to the Chinese  company. Though it is a fifth largest automobile maker in china,
It still does not have its own brand car. Hence, even though the Saab platform is old still it  can use it for manufacture its own cars in future. More over it will get support from Saab as it will use the acquired technology in production of its own cars.

THE DUBAI CRISIS!!

THE DUBAI CRISIS!!

The announcement of Dubai world seeking a stand still in debt servicing clearly indicates, that the Global financial crisis is not yet over.

 The economy of Dubai had relied on the massive borrowings. It build the economy mostly on trade,reality and tourism. Moreover Dubai invested largely in foreign assets such as Casinos luxury hotels. Ocean liners, properties  etc. Its economy is substantially financed by international borrowing.

In 2007   global financial melt down hit its growth, trade and tourism very hardly, resulting in entire collapse of commercial trade abandoned construction projects,unoccupied  commercial complexes, which lead the property prizes to tumbled down to its bottom.

At this juncture servicing the huge debts raised to create these assets became difficult. The Dubai world one of the government owned company owing nearly $60 billion to international banks asked for a  stand still as regards debt servicing from its borrowers for six months since late November.

Here it is very important to discuss how this same crisis was handled by both US and Dubai. In US the capitalistic country several private banks, including investment banks have been bailed out of with large dose of public or other wise  taxpayers money. But in Dubai the international lenders to the government owned entities have been left alone to handle the massive credit related problems. In Dubai government  entities are substantially in excess of the GDP of the country hence it considered a sovereign risk in the conventional sense of the term.

 The international banks which lend to Dubai world are in no financial position to take even a partial write down on these assets. It is now certain that the process of cleaning up bad debts and recapitalising them.

After the Dubai world travails, the international credit market unlikely to offer government owned corporates without  an explicit sovereign guarantee .

Which is the long term Investment bet? Deposits,Gold, Stocks or Real estate?

Which is the long term Investment bet? Deposits,Gold, Stocks or Real estate?
During the 20^th century, investments in the real estate showed steady returns. Sometimes the price rise is fast and sometimes it is slow. But the rate of return is some what better than the Fixed deposits and also above Gold. But is somewhat riskier than fixed deposits.
Likewise, Investments in the Gold also showed good returns and at times it is stagnant. It sometimes performed better than fixed deposits and at times it is under performed when compared to fixed deposits. But is riskier than fixed deposits.
Investments in the Stocks is the riskiest of these investments. But the returns were phenomenal during the Bull Market and it showed negative growth in bear markets. But on Average, it performed better than other investment avenues. But the risk factor is much more in Stocks.
My investment plan would be to invest 30% in Stocks, 30% in Real estate, 20% in deposits and 20% in Gold. Any investment plan should take into consideration atleast 5 years time frame. And the best way to invest is to invest at bear markets.