Wednesday, August 20, 2014

Risk Management:What Companies Must Know

Companies must understand threats before going into a market,said Chris Torrens,director of global risk analysis at Control Risks.It's just about mitigating against that risk.There's a clear security risk in many markets.The longer term risks may be less obvious to begin with.There's corruption and social risk of the need to work with local communities or face security risk.*
The challenge arises when you have unforseen events such as the crash of MH-17 in Ukraine or an ash cloud.We tend to be drawn to those areas where conflict occurs or is likely to occur.As a company,we focus on political,operational and security risk.Many companies are just used to the bad headlines.Different risks cause different problems for different companies.*
The risk environment feels at this moment to be around a 7.5 or an 8,but many of these are recurring,ongoing crises.Ukraine is a major worry,but it's about being prepared,Mr.Torrens explained.*
One example of a current European risk is the possibility that,if natural gas is shut off from Ukraine,Germany will run out of it in February.

Wednesday, August 13, 2014

What Investors Need Today

What you need is stable earners with big cash flow,advised Ashok Shah,investment director at London&Capital.Later,as QE approaches,you can take another look.*
I think the Russia/Ukraine situation is going to drag on for months to come.Until there is a definite economic impact,I think the market will look right through it.*
The bond market is saying the economic outlook,especially in Europe,is poor.We're already seeing Italy going back into recession in the second quarter.The underlying problem is deflationary pressures.That's going to restrain any recovery in the economic growth rate.I think we have to be used to very high levels of unemployment for long periods of time,until there is proper restructuring.I think the brain drain from the UK and Europe is going to continue for a long period of time,Mr.Shah predicted.*
The way we're going to quantify Russia and Iraq is,if you cut drilling in Iraq and Russia,you're going to cut drilling numbers for the oil service industry,CNBC host Jim Cramer noted.*
China is just not liking us at all with its antitrust policy.Look at Applied Materials.It's down 10-20% because of China.China's cracked down on Cisco.China's playing with us,dumping their steel.Who's spending in China? Amazon.Look out,PRC,Amazon's coming,Cramer warned.*

Wednesday, August 6, 2014

How To Position Yourself in Today's Environment

Every time there is a bad headline,there is a sudden collapse and then a quiet rebound,points out Nicola Marinelli,portfolio manager at Sturgeon Capital.The underlying trend is still quite strong,and I think it will continue the rest of the year.*
In 2015,Europe as a whole will disappoint in employment and growth.Geopolitical risk is a bit underpriced now.The Fed balance sheet has the potential to cause a technical crisis.If we think rates are going to go up,we are going to see a wave of redemptions in a market that is less structured to be liquid than years ago.*
Take profit on your positions that are liquid,and position yourself for next year in this better liquidity environment,Mr.Marinelli advised.*
To me,it looks very,very ominous,said military analyst Colonel Cedric Leighton,US Air Force Retired,former director of training at the National Security Agency.Russia is feeling itself like a cornered cat,trying to keep up the high level of public support within Russia.Putin knows that sanctions will potentially mitigate this support.
I think a Russian invasion of Eastern Ukraine is likely within the next two months.It might be a subtle invasion,but he will move in quickly,and move in by surprise,Colonel Leighton predicted.