Saturday, April 24, 2010

Commodities (Deutsche Bank) , Oil, World Cup, HDB business idea

Here are some stuff interesting stuff that I have experienced and read over the past few weeks.

1) I attended a talk by DBS on an insight to commodities. The presentation was however done by 2 bankers from Deutsche Bank. Somethings that I took home from there are.

  • At the talk, it was said that commodities have outperformed equities for the past 10 plus years, however I feel that the method of comparison is a little flawed. For one, they only compared the basic price of the commodity with that of the Dow Jones. However, we must always remember, when looking at equities, you must power of reinvesting dividends is actually huge!
  • The 'cost' price oil, which is also the fundamental support, is around USD 70 now.
  • LPG is undervalued.
  • Gold is overvalued, however other metals like palladium (used in car catalyst) will see a surge in price, as the automotive industries in emerging markets like India and China picks up.
2) Oil. This is somewhat related to what I will doing in the future, hence the current interest. Some interesting facts:
  • Lots of companies (private and non-private) are not trading any more oil with Iran This is because the US and their allies do not wish to have Iran benefiting economically, which will indirectly support their nuclear plans.
  • For oil trading, the best kind of environment is to have low oil prices and high volatility.This is because traders live on volatility and with low oil prices, it is cheaper to fund purchases. This means that in the crisis years of 2008/2009, some companies might actually be making a windfall, contrary to what most people believe.
3) I have been reading articles that predict that the stock market will be weak from around now to June/July. Why? Because the world cup is coming!And it has been proven for the past 5 or so world cups.

4) I have been looking at HDBs at the moment, both resale and the new Punggol Emerald and Punggol Waves. In the process I have though of a business ideas as many property websites are really un-user friendly. So I am looking for any person who is able to do programming and build a website, do drop me an email.