Oil Production limits are more of a gentleman’s agreement than anything

The oil price hit a six-year high on Tuesday, after discussions between the world’s biggest oil-producing nations and their allies – known as OPEC. OPEC+ first rolled out a host of production cuts during the pandemic in an effort to boost the oil price, and it met again last week to discuss finally dialing them back. But the talks were scuppered by a disagreement between Saudi Arabia – the group’s de facto leader – and the United Arab Emirates. Short of a change of heart, that means current production limits will stay in place for at least another month. That’s not ideal: this tiff … Continue reading Oil Production limits are more of a gentleman’s agreement than anything

The European Carbon Market

The European carbon market doesn’t pay any attention to spiking inflation or climbing interest rates, and its price – which has doubled in the last year – might only keep going up… What exactly is a carbon market? The best way to set a price that’s both high enough to incentivize polluters to cut their emissions and low enough to avoid sending whole industries into bankruptcy is the “cap and trade” system. Under the “cap and trade” system, the European Union (EU) allows firms in polluting industries to emit greenhouse gases, but only up to a set amount. The companies that … Continue reading The European Carbon Market

The World’s Going Renewable. So Why Are Renewable Energy Stocks Getting So Little Love?

Renewable energy stocks have fallen out of favor after a stellar rise last year, with the European Renewable Energy index down around 25% from its January peak. But several investment banks – from Goldman Sachs to Royal Bank of Canada – think the recent selloff could present you with the perfect entry point… Why are renewable energy stocks so attractive right now? 1) They’re cheap relative to their growth potential The selloff has left renewable energy stocks looking cheaper than tech-heavy growth stocks – not just in Europe, but globally. And unlike tech companies that benefited from a short-term, pandemic-driven demand boost, renewable energy companies will … Continue reading The World’s Going Renewable. So Why Are Renewable Energy Stocks Getting So Little Love?

How to pitch a stock?

Stick with industries you understand. 2. Qualitative approach: Look at the overall economy and choose a sector and industry that you think has particularly positive/negative cyclical or secular themes. Then try to choose the best/worst company in that industry. 3. Quantitative approach: Use arbitrary parameters to filter the overall universe of stocks (e.g. below average P/E, high revenue and earnings growth, high ROE). Yahoo! Finance and MSN Money both offer free stock screeners. 4. There are three basic parts to an effective stock pitch: story, numbers, and valuation. 5. When delivering your stock pitch, note that it should act as … Continue reading How to pitch a stock?

Private Equity Mania?

What’s Going On Here? Private equity firms have had their busiest-ever start to a year, inking more than $500 billion in deals around the world across the first half of 2021. Ultra-low interest rates have made private equity’s promise of solid returns more popular than ever – helping firms amass a mountain of investor cash. And since private equity deals almost always involve huge chunks of debt, low rates have also created the perfect environment for them to get busy buying. What is private equity? Traditional stock investments are in “public” companies: those listed on the stock market. But there’s a whole world out … Continue reading Private Equity Mania?

Study notes from ‘The New Trading for a Living’

2. Though poor trading may resemble gambling, good trading is nothing like it. The inability to resist the urge to bet is a sure sign that you’re an inveterate gambler.If you ever have the feeling that you need to trade or that you just can’t stop, you are gambling. Another sign is when single trade begin affecting you emotionally. If the stocks move in your favour, you feel happy and powerful, but if the trade moves against you, you feel crappy. Emotional trading causes you to gamble away your money is search of positive feelings. A professional trader doesn’t get … Continue reading Study notes from ‘The New Trading for a Living’

Study notes from ‘Common Stocks and Uncommon Profits’

5. When considering a company’s investment potential, you’ll want to collect detailed information about the company from every possible angle. Of course, you could easily track down a trader and ask her which companies she would recommend investing in. However, there’s no guarantee that she’ll give you accurate information, because traders have to protect their own interests. Instead, employ the scuttlebutt method: dig for information from every possible source. Contact vendors, customers, former employees and research scientists or executives in trade associations. As long as you ensure that you won’t make the information public or out your informant. Contacting a … Continue reading Study notes from ‘Common Stocks and Uncommon Profits’