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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (56830)	2/4/2016 4:41:46 PM
From: Jurgis Bekepuris	Respond to of 78748

Et tu, Paule?

To: Paul Senior who wrote (56830)	2/4/2016 9:40:44 PM
From: Difco	Respond to of 78748

To further your yuan comment I found this article really fascinating: blogs.wsj.com

To: Paul Senior who wrote (56830)	2/4/2016 10:17:03 PM
From: Spekulatius	Read Replies (1) \| Respond to of 78748

One way to. Play the yuan devaluation would be to short the HK $. The HK$ is freely traded and can be shorted or option purchased, (I believe). The HK$ is pegged against the USD,but I think , if the yuan cracks the HK$ will crack as well. Probably a somewhat outlandish idea, but if it works, the payoff should be substantial.

To: Paul Senior who wrote (56830)	2/5/2016 12:14:10 PM
From: Graham Osborn	Read Replies (1) \| Respond to of 78748

OT: I guess what would concern me about specifically hedging the yuan is that is really a symptom of the international debt crisis as manifested in China. A yuan deval is just once way the unwinding of leverage could hurt US stocks, so your positions wouldn't be fully hedged if a deval comes later or less than expected. I should talk btw, my microcaps continue to get hammered and my hedges are still way out of the money so the effect is by no means symmetric. Which means I'm going to feel not so smart for a while (and maybe forever:)). If you want to hedge against delevering buying long-dated puts on the TQQQ might be an option. I hope to do so on the next rally. And of course cash is a hedge to some extent for FX specifically. Hope that helps answer your question.

To: Paul Senior who wrote (56830)	2/10/2016 3:43:04 AM
From: MNTNH	Read Replies (2) \| Respond to of 78748

The devaluation was China trying to lower its currency, as it was forced to appreciate (its pegged to a band to USD) which was rising rapidly. Their aim is in fact to have gradual appreciation and not overly fast in relation to its trade partners' currencies. Hence China spent over 15% of their reserve stemming capital outflows to support CNY. And of course, a lower currency would help boost its slowing domestic Chinese economy. So the key is whether USD will continue its climb which in some ways is related to [1] US rates and economy and [2] how other countries are doing. Yellen seems keen to continue the rate hikes while Fed is mixed. US economy is mixed but I supposed future rate hikes would be comfortable until people start feeling it (2%->3% versus 5-6% etc). The other countries to me is a huge crystal ball. I doubt it would have any immediate impact to US's decisions, more of a follow-up action (like capital outflow to US), like a cycle. So with that, the most immediate hedge would be CNY/CNH bets or HKD (trades at a fixed rate to USD too) like someone mentioned. However, for it to play out, there needs to be a USD rise of the same magnitude or more within that span of time. The first US rate hike had the surprise element which should wear out for subsequent hikes to end at +1% for end 2016. In essence, further CNY devaluation is limited but US could be the surprise element. Also, I think many guys put on that trade way earlier so premiums might be high atm. A proxy could be the same shorting of EM currencies but that poses an additional layer of risks given their diverse attributes and events. Imho, if you really have to hedge, focus on protecting against a US rising rate environment instead which is clean, most direct and least expected now. On the sides, I think hedging makes one feel powerful, too powerful sometimes and theres a high chance to do something silly, especially in this environment when theres less stuff to do. Right now it means i would not touch fixed and/or low yield stuff like Treasuries (although has been rising lately) or REITs. Again, just my 5 cents worth.

To: Paul Senior who wrote (56830)	2/26/2016 12:05:39 PM
From: Paul Senior	Respond to of 78748

OT fwiw: NTES. I'll add back a few shares after yesterday's price drop. Gross margins and profit margins were down per the q report. Apparently this and/or earnings number have disappointed, resulting in stock dropping. I see a company with very excellent profit margins still, increasing revenue, more cash than debt, -- an $18B Chinese market cap company that pays a small dividend, which is a positive for me as regards Chinese companies. Very positive here because company seems willing to share profits with investors: Under the Company's quarterly dividend policy announced on May 13, 2014, quarterly dividends will be set at an amount equivalent to approximately 25% of the Company's anticipated net income after tax in each fiscal quarter. The determination to make dividend distributions and the amount of such distributions in any particular quarter will be made at the discretion of the board of directors and will be based upon the Company's operations and earnings, cash flow, financial condition and other relevant factors. Fiscal 2015 eps is $7.86/sh. I look for the company to continue its sales growth and have continuing good profit margins. I'll guess the company to earn about $10/sh in 2016, and I expect the company will then trade at least at its 5-year average p/e multiple of 15, perhaps again closer to 20x. finance.yahoo.com