Virtual Trading and the Global Economy

We have seen the rise of the virtual world in the twenty first century, which is a world that exists entirely on the internet. The currency that is used  is known as bitcoin, but it does not possess any physical form. Bitcoin has now become a widely used currency, especially in China, the economic powerhouse. However, the lack of physical form makes bitcoin completely different to what money should be.

A long time ago, the value of money was exactly what it was made of. Gold coins were made, and their value depended on the amount of gold in circulation. Nowadays, most money is printed on paper, which does not have that much value. Therefore, the government can print as much money as it wants as long as it has the cheap materials needed to print the money.

Bitcoin is the next step in this worrying trend regarding the creation money. Bitcoins have no physical form, and they cost almost nothing to create. However, using bitcoin is very convenient as online transactions can be carried out  using a currency which is suitable for  expediting simple financial transactions.

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Boeing share price soaring, but turbulence lies ahead

Boeing’s (BA) share price has risen an impressive 66% compared to this time last year, boosted by enthusiasm in the airline and defence markets. Increased travelling has had a positive effect on airline traffic, while rising international tensions have prompted countries to increase spending on defence.

But there is turbulence ahead for Boeing in the shape of increased competition in its biggest operating segment, airline business, which has yielded $65 billion of the company’s $95 billion total revenue over the last two years.

While this is unlikely to send Boeing’s share price into a tailspin, it might be expected to move sideways for the foreseeable future.

Airbus, Boeing’s main rival in the airline business, have traditionally made bigger planes and hadn’t been able to benefit from the recent downsizing trend in the airline industry and increased demand for smaller, more fuel-efficient planes.

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Patience may pay off for General Electric traders

Many analysts expect General Electric (GE) to exceed their profit expectations when they post their third quarter earnings report on October 20, as it has done in eight of the last nine quarters. However, there is also a high expectation that its share price will fall as it has done for the past seven quarters after earnings results are released.

Fears over a dividend cut have eased since last week – which would have led to an investor exodus and a serious drop in share value – but there still seems to be a lot of work to do for recently appointed CEO John Flannery who is overseeing restructuring and reorganising efforts.

“A dividend cut could crush the stock as retail investors flee, but maintaining it gives GE little or no excess cash to grow,” Jeffrey Sprague, an analyst at Vertical Research Partners, said last week. “GE has continued to shrink the company but it has not proportionally shrunk the dividend.”

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Buckle up the Tesla ride is going to be bumpy

This looks like the time for traders to bet against Tesla (TSLA) shares in the short term as the market reacts to reports that Model 3 electric vehicle (EV) deliveries are going to be delayed with news stories about escalating production costs, production line issues and lay-offs throwing doubt on the company’s ability to turn a significant profit on its new model.



The chart above shows that after steep rise of 68% throughout the year the share price is showing signs of volatility.

Barclays were among the first to advise their clients to short Tesla with their analyst Brian Johnson suggesting a $210 price target – well below the $340 consensus on Wall Street.

Barclays feel Tesla’s November 19 announcement about truck production will be decisive in swaying investor confidence in the company.

Tesla are projecting production targets of several million per year in the near future as well as significant progress in other business opportunities like battery storage.

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Traders cashing in on PayPal success

In his note to clients Faucette noted that the market may have been overly concerned about a potentially negative impact of renegotiation of its contract with eBay, and that PayPal is maintaining its massive acceptance as an e-commerce website over other digital wallets and that it is expected to benefit significantly from e-commerce tailwinds.

It looks like a great time for traders to start getting friendly with PayPal (PYPL) shares after Morgan Stanley’s James Faucette upped his price target to 76 from 62 along with a number of other analysts who are equally enthusiastic about the online payment service provider.



The above chart plots the increase in share value which has grown steadily from the beginning the year, and which is expected to continue after the third quarter earnings report is released.

In his note to clients Faucette noted that the market may have been overly concerned about a potentially negative impact of renegotiation of its contract with eBay, and that PayPal is maintaining its massive acceptance as an e-commerce website over other digital wallets and that it is expected to benefit significantly from e-commerce tailwinds.

What PayPal has over its competitors is consumer trust. It feels like it has been around for a long time, and that’s a priceless commodity in the e-commerce age.

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Did the markets miss what happened in Vegas?

It’s the morning after the Vegas shooting. Over 50 innocent lives lost in another act of random violence that has shocked every decent person to their core.

Everyone except the markets, it seems, despite it being the deadliest shooting in modern US history.

Predictably, gun stocks have soared while the value of MGM shares (the company that own the hotel chain that was the scene of the massacre) have plummeted.

But for Wall Street and the other markets it’s almost like it never happened.

But imagine yourself, if you can, in America’s playground today. What would you be doing?

How many people are out and about enjoying what makes Vegas what it is?

How many have decided to end their visit early and go home?

How many others have decided to cancel their trip to Sin City?

How much money that would have been spent in Vegas today and in the coming weeks is going to stay at home. Probably billions, but that disturbance to the economy is being treated like a scraped knee.

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How to choose technology and industrial stocks

The common denominator for everyone who invests in stocks is to make predictions on the price evolution in order to capitalise on market movements and consequently make money.  But how they go about it is dependent on how risk averse they are, and the time frame over which they want to realise profits.

Investing in the stock market is both an intellectual challenge and a reflection of your own character. Before you decide which stocks to pick you need to understand what kind of investor you are.

Growth investors tend to focus on a company’s potential for future profits, and whose earnings are rising the fastest. Since growth-oriented investors are interested in big future earnings, they are often willing to pay a high price for a stock relative to what it earns right now. The metric used to value stocks here is the price-to-earnings ratio (commonly referred to as the P/E).

Value investors hone in on the current value of a company’s assets (factoring in its debts), and look for stocks that are cheap compared to those assets. Optimistic forecasts for profits are less important for them so they end up buying stocks with lower P/E ratios.

Taking the value approach sounds like a more conservative approach, but there is the risk that these stocks go out of style for long periods of time.

What may have initially looked like a bargain may turn out to a bad investment which other investors avoided because they identified serious problems with the business.

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