|Is It A Bullish Case For 2014?
Gross domestic product (GDP) is the market value of all goods and services produced in an economy. This is a nominal value — it must be corrected for inflation to give us “real” GDP. It’s the real growth of GDP that we are interested in as investors. While there are always sectoral and company-level growth differences, it is the outlook for real GDP growth that will give us a “rising tide” or a “falling tide”… and gives us a view of the current economic environment.
We believe this view is of critical importance for investors. Many investors waited out some or all of 2013 on the sidelines and failed to benefit from the market’s gains. Although we don’t expect a ride without bumps in 2014.
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Are Chinese IPOs A Good Investment?
In October 2012, the discovery of considerable fraud and misconduct in newly public Chinese companies prompted the central government to shut down the mainland’s IPO market. With new a new regulatory framework in place — part of the raft of reforms put out by Party leaders last year — that freeze will soon thaw.
Almost 800 companies have applied to be newly listed on the Shanghai and Shenzhen stock markets. Analysts expect the first slate of offerings primarily to include large state-owned enterprises. We expect these will be very high quality offerings in terms of the risk of corruption.
What will be the effects on the markets?
Chinese Shadow-Banking Profits on Government Credit Lockout
We have commented before on the inefficiencies of China’s banking system, in which the lion’s share of credit available from official, state-run banks is made available to relatively inefficient state-owned enterprises — while smaller private firms with more growth potential are starved of credit….
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We hope you have found our weekly global market commentary useful in keeping you informed about the global macro landscape and navigating the complexity of the financial markets.
Guild Investment Management has been managing the wealth of many affluent investors since 1971.
In 2014, we expect many events and developments that U.S. investors need to consider. Do you have a seasoned investment advisor able to position your portfolio for any opportunities or to employ a defensive strategy in case of a significant market correction?
To learn more about Guild Investment Management and the services we can offer you, please visit http://www.guildinvestment.com/our-services/ or contact us at (310) 826-8600 and schedule a complimentary portfolio analysis and review.
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Track our analysis in these letters at www.gbni.info.
Thus far in 2014 has been the year of volatility, but is there an opportunity in the markets? What markets are poised to do well? Will gold rally this year? We have an update to our recommendation. Get the analysis and information you need for 2014.
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