Dear rss free blog,
Norway’s central bank (CB) again
raised rates to 1.75% but the assumption now is that another rate hike will not
occur until March 2010. The main reason was concern over housing inflation
producing a bubble.
Meanwhile over in China, a central bank survey early in this
quarter found that 67% of respondents who live in China think property has become too
expensive. And 47% of them complain that consumer prices have become too high.
Comments an observer with long-term
investing experience there: “the guys that runt he place are highly motivated
that wealth trickle down to the 800 mn Chinese who do not live near the coast.”
These ‘freshwater Chinese’ who own
television sets can see how Chinese near the ocean live. They want the same but
cannot afford it.
Jim Chanos, of Kynikos Fund,
the well-known contrarian, gave a CNBC interview in which he expressed doubt
about Chinese growth and told the world he was shorting materials whose prices
Chinese imports were supposed to boost.
I am not joining Chanos. I think our
observer is closer to the truth; the Beijing
oligarchs want to keep Chinese happy and will continue to build and import.
Another contrarian, Prof. Nouriel Roubini,
has put out a tirade against belated gold purchases by central banks in China, Russia,
and India.
For the record, when the CBs began buying
in earnest 11 years ago, the price of the yellow metal started falling. The
same think happened in 1980 when gold had its prior peak.
The difference this time is that there is a
potential risk of inflation which makes gold attractive.
China
keeps coming up and readers are advised that our new China study is available for
purchase at www.global-investing.com whether or not you have subscribed to the
newsletter.
More for full subscribers to the newsletter
follows:
Citywire A-rated
equity investor Leigh Harrison has selected ten stocks which he believes
will do particularly well next year.
While he warned he expects the UK economy to
face a testing time in 2010, he expects markets – which have rallied by more
than 50% from lows – to continue to trend upward over the next 12 months.
Each has cash-generative qualities which he
thinks will become more valuable this coming year.
He also identified a number of stocks which
have had a tough time in 2009, but which should enjoy a better 2010 after the
businesses were overhauled.
He notes that an extreme policy reaction
has fuelled the recovery of some businesses – such as banks – this year, but
with no such action expected in 2010, he said investors’ focus would shift
elsewhere.
Harrison, who runs the , said: ‘Cyclicals have done well,
but there shouldn’t be any more stimulus next year.
‘So next year the real hard slog begins and
the winners will change.’
To the best of my knowledge Harrison is not a
subscriber but three of his top ten are stocks we recommend too. Note that I do
not recommend tobacco shares on ethical grounds. So that means three of his top
7 ideas are also mine.
Here is what he told Nicholas Pater of
Citywire, in an article passed on by Canadian reader Maurice.
