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Author: Alexander Gloy

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  • LIMTI – technical outlook – update 6/2011

    Alexander Gloy

    The LIMTI (Lighthouse Investment Management Timing Index) is supposed to give indications on when to buy or sell investments related to the S&P 500 index. It is made up of 10 individual indicators (for example put-call ratio, % of stocks in the S&P 500 index trading above their 50-day moving average etc). Each index is…

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  • Investment choices in a world of incompetent central bankers

    Alexander Gloy

    Much of the following next is an excerpt from the May 2011 “Letter to investors”. This is supposed to be”big-picture thinking” and will only be updated if warranted. 1. As the economy is artificially inflated so are company profits and stocks. The party might continue – until someone like Paul Volker gets installed at the Fed. It…

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  • Looking back: “We are buying Greek government bonds!”

    Alexander Gloy

    May 3, 2010. The EU and the IMF have just announced a EUR 110bn bail-out for Greece. Greek 10-year government bonds are yielding below 9%. German financial newspaper “Handelsblatt” launches a multi-page call to lure unsuspecting citizens into buying Greek government bonds. You can (and should) still read this master piece here. Gabor Steingart, editor-in-chief, opens…

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  • ETF: Beware of systemic risk

    Alexander Gloy

    This is a topic I should have paid more attention to earlier: systemic risk in ETFs (Exchange Traded Funds). Here are my thoughts in a few bullet points: ETFs are a great idea. They allow diversification at minimal cost to the investor (especially compared to mutual funds). Unfortunately, the financial  industry is in the process…

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  • Hungarian adventures in CHF: Laszlo wasn’t alone drinking CHF-laced Kool Aid

    Alexander Gloy

    In 2006 and 2007, more than 90% of new Hungarian mortgages were denominated in foreign currencies. Many foreign banks (KBC, Bayerische Landesbank, Erste Bank, Intesa Sanpaolo, Raiffeisen, Unicredit) were luring Hungarians with low interest rates. At the time, Hungarian mortgage rates were around 9%, while Euro-mortgages cost around 4.5%. But those cheapo Swissies were to…

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  • Greece: What I learned from a Vietnamese Rickshaw Driver

    Alexander Gloy

    Traveling through Vietnam provided a few valuable lessons for life. You arrive, armed only with a copy of the Lonely Planet. Any map turns out to be pretty useless, as street names are frequently changed or the street layout completely altered (this is mid-1990’s). You are being inundated with offers from “cyclo-” (bicycle rickshaw) drivers.…

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  • Is this a buying opportunity?

    Alexander Gloy

    The earthquake and nuclear situation in Japan has triggered a sell-off in the equity markets. Is this a buying opportunity? I say “no”. Two reasons: 1. The Japanese situation is likely to trigger many “unintended” consequences we cannot anticipate right now (for example a strong Yen will hurt profits of Japanese exporters, hence depress their…

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  • What a taifun in Vietnam taught me about the Euro crisis

    Alexander Gloy

    As I was traveling through Vietnam in the mid-nineties our bus drove through an area visited by a taifun. The road was running on a slightly elevated dam, so initially there was no obstacle to continue the journey. Looking out of the window there was water on both sides as far as the eye could…

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  • US house price decline accelerating

    Alexander Gloy

    US house prices have entered into an accelerating decline. The more I dig into the details the worse it gets. The most widely followed measure of US single family home price is the S&P Cash-Shiller Home Price Index (CS HPI). First a word on how it is calculated: “The S&P/Case-Shiller Home Price Indices are calculated…

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  • US house prices – Roll out the welcome mat for a double-dip

    Alexander Gloy

    by Alexander Gloy Let’s take a look at the situation after the October data from the Case-Shiller home price index has come in[1]: You see all major metropolitan areas peaking between March and May 2010 (the end of the first-time home-buyer tax credit). After only 8 months in positive territory, the overall index comprising 20…

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