Money Morning Archive April 2010

All investors make mistakes. The trick is to avoid making the same one twice. Behavioural economist James Montier has flagged up some of the most common ways in which investors sabotage themselves in his latest book, The Little Book of Behavioral Investing. Here are five of his tips...

A short message after a long day... Anything happen while we were away? Not that we can see. We checked the news reports yesterday afternoon, after we drove in to Salta.

Are there dark clouds on the investment horizon? Shares in international airlines stuttered last week as volcanic ash swept over continental Europe, halting flights in dozens of countries, and stranding tourists at airport terminals around the globe. Analysts say the Icelandic volcano will dent British Airways’ revenue by some £20m per day. The financial fallout from the eruption could run into hundreds of millions of pounds...

“In a typical stock market cycle the big businesses bounce back first and the quality small and medium cap companies follow,” says Marc Ashton in this week’s Finweek. But it’s often a daunting task to pick from the myriad small- and mid-sized companies that seldom make it to the front pages.

“In a typical stock market cycle the big businesses bounce back first and the quality small and medium cap companies follow,” says Marc Ashton in this week’s Finweek. But it’s often a daunting task to pick from the myriad small- and mid-sized companies that seldom make it to the front pages. You probably wouldn’t even have heard of most of them. But that’s why it’s handy to have someone like Anthony Sedgwick in your corner.

PCs are making a big comeback in the States. Most of the country's businesses are still struggling to make headway on the sales growth front. But America's personal computer manufacturers look like they're about to hit the jackpot. What's more, several of the country's technology companies are in the same boat. And better yet for investors, unlike much of the rest of the US stock market, there's still good value to be found in the tech sector. Here's how to make money from it...

If you shine a light on a cluster of cockroaches, they scatter and hide. But when you shine a light on a cluster of investment banking con men, they simply stare back and reply, "The SEC's charges are completely unfounded in law and fact and we will vigorously contest them and defend the firm and its reputation." As the entire investing world knows by now, Goldman Sachs is the latest cockroach...

South Africa’s official opposition (the Democratic Alliance) and various international ‘green’ movements failed in their attempts to scupper Eskom’s World Bank loan last week. Their request for a ‘conditional’ loan fell on deaf ears and the bank granted the state power utility $3.75bn to part-finance its Medupi coal-fired plant. What will Eskom do now?

What’s next for shares? They’ve seen a blistering run since the low of last March. But these gains remain under the constant threat of being wiped out if stimulus measures are withdrawn or a double-dip recession takes hold. With two major crashes in the past decade, investors are understandably concerned about risking their cash in equities. Enter the structured product.

The Japanese have encountered an unlikely foe in their fight against the deflation that has ravaged their economy over the last 20 years: the urban housewife. Close on 8,000 Japanese supermarkets are now under the spotlight of the Mainichi Tokubai (everyday bargaining) mobile website.

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