Microsoft Valuation!

Dear Reader,


Here I am going to attempt to value Microsoft Corporation, the world leader in the personal computer operating systems with MS Windows and world leader in enterprise software with the MS Office suite.

Currently the market values Microsoft at 659.67 billion USD with a price of 85.51 USD which is a truly staggering sum. Is the company worth the money? In my opinion, in the current economic climate the answer is yes. Actually, I think Microsoft is worth 20% more or circa 783 billion USD at a price of 106 USD.

Why? Simply put Microsoft corporation is at the forefront of the cloud computing revolution with its Office 365 enterprise suite and Azure cloud computing platform. MS Windows and MS Office are the biggest revenue generators for Microsoft. And the companies are switching more and more to the Office 365 subscription model. Azure is the second most popular cloud computing platform after Amazon Web Services. In addition, Microsoft is earning a lot with the Xbox console. The company entered the hardware business with its Surface Tablet and Surface Book laptops.

What are the risks for my forecast that the real(intrinsic) value of Microsoft is 783 billion USD, price of 106 USD or 20% above its current market price of 85.51? Basically, the global economy could go into a recession or negative GDP growth for two or more quarters. Usually, the information technology stocks are geared(leveraged) to the economic cycle and their prices should fall by a higher percentage than the main indices like S&P 500 or Dow Jones Industrial Average. Usually the Nasdaq composite falls by more. Companies will still continue to buy MS Windows and MS Office, but they are likely to cut costs and maybe buy fewer Microsoft licenses.

In short, if the global economy enters a recession I expect Microsoft's value to fall by more than 30%.

At the moment though, I stick to my forecast that the intrinsic price of Microsoft's stock is circa 106 USD or 20% above the current price of 85.51 USD.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

Bitcoin Valuation!

Dear Reader,

Here I am going to attempt the (almost) impossible - to value Bitcoin.

Currently the digital currency Bitcoin, yes I think it is actually a currency, trades at 14771.75 USD.
The Commodity Futures Trading Commission thinks Bitcoin and other crypto currencies are commodities. That is why this Sunday the Cboe Global Markets Inc. will start trading futures on Bitcoins.

Why do I think Bitcoin is curency? The definition of a currency is: unit of account, store of value and means of exchange. Actually Bitcoin would cover all three attributes if it was regulated. Currencies which have a central bank and respectively a government standing behind them tend to store value because the central bank ensures the currency(USD for example) stores value by targeting stable inflation rates, usually 2% change in  the price level year on year. Actually, if Bitcoin did not fluctuate so much it would cover all three pillars of the definition of money.

However if the central banks(governments) start regulating it would Bitcoin lose its appeal? Possibly.

So what is the 'correct' price of Bitcoin? Since there is no cash flows behind Bitcoin the traditional valuation methods do not apply! So, basically I think technical markets analysis should come in handy here. Whenever Bitcoin breaks through resistance levels like let's say round numbers like 20 000 USD or 50 000 USD the probability of Bitcoin's value rising increases. There is some fundamental touch, though. This is the choice of governments. If governments decide in tandem they could shut Bitcoin down and drive its price to 0 (zero).

I think Bitcoin will hit 100 000 USD and then crash by more than 30%. If governments do not shut it down, after the fall Bitcoin should start slowly rising again.
 

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

Facebook Valuation!

Dear Reader,

Now I am going to make an attempt to value Facebook Inc., one of the two most popular internet sites with www.google.com

At Price Earnings ratio of 34.69 the valuation of Facebook looks lofty, but not so much if you consider it is a technology growth stock. Actually, Facebook is wildly profitable. Its net profit margin is in excess of 40% for the most recent(Q32017) quarter. At the current run rate the company would clock in in excess of 40 billion USD in revenue. Currently the company has a market capitalization of 520 billion USD. According to the Price Sales ratio, I would say the company is overvalued. That said, Facebook is 'printing' money, the company is extremely profitable.

So what is the true intrinsic value of Facebook Inc.? The key word for the answer is growth. The company has circa 14% of the world digital(internet) advertising market and together with Alphabet Inc(Google's parent) account for more than 50% of the global internet advertising market. Basically, the digital advertising market is a duopoly. The global internet advertising market is growing year on year in excess of 15%. As long as this growth continues Facebook Inc. price will go on rising.

In my opinion Facebook Inc. price should be around 200 USD or circa 10% above the current price of the company of 179 USD. One of the reasons for the relatively conservative estimate is that Facebook itself expects its growth to slow due to inability to place too many more adds in the users' news feed.


Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

Tesla Inc. Valuation!

Dear Reader,

Here I am going to make an attempt to value Tesla Inc., the famous maker of Tesla electric automobiles.

Basically, I think Tesla Inc. is grossly overvalued. I my opinion, the real value is half its current market capitalization of 51.52 billion USD.

Why? Basically, Tesla Inc. is losing too much money. In the third quarter the company lost 619.38 million USD on sales of 2.98 billion USD or -0.208% net profit margin for the third quarter of 2017. For the whole 2016 things look a little better with a negative net profit margin of circa - 10%. At the same time another luxury sedan maker like BMW's net profit margin for 2016 is 7%. The car-making business is notorious for its low profit margins. Volkswagen's margins are even thinner than BMW. Than what is the problem with Tesla? The truth is electric vehicles are simply too expensive to make. They use too much ferrous metals which cost a fortune. The battery is too expensive simply. Even though the US government subsidizes Tesla Inc., the company still loses huge sums of money.

Can Tesla's  stock go to 0(zero)? Yes it can. If there is no breakthrough in the electric car manufacturing technology, investors will not be pumping money into losing enterprises forever.

So, basically I think Tesla Inc.'s stock intrinsic value is 153 USD, half the current 306.53 USD stock price. Tesla's market capitalization should be around 25 billion USD.


Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

Apple Inc. Valuation!

Dear Reader,

I will try to value Apple Inc., the famous maker of IPhones and the most valuable company in the world by market capitalization.

Currently Apple is valued at 898.40 billion USD market capitalization. A truly staggering sum. The stock price is 174.97 USD. Is Apple Inc. correctly valued?

Basically, It depends!

If the global economy continues growing above 3% measured by world GDP growth year on year, Apple is even slightly undervalued. Apple's Price-to-Earnings ratio is 19.05, which is above the average forward S&P 500 Price-to-Earnings ratio for the last 20 years at 17. If the global economy continues growing above 3% I think the price for Apple should be 15% higher than the current 174.9 USD or 201.215 USD. As the global economy grows people will become more affluent and be able to afford Apple's pricier products.

However, if there is a global recession, defined by two consecutive quarters of growth and world GDP falls by more than 3% for a calendar year Apple is circa 20% overvalued or Apple's stock price should be 139.976 USD. In a recession people are more price sensitive and Apple's luxuriously priced products will not be highly demanded.

My opinion? I think Apple's stock is 10% undervalued currently. Apple's stock should be trading at
192.467 USD.

Otherwise, I think US stocks measured by the main indices will continue going higher for the next 2-3 years.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

Alphabet Inc Google GOOGL Valuation!

Dear Reader,

Here I am going to make an attempt to value Alphabet Inc, or otherwise known as the owner of the ubiquitous Google search engine.

Currently Alphabet Inc's market value is 713.87 billion USD, which is a staggering sum. The stock with the ticker  GOOGL trades at a Price/Earnings multiple of 34.51 and Price/Sales multiple of 7.91.
The main driver of the high valuation Alphabet Inc is the growth of the online advertising market where the company has a dominant circa 34% market share. Furthermore, the online advertising market is growing in excess of 10% globally.

However, I think Alphabet Inc is circa 20% overpriced. The online advertising market will not continue growing strongly forever, since Earth's population is not growing so fast anymore and there is a natural limit which is the size of the global advertisement market. The GOOGL ticker stock is too richly valued for my liking.

A wild card, though, is the possibility that Alphabet enters and disrupts another industry. The closest the company has come is its cloud computing offering. But the revenue from Alphabet's cloud computing efforts is still not enough to move the needle significantly. Another bet is self driving cars. But as Tesla's struggles show it is far more difficult to build automobiles profitably at scale than initially envisaged.

So I stick with my call that Alphabet's stock is circa 20% overvalued. With the first US stock market correction GOOGL will fall significantly.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

Amazon Valuation!

Dear Reader,

US stocks are on a tear. I forecast they will go up for 1-2 years more without a correction of more than 15%.

Here, I will make an attempt to explain and forecast the valuation of Amazon.

The valuation of Amazon has dumbfounded financial markets experts since, basically Amazon's existence. At Price-to-Earnings Ratio 284 Amazon screams overvaluation. But is it overvalued? Let's take a closer look.

Two are the main drivers of a stock's value - return on equity and growth. The return on equity of Amazon is virtually nonexistent, because, well, the company doesn't make money, or small amounts compared with its huge revenue of above 135 billion USD. So Amazon's high valuation must be all down to growth and the hope that somewhere in the future the incessant growth of the online commerce and respectively Amazon's revenue will bring large profits and dividends. This seems an OK hypothesis since the online shopping market grows at rates higher than 10%. However, this hypothesis has driven the Amazon's high valuation for 15 years or more. And there are still no large profits on the horizon. How long can this continue?

Personally, I believe Amazon's stock is about 20-30% overvalued. Amazon subsidizes prices of the products it sells, so it keeps its market share through low prices. If the company stops doing that, its market share and revenue could fall or at the very least stop growing so quickly. I believe 800 USD is a good target price for Amazon, compared with Amazon's current price of above 1125 USD.

A growth driver for Amazon has been its cloud business Amazon Web Services. But the company keeps putting its overall profits in product subsidies and business development. The software cloud market should be a huge business and Amazon is leading the pack. So if the company starts making and distributing more profit to shareholders it can grow into its valuation. But for now, I am sticking with my value of Amazon's stock of 800 USD.


Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

Top Five Technology Stocks, Global Economic Growth, US, Russia Stocks!

Dear Reader,

Microsoft, Google and Amazon posted blowout earnings. The Nasdaq technology index is on a tear, rising like crazy. Megacap technology stocks like Apple, Alphabet(Google), Microsoft, Facebook, Amazon may well be overvalued but they are earning staggering amounts of money. This time the possible dot com bubble is smaller, because the large capitalization stocks are making loads of money(profit), not just eyeballs on the site like in 2000.

But the top 5 technology stocks' valuation is getting ridiculous. The top 5 tech stocks amount to more than 3 000 000 000 000(trillion) USD in market capitalization! This is simply staggering. This time, however, the earnings and revenue are concentrated in the 5 aforementioned stocks.

I envisage a correction in the main US stocks indices  S&P 500, Nasdaq and DJIA of circa 30% in the next two three years.

Catalonia's secession from Spain is going to make the yield on the Spanish government bonds reach 3.00% soon. The European Central Bank will go on buying assets for longer than expected. The ECB could end up stifling the bond market in the eurozone and indirectly the equities markets in Europe. If the ECB ''achieves'' this Europe will end up with a Japanese scenario - low inflation, low or negative growth.

Otherwise, I believe global oil stocks are undervalued. Oil measured by WTI oil and Brent oil will soon establish a range between 60 and 75 USD, according to me. Russian and Brazilian stocks are therefore undervalued.

Otherwise, I believe the global economy is about to accelerate. Global GDP growth year on year will reach something like 4.1-4.3% in the next three to four years. Credit is about to grease the economy. Credit growth is to rise significantly. Global banks will benefit. Global banks stocks are value stocks at the moment and I think they are undervalued.


Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

Are US Stocks in a Bubble? Are Emerging Market Stocks Value Plays? Russia, China Stocks!

Dear Reader,

Many analysts say US stocks are in a bubble. This may well be true. But I think the US stock market rally is set to continue for 2-3 more years. The largest technology stocks like Apple, Google, Microsoft, Facebook, Amazon are richly valued, but they are posting mind blowing results in terms of profit and revenue. Amazon excluding, which has been  notorious for making scant profits. So if the Nasdaq falls, it will fall by no more than 30% from peak, according to my humble opinion.

There just isn't a visible catalyst on the horizon which could unleash a financial crises. A possible crises cause could be the ETF industry which exhibited stunning growth in recent years. Another Black Swan event for the global stock market rally could be a large globally systematic bank failure. In US there are no obvious candidates, but in Europe Deutsche Bank, Italian and Spanish banks could fall into trouble. Regarding the Catalonia independence movement, things are going to get worse, before they get better. Large Spanish banking players like Santander and BBVA could easily get into trouble and drag other global banks and the global economy down with them.

Regarding emerging markets stocks... Russia stocks have developed into something of an oil value play. I personally feel oil measured by both US WTI and Brent could easily hit 70 USD which should propel Russian stocks. Chinese stocks seem also value plays, but to a lesser extent. Personally, I think China will suffer a crises, triggered by the financial sector in the country burdened by the over-leveraged both state-owned and private enterprises. A crisis in China could sink the global economy in deep recession.

Basically, If a global crises ensues, after it is done, emerging market stocks should be a great long term investment, in my opinion. Emerging markets(Brazil, Russia, India, China etc.) are now big enough to stand on their own feet. So they should survive the next crises and prosper afterwards.


Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

US Stocks, Russian Stocks, German stocks, Europe!

Dear Reader,

US stocks continue higher. They could well be overpriced, but the smartphone market is still growing, the global central banks like the Federal reserve, the European Central Bank and the Bank of Japan are still adding cumulatively liquidity to the global financial system. Additionally the global economy is growing, being at relatively slow pace and companies'  earnings are growing.

Actually, I think US stocks measured by the S&P 500 could fall by more than 30% if a selloff ensues. When the fall starts, risk management will be key. The risk can be managed through combination of long and short sales, derivatives like put options and futures or simply going into cash. Personally, I favor going into cash, when there are signs a selloff is coming. Possible signs could be large fall in the S&P 500, fall in GDP, abrupt stopping of liquidity provided by the global central banks.

Russian stocks are basically undervalued. The Russian stock market is reliant on energy prices, Energy stocks are value stocks at the moment. I think the price of oil measured by US WTI and Brent crude is going to start drifting toward 70 USD. Consequently, the rubble will strengthen and the Russian economy will start growing with more than 4% annually.

German stocks could still go higher, the European economy is growing at a healthy pace(2%). Germany is an economy leveraged on manufacturing, so if European growth accelerates German companies could still benefit handsomely. Other big stock markets in Europe like France, UK and Italy will also go higher if the region's economy goes on growing. Spain is another case, Catalonia could secede, which will be a great shock to the country, Actually, Catalonia is the main short-term risk before Europe's economy.


Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

Tesla, Airbnb, Cryptocurrencies, US Bank Stocks and Oil!

Dear Reader, 


Here are my thoughts on Tesla, Airbnb and Currencies.


As you might know, Tesla is making losses of around 3 billion USD a year.

As far as I am concerned, there are two ways in which Tesla survives and thrives:

1) It starts to make money.

2) The governments start banging with a fist on the table, which they are doing, and say every car should be powered by electricity.

Tesla and Solar city's successes are largely financed by subsidies. If the governments stop them, Tesla and Solar City will most probably go out of business.

One of the problems are that electric cars use a lot of ferrous metals, which are expensive and make the cars expensive.

Airbnb is profitable, but still dependent on governments to survive with looser regulation.

Otherwise, I think the US stock market will go on climbing higher. I like gaming stocks like TTWO, ATVI, EA and lithium producers like ALB(Albemarle Corporation)..

If the Federal Reserve goes on raising rates US banks should outperform. Oil, measured by US WTI will start drifting higher and will establish a new range measured by 60 - 70 USD. Brent oil already almost touched 60 USD.


Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

Germany Elections Results, European Stocks!

Dear Reader,

The German 2017 election results bode OK for Europe. There will be no debt mutualization, read the Germans will pay for everyone, which they cannot. The eurozone will continue integrating slowly which is the best option, as far as I am concerned.

Germany should start making small budget  deficits which will put negligible upward pressure on the 10 year bunds yield.

EUR/USD should fall a bit. It is just too high.
Europe's banks should benefit from the German elections result.

Europe's growth will stay above 2%, which should prove beneficial for Europe's equities.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

Are the Largest Capitalization US Technology Stocks(Big 5) Overvalued?

Dear Reader,

Many leading investors have said that technology stocks are in a bubble. I will take a look at the big 5 US and global technology stocks: Apple, Google, Microsoft, Amazon and Facebook.

The technology behemoths exhibit different valuation metrics. Apple has P/E Ratio of 17.75, Google's P/E is 34.30, Microsoft's P/E is at 27.67, Amazon's P/E is 245.56, Facebook's P/E is 37.40.

The internet advertising market is growing strongly -> 10-20% a year and this trend supports the high valuations of Google and Facebook. The internet commerce is exploding, so this keeps Amazon's valuation high. The cloud services market is one of the next big things, so Microsoft's valuation is supported. Apple is thought to be increasing its market share and coupled with the growth of the smartphone market and some analysts see it's market cap surpassing 1 trillion USD.

Are they overvalued? It is difficult to say! If their respective markets continue growing strongly, they will soon grow into their valuations.

But if they are overvalued, by how much?

My verdict:

Facebook seems the most overvalued of them all. I know it has the biggest engagement, but still. I think Facebook is overvalued by 30%. Amazon is overvalued by 30%. Google is overvalued by 20%. Apple and Microsoft by 10%.

But the valuations are dynamic. If their respective markets continue to grow rapidly and there are no major new competitors, they may well prove to be undervalued in the long-term.


Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

ETF Industry, Technology Stocks, Russian Stocks, Natural Gas!

Dear Reader,

The US stock market rally will go on for the foreseeable future. A black swan event is not in sight.The ETF industry could, however, trigger the next financial crises. It is already systematic and opaque in some corners.

As far as growth stocks are concerned I like Arista Networks(ANET), BOX, AMD, NVDA,TTWO, EA,ATVI. Nvidia(NVDA) looks pricey, but artificial intelligence is still yet to discover its enormous potential. NVDA build chips for artificial intelligence.

Technology mega cap stocks like APPLE, GOOGLE, MSFT, AMAZON, FACEBOOK could go higher still. Technology is here to stay, although there are the normal cycles. It could crash for several years, but technology is one of the ways to advance humanity.

Oil could go to 70 USD shortly, which would benefit Russian stocks, in particular. Basically, I think Russian stocks are underpriced. They are a pure value play. I think natural gas could become yet bigger for the automobile industry, which would hugely benefit Gazprom and Russia. Natural gas is extremely cheap now, so I think the industry will realize this relatively soon.


Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

Emerging Markets Stocks, Russia, Brazil and US Growth Stocks!

Dear Reader,

Emerging markets stock markets, Russia and Brazil, especially look undervalued.

I think oil, although stuck in a range, could break out to 70 USD for both WTI and Brent.

Russian and Brazilian stocks are thus poised to rise significantly. Basically, now emerging markets stocks are value stocks and US stocks seem the growth stocks. I do think the rally of US stocks will continue.

Nvidia could continue to profit from the ensuing Artificial Intelligence boom, while AMD could benefit from the Bitcoin revolution.

Lithium producers like Albemarle Corporation(NYSE:ALB) could benefit if electric cars take off. Furthermore demand for batteries is increasing, Albemarle certainly seems like a growth stock for the future.



Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

US Technology Stocks, Central Banks, Large Cap Banks and Oil Companies!

Dear Reader,

The US stocks bull run is still going strong. Nasdaq is on track to chalk up 30% return on 2017 as in 2013.

The European Central Bank gave a dovish message today and could possibly continue to buy bonds actively, which should further support stocks.

Gold is going up strongly in the last few weeks. The upside for gold, however, is limited by the intention of the Federal Reserve to continue raising the Federal Funds Rate.

Electronic gaming stocks(TTWO, EA, ATVI) seem a good investment, since millenials are deeply involved in playing electronic games on PCs, Tablets, Mobile Phones etc. Google, despite its huge market capitalization, seems not to be overvalued. Its market is simply growing very strongly and the company goes on earning high rates of return. Facebook has a huge profit margin. Microsoft and Apple seem fully valued, though. But it all depends on the IPhone and cloud services for those two technology behemoths.

Large cap banks and oil companies are the value plays of the moment. If the global economy does not take off actively soon, I do not see too much upside for large cap banks. Oil seems stuck in  a range for the moment, but a bounce to 70 USD is possible in the midterm. So large cap banks and energy companies should continue to be value plays.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

US Stocks!

Dear Reader,

US stocks continue their march higher. I do not see a bear market(fall of 20%) of the main indices in sight.

US stocks seem with lofty valuations, but the US economy is doing OK. Facebook seems a bit overvalued, but apparently investors think it will continue growing strongly and will develop new markets. Google is wildly profitable and its market continues to grow. Microsoft, Apple and Amazon see growth in front as well.

I do not see gold rising too much further. The Federal Reserve will continue its hiking cycle which should put downward pressure on gold. Oil seems to be stuck in a range and I do not see it breaking out soon.

Electronic games companies like Electronic Arts, Activision Blizzard and Take Two Interactive look attractive.


Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!



Kind regards,
Petar Posledovich

US Technology Stocks, Bonds, Oil!

Dear Reader,


The Nasdaq Composite Index of predominantly technology stocks fell around 3% from its peak. I do not think this is the beginning of a repricing of technology stocks. The global IT market is still growing, the number of smartphone users is growing and the fundamentals of the global technology stocks still seem positive and intact. Any correction is still a buying opportunity.

As of late, there has been hawkish talk of raising interest rates by leading central banks like the ECB, Bank of Canada etc. and the yields on the government bonds of the world's biggest economies have risen. Personally, I do not believe this is a trend of rising yields, at least not markedly as of yet. If there is not another global recession, I believe the interest rates in advanced countries could start rising somewhere in 2018.

US WTI Oil could fall below 30 USD. If this happens, this would be a buying opportunity for oil stocks majors, oil fracking companies. Good bets if this happens, as far as I am concerned, could be Marathon Oil Corporation and Petroleo Brasileiro.


Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of Bulgarian National Bank!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!



Kind regards,
Petar Posledovich

US Stocks, Emerging Markets and Central Banks!

Dear Reader,


This week US stocks suffered a one day drop by more than 1% measured by the main indices. They bounced back immediately, though.


I continue to think US stocks will go on rising. The Trump trade will fade a bit, but earnings will still grow. The US economic recovery will continue with pace of 1.2 - 2.0% GDP growth. Until there is a shallow recession. But even then, when stocks fall by more than 20%, this will be a buying opportunity. The US has become a safe heaven and it attracts a lot of capital, part of which finds its way into stocks.

Oil is stuck in 45 - 60 USD range and I do not envisage it breaking soon. Russia stocks should continue to rise, as the Russian economy is recovering. India continues to grow strongly and Indian stocks are a long term buy opportunity. The turmoil in Bazil is a buying opportunity, as far as I am concerned.

I start to think the Federal Reserve will raise the Federal Funds Rate only once more this year. I predicted this in the past, but the probability for a hike rose. Now the probability fell back again. That said, I forecast the yield on the 10 year US treasury will finish 2017 below 2.70%.

I expect the European Central Bank will go on buying assets until the end of 2018, when its Asset Purchase Program will end. I do not expect the yield on the German 10 year government bond to rise above 0.80% in 2017.



Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of Bulgarian National Bank!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

US Technology Stocks, Emerging Markets Stocks!

Dear Reader,


US stocks continue to go up. The large US technology companies Apple, Google, Microsoft, Amazon, Facebook drive the market higher. They are set to continue to go higher driven by smartphone demand and artificial intelligence.

The larger US technology sector is also doing well. Private companies are raising astounding amounts of money. The money for startups is abundant driven by the low interest rate environment and the party is set to continue, at least in the next two three years.

US WTI and Brent oil is stuck in a range, but the risks are to the downside. US fracking companies are liking the higher prices and the conventional oil drillers(OPEC primarily) are bleeding and losing market share. The swing producer is now the US shale industry. US WTI oil could fall below 40 USD in the next few months.

Russia's economy is slowly improving and being restructured. The regulators in China are trying to get the air(leverage) out of the securities markets and this is stifling the growth of Chinese stocks's prices. India stocks look good, since the economy is growing strong.

The US stock market could correct by 10% measured by the main indices, but I think US stocks will recover, barring any financial shock.



Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of Bulgarian National Bank!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

French Elections, Global Stocks!

Dear Reader,

Emmanuel Macron seems destined to win the French Presidential elections.

Global stocks should react positively and rise thereafter. 10 year German government bonds yield should rise mildly, as much of Macron's victory is already incorporated.

US stocks should continue rising. Much safe heaven capital flows are looking for some return and ending up in US stocks. Financial stocks could correct a bit, but they should go higher influenced by Federal Reserve Federal Funds Rate hikes. Furthermore, Donald Trump should be able to pass regulations that benefit the financial sector.

WTI oil could fall below 40 USD and energy stocks could get hurt. Fed hikes should push gold even lower.

European stocks, banks especially, seem undervalued. If Macron wins the elections, European stocks could rise by 5 - 10% as measured by Eurostoxx 50 and Eurostoxx 600. EU banks should benefit even more.

Chinese stocks seem capped by the authorities' effort to regulate financial services.



Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of Bulgarian National Bank!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

US Technology Stocks Boom to Continue, Oil, Gold in a Range!

Dear Reader,


US technology stocks continue their march higher. In my opinion, as long as the smartphone boom continues, the US technology stocks will go on rising. The smartphone is just such a powerful platform.

Artificial Intelligence is the next content that even now fills the smartphone.
Artificial Intelligence will usher in the fourth industrial revolution. Algorithms have great capacity to perform mundane, repetitive tasks.

US WTI Oil is stuck in a range between 45 - 60 USD which will be difficult to break. The factors that weigh on gold seem to be stronger than those that predict upside for the precious metal.

US stocks should continue grinding higher by 5-8% a year as measured by the main indices S&P 500, DJIA, Nasdaq. 



Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of Bulgarian National Bank!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

French Elections, US Stocks, Technology Stocks, Bunds!

Dear Reader,


I expect a right-centrist candidate to win the French Presidential elections. It will be eithor Macron or Fillon who wins the second round.

I expect French government bonds to rally hard, together with a milder rally of European stocks.

The rally in US stocks should continue. US technology stocks are richly valued, but because of the smartphone and the ensuing artificial intelligence boom their rally should continue.

German 10 year government bonds yield is to remain below 0.30% in the next several months. If Marine Le Pen becomes President of France, I expect the 10 year yield on bunds to fall below -0.30%.

US WTI oil could fall below 45 USD on US shale supply.

Despite the Federal Reserve raising the Federal Funds Rate, I expect gold to rally decisively in 2017 on safe heaven demand. There are just too many Black Swans - France, North Korea etc.

EUR/USD is to remain in a tight range in the next few weeks.


Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of Bulgarian National Bank!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

US Stocks, Gold, China, India Equities!

Dear Reader,

US equities could suffer a 10% correction in 2017. The valuations seem quite high. If Donald Trump does not manage to push through the deregulation of the financial sector I think US financials could fall more than 10%.

Gold should fall to 1050 USD in 2017. I cannot see gold rising, while the Federal Reserve is hiking rates.

US WTI Oil should fall close to 35 USD in 2017. Global demand is just too weak. China is slowing down, Europe's growth is anemic, US growth also.

China equities seem like a good investment as regards their valuations. India stocks should perform well, as  India is growing strongly.

Apple, Google, Microsoft, Facebook and Amazon could rise more.


Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of Bulgarian National Bank!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

US, Global Economy, Russia, China India Stocks, Commodities!

Dear Reader,

The Federal Reserve hiked the Federal Funds Rate to 1.00%. The market and the United States central bank expect two more hikes in 2017, altogether three during the current year. I forecast just one more hike. The inflation data will worsen because of the current and future fall of the oil price. The US economy is growing with 1.5% per year. This is far from the economy's potential which I judge is about 3.4% year on year GDP growth.

Stocks have some further upside. The stocks of Brazil and Russia could tumble, because of the fall of the price of oil. Chinese and Indian stocks look like a good investment, because of the growing economies of the two countries.

Oil is set to reach 30 USD around June, July 2017. The global economy is just too weak. I forecast the global GDP will grow by around 3.2% in 2017.

Gold has further to fall. Gold could reach 1050 USD before it rebounds.

I personally like US technology stocks. The mobile, artificial intelligence and cloud boom are set to drive the sector higher. The technology megacaps Apple, Google, Microsoft, Facebook and Amazon should outperform. I like chipmakers like AMD, NVDA.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of Bulgarian National Bank!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

US Technology, Financial Stocks, Federal Reserve!

Dear Reader,

My forecast of oil WTI falling to 35-40-45 USD is about to come true. Apparently, the world economy is not strong enough to absorb the spare quantity of oil.

I forecast the Federal reserve will hike the Federal funds rate two times in 2017. Something will eventually get in the way of three hikes as both the market and the central bank forecast.

Technology stocks, while richly valued, will continue to do well. Some bubbles like GoPro, Fuel GroupOn, Twitter etc. have popped, but many remain.

I personally like chip manufacturers like AMD and NVDA and cloud companies like BOX.
APPLE, Microsoft, AMZN, Google and Facebook should continue their march higher. These five companies have changed the world in a remarkable way. Technologies of the future are machine learning and cloud computing.

The US financials stocks run has gone quite far, I think. The global economy does not feel like 2007-2008 and yet Goldman Sachs' price has exceeded the 2007 high. I think US financials are due for a 10% correction.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of Bulgarian National Bank!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

US Stocks, Federal Reserve, European Central Bank!

Dear Reader,

US stocks wobbled during the last several trading days. I think the US stocks rally is still intact. As evidenced by the nonfarm payrolls report from today the US economy is doing well.

I still think the Federal Reserve could do two Federal Funds Rate hikes in 2017, which is still a lot. If the Fed hikes twice, I forecast the US GDP growth rate year on year will fall below 1.00%. If they hike three times or more the US economy could go into a recession.

Many market observers interpret the ECB's President Mario Draghi press conference this Thursday as hawkish. On the contrary, I think it was actually quite dovish. He spoke hawkishly, but acted dovishly. I think deeds speak louder than words in this case. I expect the yield on the ten year German governent bond to fall close to zero in the next several months.

My prediction that oil could fall to 45 USD WTI seems to be coming true. The fracking costs per barrel are now close to 30 USD, so the price could fall to 35-40 WTI USD even. Oil stocks could get hurt. If the Fed hikes rates aggressively this would hurt high yield bonds issuers as the fracking companies and topple the US economy in recession.

I think the price of gold could find a bottom at 1150 USD pre troy ounce.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of Bulgarian National Bank!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

Snapchat, Technology Stocks, Emerging Markets Stocks, Commodity Stocks!

Dear Reader,

Snapchat Inc.(SNAP) is trading at Prices/Sales 60 - a ridiculous valuation. Many technology stocks are in a bubble, but driven by smartphones, cloud services and artificial intelligence, the tech boom is set to continue.

Oil is to fall to 45 USD driven by US shale drilling. Large cap oil stocks could fall 10 -20%, oil frackers more than 30-40%.

Brazil, Russia, India and China stocks are undervalued. Emerging markets are now self-sustaining. Emerging markets stocks are to embark on a long term bull market, despite the Federal Reserve hiking interest rates. Many large emerging markets are pursuing market friendly reforms which could bring long term prosperity.

Gold is to rise, despite the Federal Reserve hiking the Federal Funds Rate. European stocks are undervalued, but I do not see European economic growth accelerating much. Too many structural reforms have to be undertaken in order for Europe to grow above potential.


Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of Bulgarian National Bank!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

US Technology Stocks, Japanese Stocks, Commodities, Federal Reserve!

Dear Reader,

The probability for a hike in the Federal Funds Rate come 15 March by the Federal Reserve is 80%. I still doubt the Federal Reserve will hike the FFR three times in 2017, but two hikes now seems quite likely.

US and global technology stocks should continue their march higher, I personally like AMD and BOX. AMD is making inroads in high technology processors, while BOX is at the forefront of the cloud services revolution. Just look at what happened when Amazon Web Services was down yesterday - thousands of sites that relied on AWS went down.

Oil is to remain in a tight range between 50 to 60 USD, so oil stocks have some upside 15-20% from the current levels.

Gold seems undervalued at the moment, provided the Federal Reserve is not too hawkish, so gold stocks stand to benefit.

The USD should strengthen to the Japanese YEN, so Japanese stocks could rise by 10-15%.


Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of Bulgarian National Bank!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich