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An exciting week. There is a lot to be learned by investors.
Tuesday 10 November 2015
What a week. How events affect the exchange. We live in an era of entrepreneurial minded investors. Details are not crucial. It depends on the correct assessment of situations. Here are some examples from last week of long downfield passes - a football term – or "Million Dollar Questions” - as the Americans would say:
- On Wall Street, Ferrari went public for the first time with the striking stock symbol: RACE. Only 10% of the issued capital of Ferrari was placed in public hands. The stock was trading around USD 51,00 per share. Now what ? Is this a unique opportunity to get involved and indulge yourself by owning this luxury brand? Or is this just an overhyped and overpriced share catering to client's dreams of being wealthy and owning the car itself?
- Twitter (TWTR), here there are very different views. In December 2013, the stock traded at USD 72, -. Today Twitter is trading at USD 29 per share -. The financial analysts believe in Facebook and Google. Twitter is viewed with skepticism. But on October 16 the former well known boss of Microsoft and billionaire Steve Ballmer purchased up to 4% of Twitter's issued share capital on the stock exchange. The man is no fool. Or is this just play money for him? Who in the medium term will be right? The professional Ballmer or the financial community?
- After the busted takeover attempt of Syngenta (SYNN) the share price at the Zurich Stock Exchange plunged from more than CHF 400, - to less than CHF 300 Now the infamous and unfortunate CEO Mike Mack finally threw in the towel and left the board of directors. The Syngenta shares rose to CHF 334 per share following this news. The shareholder community sighed a sigh of relief. Is this the beginning of a shareholder-friendly regime? The beginning of an incipient turn-around? Or was Mike Mack just a “sacrificial lamb” to be replaced by an even weaker successor?
- Alibaba (BABA), the counterpart to Google and Amazon under one roof in China, the Chinese Internet service Power House, listed on the New York Stock Exchange crashed early in September to USD 61, -. The general fear of a calming of the China economy took hold and pulled the Alibaba share price down with it. Today, the market price recovered to USD 84, -. The reason: Surprise! It had nothing to do with calming the Chinese markets. . Alibaba presented impressive growth figures. Will this continue? Or is it just another "bull trap"?
- Then on Monday, 19 October 2015, a really surprising bit of news: Oprah Winfrey, the US talk show legend and multi-millionaire, increased the price for Weight Watchers shares (WTW) on Wall Street by 10%. A sensational bit of news which no one was expecting. The world's leading provider of weight loss classes and models was on its way into the abyss on the stock exchange. In May 2011, Weight Watchers stock was quoted at USD 82, -. Then it went steadily downhill. Finally, the quote was below USD 6, -. After the announcement of Oprah Winfrey's entry, the stock soared. Now Weight Watchers is trading at more than $ 15, -. The end of suffering? What input is Oprah Winfrey's media able to exert Can they prevail with new ideas in management? Or is the whole thing just a media-driven flash in the pan?
These exchanges are really fascinating. What possibilities are there? Not in the major stock market indices, but by paying attention to detail you will make your money on the stock market. Not so fast, following the last week it shows that:
Keep your eyes open and stay vigilant while looking out for "solid investments". And then form your own opinion. The professionals and company insiders are not always right. Most investors who look at things from a distance and are composed and use common sense
have the advantage. So, be brave. In the coming weeks we will
from time to time look in more detail at one or the other of the above-mentioned shares.
I will get back to you.