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The Sri Lankan central bank is buying gold to diversify its reserves and smooth out periods of dollar volatility, Ajith Nivard Cabraal, central bank governor, said.
The move, which follows India's gold purchase, is part of a policy change on the part of the bank.
"We did experience this huge currency volatility during the time of the crisis that gave us the feeling that we need to save in something more solid," Mr Cabraal told the Financial Times. "Naturally gold crops up as the more logical item."
The move, which follows India's gold purchase, is part of a policy change on the part of the bank.
"We did experience this huge currency volatility during the time of the crisis that gave us the feeling that we need to save in something more solid," Mr Cabraal told the Financial Times. "Naturally gold crops up as the more logical item."
- Financial Times
The number of Americans receiving food stamp assistance soared above 36 million for the first time in August, the eighth month in a row that enrollment set a record, the U.S. Agriculture Department said on Wednesday.
USDA said 36.492 million people were receiving food stamps, also known as the Supplemental Nutrition Assistance Program. In July, enrollment stood at 35.851 million. At the current rate, an estimated one in eight Americans receive benefits.
In the latest data, the average person received $132.99 in August, compared with $101.31 in August 2008.
USDA said 36.492 million people were receiving food stamps, also known as the Supplemental Nutrition Assistance Program. In July, enrollment stood at 35.851 million. At the current rate, an estimated one in eight Americans receive benefits.
In the latest data, the average person received $132.99 in August, compared with $101.31 in August 2008.
- Reuters
[This week] Chrysler unveiled its five-year business plan. Apparently, the first part of the plan is "Be Around in Five Years."
- Conan O'Brien
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A Still-Safe 18% Dividend
By Dr. Steve Sjuggerud Thursday, November 5, 2009 A Still-Safe 18% Dividend -
The Best Simple Gold Indicator Around
By Dr. Steve Sjuggerud Wednesday, November 4, 2009 The Best Simple Gold Indicator Around -
The Best Three Gold Coins to Buy Right Now
By Tom Dyson Tuesday, November 3, 2009 The Best Three Gold Coins to Buy Right Now -
This Is Where I'll Go to Escape America
By Tom Dyson Monday, November 2, 2009 This Is Where I'll Go to Escape America -
How and Why China Will Flood the Gold Market
By Jeff Clark Saturday, October 31, 2009 How and Why China Will Flood the Gold Market
35% Return on Capital Is Normal Here
By Dr. Steve SjuggerudFriday, November 6, 2009
Someday, my friend Rahul will be a famous investor. I like to say he's the "future Warren Buffett of India."
I trust him so much, a year ago I gave him a substantial chunk of money to manage in Indian investments for me. It's performed extremely well (admittedly emerging markets are up big this year). Rahul is speaking at our upcoming Alliance conference on Monday, so I asked him to share a few words about what's going on right now in India. Here's what he had to say...
In its fiscal year ending in 2007, its return on equity was 34%. In its fiscal year ending in 2008, it had a 28% return on equity. If you annualize its latest quarter, the return on equity is down to 22% – still admirable.
You'd think a business with such a return on equity would trade at a premium to its equity value (essentially its liquidation value). Nope. It trades at a 26% discount.
The shares of this paper company have more than doubled since their October 2008 lows. So you'd think they'd be expensive. Nope. Even after that big run, shares are still only trading at five times trailing earnings.
There is no estimate for this company's future earnings... because there are basically no brokers who follow it. Just Rahul. India has thousands of small companies. Rahul picks through them to find the best opportunities, like Seshasayee.
After my trip, I was impressed with Rahul... and I was impressed with the ability entrepreneurial Indians have to turn hard work into profits. When he says the future is bright for India, I believe him.
By the way, don't think Rahul is bullish on India just because he's Indian...
He came to the U.S. and graduated from an Ivy League school, fully expecting to find his career in the States. But while in the States, he realized the REAL opportunity was back home in India – in businesses like his friend Jim's power plant and Seshasayee Paper.
While Rahul lives in India, he's in the States this week, speaking at our Stansberry Alliance Conference on Monday. We look forward to seeing many of you there.
Good investing,
Steve
P.S. To learn more about Rahul and his company, visit www.atyantcapital.com
I trust him so much, a year ago I gave him a substantial chunk of money to manage in Indian investments for me. It's performed extremely well (admittedly emerging markets are up big this year). Rahul is speaking at our upcoming Alliance conference on Monday, so I asked him to share a few words about what's going on right now in India. Here's what he had to say...
My friend Jim's return on capital is 35%...Rahul is right. I visited India a year ago... Rahul took me around to see some of his favorite investment ideas. One was a company called Seshasayee Paper. In short, the company bought a massive paper operation from the Northeastern U.S., took it apart, and moved it to rural India.
Yes, that is thirty-five percent on his money in his business... and he doesn't borrow any money.
His business? Power generation. How can you make 35% on a power plant? Jim's plant is here in India...
Specifically, Jim runs a company that operates a "merchant" power plant. A merchant power plant is one which does not have a long-term sale agreement with any customer... It sells power for short durations (usually under a year) to the highest bidder.
With the economy growing at a very rapid rate, India has a chronic power deficit... While long-term power-sale agreements are made at rates between 3.5 cents to 5.5 cents per kilowatt-hour (or unit), merchant power plants are commanding rates up to 8 cents per unit. Peak power is being purchased by consumers in many cases at 20 cents per unit.
I spend most of my time researching companies and talking to businesspeople. I've found that Jim's scenario is not the exception but the norm in many smaller companies in India...
In its fiscal year ending in 2007, its return on equity was 34%. In its fiscal year ending in 2008, it had a 28% return on equity. If you annualize its latest quarter, the return on equity is down to 22% – still admirable.
You'd think a business with such a return on equity would trade at a premium to its equity value (essentially its liquidation value). Nope. It trades at a 26% discount.
The shares of this paper company have more than doubled since their October 2008 lows. So you'd think they'd be expensive. Nope. Even after that big run, shares are still only trading at five times trailing earnings.
There is no estimate for this company's future earnings... because there are basically no brokers who follow it. Just Rahul. India has thousands of small companies. Rahul picks through them to find the best opportunities, like Seshasayee.
After my trip, I was impressed with Rahul... and I was impressed with the ability entrepreneurial Indians have to turn hard work into profits. When he says the future is bright for India, I believe him.
By the way, don't think Rahul is bullish on India just because he's Indian...
He came to the U.S. and graduated from an Ivy League school, fully expecting to find his career in the States. But while in the States, he realized the REAL opportunity was back home in India – in businesses like his friend Jim's power plant and Seshasayee Paper.
While Rahul lives in India, he's in the States this week, speaking at our Stansberry Alliance Conference on Monday. We look forward to seeing many of you there.
Good investing,
Steve
P.S. To learn more about Rahul and his company, visit www.atyantcapital.com
YOU CAN MAKE A LOT OF MONEY IN BONDS!
Question for DailyWealth: Was Porter Stansberry right with his wild claim in May? Can I really make as much in bonds as I can in stocks?
Answer: As always, let's consult the judge, jury, and executioner of all ideas: the market.
Below, you'll find another comparison chart. This one compares the gains in the high-yield corporate bond fund (black line) to the gains made in the S&P 500 (blue line). As you can see, Porter was right: Bonds gained a bit more than stocks. The nitty-gritty total return numbers are 17.4% for bonds versus 15.6% for stocks.
How can boring bonds register such big returns in such a short time? Bonds are just like any asset... When folks get scared to death, they'll sell a dollar's worth of bonds for 60 cents. The story here is the same as any great contrarian trade: When most folks can't stand the thought of owning something, that's when you buy with both hands.
