Trading Strategy
As a portfolio Manager, my goal was to increase the portfolio value using a trading strategy that combines speculation and diversification (Refer figure 1 in the appendix). As a speculator, I would be betting on the movement of the underlying asset therefore, it was essential that I diversify my holdings to minimize the exposure. A diversified portfolio would provide certain protection against the downside risk if I bet wrong on the price movement. The types of vehicle I invested in were Futures contract and Stocks. Again, the goal was to diversify within both vehicle types to protect against the exposure (Refer figure 2 and 3).
Portfolio Holdings
Futures Contract:
Long Platinum April 2016: Platinum is one of the industrious precious metals and because of its unique properties it has become a popular trading asset. It is largely used in the auto industry and auto industry has been experiencing a boom; which is why platinum prices have been rising steadily. Platinum is also great investing option and it is cheaper than gold.
Long Soybean Oil March 2016: Increasing populations and developing economies have contributed to an ongoing increase in food demand, thus broadly raising the prices of most agricultural commodities over the past few years. “The price of soybean futures has been rising since early 2009, while the long-term outlook is favorable as well” . Furthermore, the oils are commonly used for cooking and also play a key role in the
Oil is the product that each and every one of us use. It can be used for fuel, heating and even cooking. The most often known for unstable price is crude oil or gasoline. According to the The Economist, The main reason for price shifts of oil is oversupply. The oil production in Saudi rose 10.3 million barrels per day. This increase is the effect of a new method that I being applied to oil extraction. This method is called fracking, fracking is where they drill into tight-rock formations then gradually turning horizontal for several thousand feet more. This results to accommodations to multiple oil wells. This new approved method of oil harvesting has raised the productivity gains and reduced the cost of harvesting oil.
Our approach is an active security selection with passive asset allocation. We invest heavily in common stocks, but vary our holdings to include companies of all sizes and industry groups. We seek to achieve sufficient diversification by abstaining from investing more than 5% of the total assets in a single security unless it has significant upside potential, and we make an exception for ETFs and index funds as they represent a basket of securities. Our main goal is to identify and invest in common stocks with high potential for both short- and long-term capital appreciation. Our secondary goal is to invest in common stocks with steady income. When potential for rewards are high, we also enter into derivative
I strongly advocate tactical asset allocation process and diversification over several different income and growth strategies. I believe that risk management and protection of investor's endowment are major objectives. In my portfolio, stocks may occupy a large portion and the
A. Explain what type of market structure is presented in the movie. Explain the types of strategies Joe Fox and Kathleen Kelly use to compete and maintain market power. Differentiate between pricing and non-pricing strategies (use Chapter 7 in Stengel’s textbook). You can expand and talk about potential strategies in the bookselling business even if they were not explicitly addressed in the movie.
Rookie stock market investors are those who only possess a relatively rudimentary knowledge and experience of the investing sphere. Most of these individuals usually commence by sticking to a 'buy and hold ' trading strategy. As a beginner, your general experience in investment trading is very limited. This, for the most part, confines you to making no more than a couple of trades perhaps on a monthly basis from a cash account. However, this does not necessary signify that you have not placed high expectations on your stock market trading activities. You most likely are very interested in expanding your knowledge as well as investment experience in order to realize the objectives you may have set. This is all nice and good.
Any number of consumer goods could be associated with oil to form another Guns and Butter type model, but almonds are perhaps the most ideal comparison. Suzanne McGee, a journalist for The Guardian, discuses the “looming conflict” between those who want to use water for fracking and those who want to use water for irrigation. In her article, McGee reports that Ken County, California is home to the “sixth largest oil area” in the country and the production of oil in that area is due to hydraulic fracking, which requires large amounts of water to be effectively removed from the water cycle. Additionally, this area is home to many farmers who require significant amounts of water for irrigation purposes (McGee). With water resources becoming scares as a result of the long lasting drought, these “water-intensive industries” are in
The Chinese government would reduce or eliminate the quotas and other measures which until now have protected domestic production of soybeans from cheaper imports. China’s consumption of soybeans ballooned by more than 160% between 2000 and 2011 when import barriers were removed, but the area planted with soybeans declined by 20% during those same years. Chinese farmers were simply unable to compete with imported soybeans that were RMB 300 to 600 (US$45-90) cheaper per ton than domestic beans. Imported soybeans now account for three-quarters of the soybeans processed into cooking oil and feed in China, the products of soybean crushing.
Breamer, J. (2009). Demand for corn and soybeans continue in 2010. High Plains Journal, (53), Retrieved from http://www.hpj.com/archives/2009/dec09/dec28/1228CropOutlookwspeakerpicj.cfm
Palm oil is produced at a lower cost than other vegetable oils. Supply and demand for palm oil is increasing dramatically. While it is used in a wide variety of
The triangle scheme of trading was created to have equal trades that everyone agreed on, however, a lot of trading went wrong for example, many times when enslaved Africans were taken to new places, and sometimes half off the people on the cargo died. This example shows that sometimes things went wrong for triangle trading. However, good trading and accomplishments came from the triangle trade, the process is a large part of how the trading made so many accomplishments. Here is the process. The Triangle trading was in places including: West Indies, Colonial America, Africa and Europe. Colonial America traded raw material including: cane sugar, tobacco, lumber and more with Europe. With those materials, Europe made finished products like: guns,
Soybeans are beans which are from the legume family which are native to East Asia. They can grow on a variety of soils and wide range of climates, ranging from snowy to tropical climates (Rob). Soybeans are used to make food such as tofu and soymilk, although it is most often processed into oil, which can be used for cooking, or sold for biodiesel production. The left-over which are not used for oil can be used for animal food due to the high-protein fiber which is in the left over. The GM Soybean, also called Roundup Ready (RR) Soybean, was developed by the biotech company Monsanto and was commercially available to farmers in 1996 (Editor, 2008). This GM soybean contains a gene that makes it resistant to herbicides which would
Thus such a mechanism helped create value for the shareholders as the profits of a Gold mine are dependent on fluctuation in gold prices and the difference between revenue and costs. Thus locking future prices, provided financial stability, enabling the organisation to avoids dips, and plan cash flows in a confident way, and in combination with the rising production, offered investors and shareholders a predictable , rising earnings profile in the future
There are several types of trading styles that persons seeking to profit from short term trades in the market may wish to use. Here is a brief description of the most widely used short term trading styles.
The commercial oil seed crop of Pakistan, cotton and rape seeds, cultivated varieties are not high yielding. The cotton crop is essentially grown for fiber and the seeds are only a by product whereas the rape and mustard varieties are not only low yielding but also rich in glucosinolates and erucic acid that are considered health hazards. Similarly, the price structure of oil seeds, depending on their quality has not been very favorable to the growers and consequently their production has remained almost static and non-productive in combating the shortage. Although claims and efforts be to reduce the shortage by increasing local production yet the problem has remained and the market demands have always been met through large-scale imports. It is felt that during the seventies through eighties the larger imports were that of the Soybean oil that was largely utilized for the production of both Banaspati and liquid cooking oil.
Soybean is the third largest oilseed crop in India next to Groundnut & Mustard and accounts for 25% of the total oilseeds produced in the country in a year. Soya oil contributes about 10% of total vegetable oils produced in the country. Groundnut is the most widely consumed and traded edible oil determining edible oil economics. India is the world’s second largest