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Trading and investing

Let’s Compare Bets gateway to trading and investing information. Learn how to trade sports bets and financial markets, or invest in financial markets and antepost betting markets. This section of Let’s Compare Bets is a sub section of our main website, Let’s Compare Bets.  Let’s face it, many things in life are a gamble, trading and investing are quite similar.  The outcome is unknown, but, Let’s Compare Bets aims to educate and provide visitors with the information needed to get closer to trading and investing goals.  Remember to bookmark Let’s Compare Bets or add us to favourites (ctrl D) so that you can find us again.

Trading

Trading what? Lot’s of things can be traded from, goats… if you are in the mountains of the middle east to financial assets.  Stocks, shares and commodities can be traded by normal people or people on the trading floor working in a high stress trading environment.  After the invention of the betting exchange even betting odds can be traded.  One in ten people trading online make massive profits.  Slightly more make small returns and the rest loss money.   This section investigates the types of trading and methods to make the path to successful trading easier whether it’s bet trading or financial trading. Better yet, join Let’s Compare Bets and get a free Betfair training document to get started on Betfair. Look right!

Investing

Investing is more long term than trading and favours a slower but more relaxed route to financial independence.  Investing  is more capital intensive but can be more rewarding in the long run.  Get investing help from someone making investing decisions right now. This section investigates investing techniques, publishes stock tips and has our very own portfolio.

Use the search box or the category list to search this section. Use the subscribe buttons to the top right to get the latest posts on Bet trading, financial trading, and financial investing.

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Fire and fury like the world has never seen

The USA military will use fire and fury like the world has never seen. Words from President Trump of the United States in response to threats from North Korea to strike a US military base on Guam using medium to long ranges missiles. A tense situation. Let’s hope that if they are going to war they have agreed not to go nuclear.

Anyone doubting war may want to take a look at this video. Added here for a couple of reasons. One because the speaker, George Friedman, tackles the subject from an interesting angle. He says “ global war is sitting in your pocket”. Mr Friedman spoke at Brain Bar Budapest, a forum for challengers and trend setters. Well, if Mr Friedman is setting trends then what he says may just be a self fulfilling prophecy, but an important one.  Here is a link.

Fire and fury

Time for balance

As editor of Let’s Compare Bets.com I have showcased a number of posts about investing and trading.  Suggestions for investments have been given to readers with the caveat of do your own research (DYOR). Two things recently converged to spur a new post to review the performance off a hypothetical investment portfolio.  A portfolio where all the possible investment ideas have been followed and invested.  In the post title My Sip Conundrum…. (link below) we suggested a retirement investment portfolio, which should be re-balanced at regular intervals.

Two tings have converged to make me want to balance my hypothetical portfolio.  In the interests of full disclosure the auther has investments in some of the companies mentioned.

Number one.  War drums are getting loader in the USA. Geopolitical risks are on the up.

Number two.  The current phase of the business cycle for the USA and UK which normally precedes recession or a contraction in economic activity is getting long in the tooth.  Odds of recession or a contraction in economic activity are getting shorter.

Next we’ll check how each investment has performed from the date of the original article.  Links to the original article have been provided. The percentage change in value, with a suggestion to either buy, sell, hold, accumulate or reduce have been are given.  ‘Buy’ means now is a good time to buy more. ‘Sell’ means sell the whole investment (a sell suggestion would be based on the valuation and technical analysis of the share price chart), accumulate means buy more at regular intervals giving the benefit of cost averaging into the investment, reduce mean sell a portion of the investment in order to balance the portfolio to within your target range, and hold means do nothing.

Balancing a portfolio is not a science.  From the original article about running a self invested personal pension it was suggested dividing the portfolio into categories.  Each category has a target asset allocation percentage compared to the total value of the fund.  When the percentage goes over target it’s time balance. Readers should balance in accordance with their own style.  Normally holdings that get sold would be rotated into categories that are underweight.

For simplicity my portfolio would be split one third in equities focused on growth, a third focused on income, and a third focused on commodities.

Now is a good time to hold cash. Readers may want to investigate the Sage of Omaha’s $100 billion dollar problem.  Cash has something called option value because it gives the option to invest the cash when valuations on shares are better.

15/05/2012    Astra Zeneca

(income category)

Performance + 100.5% including dividends. Over the past two months the share price has declined by 16.1% due to negative news flow about the drug pipeline. Now is a good time to buy more. Dividends have gone up during this time and the yield is currently a very good 4.8%.

Accumulate 

28/11/2015     My SIPP Conundrum

CF Woodford Equity Income fund (accumulation)

(income category)

Performance + 10%.

Long term the fund price is still in a up trend.

Hold

Woodford Patient Capital Trust

(growth category)

Performance 0%

Patience is required with this one. No change in price over that time but it has a bright future as we progress through the long term credit cycle.

Hold

J O Hambro Japan Dividend Growth

(income category)

Performance + 47% including dividends. The investment case remains the same.

Accumulate

Fidelity Asian Dividend (accumulation)

(income category)

+ 54% including dividends.  As above.

Accumulate

BlackRock Commodities Income Investment Trust

(commodities category)

Performance + 28% (including dividends)

still in an uptrend.  The category is also underweight compared to the income and growth categories.

Accumulate

continue portfolio results

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Amazon fever, the death of retail

Amazon is causing the death of retail! Remember when they used to sell books? Now they are the causing the death of retail and the stock price has gone parabolic, making Amazon Inc stock market darling.

Where do Amazon make money?

Amazon make money on their traditional e-commerce platform, the third party marketplace which enabled every day folk to make money online ( in a similar way to Ebay), Amazon Prime subscriptions, Web Services, and hardware.

Less and less people are shopping in bricks and mortar shops either in city centres or out of town shopping centres because they are buying their stuff online. Amazon started as a book retailer and has grown into some much different affecting competitors in every market they enter. They are the largest internet based retailer in the world by total sales and market capitalisation.

How has Amazon done this?

Amazon’s CEO Jeff Bezos has harnessed technology to make Amazon a very lean company. Using technology they have evaporated most of the costs of traditional retail. First by using the power of the internet and riding the digital revolution, then by bringing supply chains into the 21st centuary, reducing the cost of deliveries and now by eliminating human staff from bricks and mortar stores (they are doing this in the USA).

Cutting costs allowed Amazon to compete on price and undercut everyone else. Great for growing revenues. Profit however, have been more elusive. Amazon has a astronomically high share price with a multiple of earnings of 200x as of August 2017.

Automation has been key to Amazon’s business plans. Check out Amazon fulfillment warehouses;

Amazon Go;

and

Amazon Prime Air.

Wow, pretty cool if you ask me, but, are they getting ahead of themselves. Economists say one of the missing ingredients of modern western economies is productivity growth. Simply put, the amount of output per unit of input into the economy. Automation is the future of which Amazon has been a driving force, and it could trigger a productivity miracle. This is not without some serious side affects;

Causing unemployment, where people give up looking for another job, leaving them reliant on the welfare state.

Causing deflation in wages, when wage inflation is needed in a healthy economy.

Amazon has built a brand and grasped market share at the expense of making reliable profits that justify the valuation. Amazon e-commerce operates on very tight margins, as does it’s hardware division.

To be valued the same as any other retailer they are going to need to grow their earnings 16 times by using widely used valuation metrics. So why are they valued so high? Innovation and ingenuity is pushing them forward and the stock market loves it. Increasing the social good by relieving people from doing boring cashier jobs, working in a warehouse, or driving delivery vans. Increasing productivity and making a lot of stuff a lot cheaper than it was before.

Add up all their profits since 1994 they still made less than Microsoft made in the fist 6 months of 2016. Amazon web services is the division that makes makes most money (with the highest margins) and subsidises the expansion and growth of Amazon retail. Amazon has never paid a dividend because most of it’s earnings go into growing the revenues.

Is there a cure for Amazon fever, we think so

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A bet on geopolitics and history in the making

Historical events don’t always have to come out of a book, or be taught in colleges and universities. People around the world enjoy reliving history.  Dressing and acting like people did from times long past no doubt make historical events come alive.  Events from the past have provided copious inspiration for film, music and books based on true stories, and using historical fact to weave stories around.  Two examples, before we enter this post.  Jaws the film was an incredible success for director Stephen Spielberg.  Jaws the book by Peter Benchley, was based on the Jersey Shore shark attacks of 1916.  A panic stricken beach town caused by one shark attacking multiple people inspired one of the best known film stories of all time.  I bet you didn’t know the book about Norman Bates called Psycho was later made into a film, but, the book was actually based on a real murderer called Ed Gein.

Historical events happen all the time, but, there as some monumental events happening right now. Not just Brexit, Donald Trump insulting another journalist, Vladamir Putin playing grand piano as he waits for the Chinese Premier Xi Jinping at the “One Belt, One Road summit”.  Rather events that your children’s, children may study in the future but not from a school curriculum.  This post will review big things happening in geopolitics, economics and how it’s going to affect financial markets.

In the lifetime of most people the United States of America has been a leading global superpower. Affecting our culture from everything from Breakfast cereals to Televisions shows, sorry television programmes, and children’s toys.  Not to mention the functioning of politics, pensions plans and other financial institutions.  The Hollywood film industry is (or rather the industry as a whole) is arguably one of the most powerful industries in the world, with the power to inspire and influence peoples ideas, lifestyle choices and emotional biases.

Could this be the beginning of the end of America being the worlds leading superpower?

American has provided security and stability to a lot of countries by providing intellectual and financial capital for financial systems, institutions and contributions to countless technological breakthroughs.  Any big change to this will have big consequences for anyone thinking about where to place their bets for growing their wealth.  Let’s take a look at the bigger picture.

Since the Bretton Woods Agreement after World War Two the United States Dollar has been the worlds dominant reserve currency. US Dollars where lent to countries damaged by war to build infrastructure again so that society would function properly. A good idea, which especially helped the United States, because it developed the world economy and promoted North Amercian economic and political values. Values which they gained originally from Europe (and the rest of the world before that). Great news for the World Economy as it developed a stable system allowing countries and individuals to trade and prosper. Part of the agreement stipulated oil had to be traded in Dollars. So if you need oil for industry or whatever you have to buy dollars to trade it. The reserve currency status also meant dollars where the preferred currency to trade goods and services in the global economy.

Soviet representatives attended the conference. They declined to sign off on the final details of the plan. Labeling the institutions created by the agreement to be branches of Wall Street. Which of course they are / where. Institutions created by the USA and United Kingdom where the International Monetary Fund and the World Bank.

The IMF’s Articles of Agreement state: the IMF is ” to promote international monetary co-operation, international trade, high employment, exchange-rate stability, sustainable economic growth, and making resources available to member countries in financial difficulty. ” All good things right? They hold a fund made up of Special Drawing Rights which consist of a basket of other currencies that can be used to help stabilise member nations using liquidity (cash injections).

Other things that came from the Bretton Woods Conference where the instigation of freely floating currencies and the idea that it’s better to reduce trade tariffs to promote trade. Relative to before Bretton Woods the world economy is almost a completely free trade system now with low tariffs being standard practice.

Agreements ratified at Bretton Woods encouraged many countries around the world to use dollars for trade. This financial model has worked well and allowed a lot of people to benefit who would not have if a plan had been signed off based on the principles of the Soviet era. Many advances in technology, medical sciences, welfare systems would not have happened had it not been for this system. For normal people, this means no more having a toilet in the shed in the back garden, hot water, a General Practitioner to help with your ailments, a pension, money if your your boss cuts you loose from your job as well as other welfare benefits and many more things like, iPhones, GPS so you don’t get lost,  free online software, shops with almost anything you could want, and doctors with almost any drug required to help you live longer. Let’s not forget the option to travel almost anywhere in the world for a holiday or vacation.  Of course the list goes on.

Betting on Geopolitics

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