Epsilon » Blog http://www.epsilonfbd.com Financial and Business Development Fri, 19 Dec 2014 20:43:31 +0000 en-US hourly 1 Knightsbridge Tankers Limited: 34% Upside, Minimal Downside http://www.epsilonfbd.com/2014/08/04/knightsbridge-tankers-limited-34-upside-minimal-downside/ http://www.epsilonfbd.com/2014/08/04/knightsbridge-tankers-limited-34-upside-minimal-downside/#comments Mon, 04 Aug 2014 16:28:33 +0000 Michael Lee http://www.epsilonfbd.com/?p=12393 more »]]> Knightsbridge Tankers Limited (NASDAQ:VLCCF) is at a very opportunistic crossroad at present. After a recent tumble from its $16.00 high in early June, the stock appears to be settling near multiple significant support levels:

Horizontal price support at the $11.00 level:

The stock has previously used the $11.00 price level as a point of both significant support and resistance. As shown on both daily and weekly charts below, most recently, the stock broke out above this prior resistance level in early March and has since used this level as strong support (in mid to late April). It is worth noting also, on its weekly chart that the stock used the $11.00 level as support in late 2012 and eventually fell below this level in April, 2013; only to break back above the level in March, 2014, as mentioned above.

200-day simple moving average support at $11.09:

The stock broke below its 50-day SMA (simple moving average) last October, only to then test its 200-day SMA about a month later. As seen in the daily chart below, the stock used its 200-day SMA as support, pivoting from the level in December and beginning a new uptrend. A similar pattern can be seen currently, with the stock trading just above its 200-day SMA.

R1 support (yearly) at $10.92:

As most technical traders know, pivot point support and resistance levels can be very useful when attempting to predict a change in a stock’s direction. Without going into a full explanation of pivot point levels and their uses, it should be noted that, on its weekly chart, Knightsbridge Tankers Limited is trading just above its yearly R1 resistance/support level. As you can see, the stock tends to use its pivot point support and resistance levels as areas of strong support or resistance. As such, and as mentioned, it is worth noting this third level of support along with the other two mentioned above…

Read the full article at Seeking Alpha.

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“Link Dollar to Gold now or face another Great Depression” – Forbes http://www.epsilonfbd.com/2014/06/10/link-dollar-to-gold-now-or-face-another-great-depression-forbes/ http://www.epsilonfbd.com/2014/06/10/link-dollar-to-gold-now-or-face-another-great-depression-forbes/#comments Tue, 10 Jun 2014 19:02:22 +0000 Michael Lee http://www.epsilonfbd.com/?p=12201 more »]]> This post was contributed by guest author, David Lee:

World-renowned billionaire Steve Forbes gave stern warnings to the Fed in a book he released late last month. Considered to be one of the U.S.’ most influential financial experts, Forbes said that the U.S. would likely face another economic disaster if the Fed’s aggressive paper money printing didn’t decline, and that going back to the gold standard was the only way to prevent another Great Depression.

In Forbes’ book titled Money: How the Destruction of the Dollar Threatens the Global Economy — and What We Can Do About It, he blames the Fed’s monetary policies as a result of high unemployment, inflation of food and fuel costs, demolition of personal wealth, and volatility and currency crises.

“(The Fed’s) vastly misguided monetary policies are now setting the stage for a new economic and social catastrophe, one that could rival the financial crisis and horrors of the 1930s,” Forbes wrote in his book that was published just last month. “The Fed should have only two tasks: keeping the dollar fixed to gold and dealing quickly and decisively with panics.”

In order to survive Forbes’ foreseeable destruction of the dollar, the Billionaire said that investors should consider owning physical gold, treasury inflation protected securities, and index funds.

It won’t be easy going back to the gold standard, however. In a news article written by Adrian Ash, chief researcher for the articles posted on BullionVault’s site he said that getting a gold standard law past congress would be extremely difficult, what with the current setup of the U.S. economy. A return to it means restricting economic growth and dealing with a gold price of more than $10,000 per ounce.

The U.S. economy has been under several gold standard systems, with the Bretton Woods System, which lasted from 1945-1971, experiencing very little economic crises. During this time, the dollar’s connection to the yellow metal ensured its success, only staggering at the beginning of the Vietnam War.

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Gold And Silver, Taxes And What To Expect In 2014 http://www.epsilonfbd.com/2014/01/07/gold-silver-taxes-expect-2014/ http://www.epsilonfbd.com/2014/01/07/gold-silver-taxes-expect-2014/#comments Tue, 07 Jan 2014 19:01:55 +0000 Michael Lee http://www.epsilonfbd.com/?p=11794 more »]]> After a dismal 2013, both gold and silver gave metal investors some hope with their optimistic bounce at the turn of the New Year. As of this writing, both the SPDR Gold Shares (GLD) and iShares Silver Trust (SLV) are up over 2%. Not a bad start to the year. But will this continue or is this just a dead cat bounce?

Let’s first discuss how horrible of a year 2013 was for those who were long gold and silver. The returns were dismal; gold fell 28.83% in 2013 and silver fell 35.90%. Respectively, for those invested in related ETFs, SPDR Gold Shares fell 28.83% in 2013 and iShares Silver Trust fell a whopping 37.47%. This horrendous annual return is only matched by gold’s 32.76% plummet in 1981 (source).

I’m an optimist and, though I trade both gold and silver on both the long and short sides of the trade, I truly am hopeful that gold and silver will spike in 2014, washing out their 2013 plummets.

Based on historical data, however, this is unlikely for gold. As we look at the annual returns of the yellow metal throughout the last century, after a significantly poor year, gold doesn’t snap back the following year as some might assume. In fact, historically, after an annual return of -20% or more, gold returns an average of only about 2.75% the following year. To offer some examples, after gold’s 1975 return of -24.20% the metal returned -3.96% the following year (1976), after gold’s 1981 return of -32.76% the metal returned 11.75% the following year (1982), and after gold’s 1997 return of -22.21% the metal returned 0.57% the following year (1998) (source).

So, not to take the wind out of gold bugs’ sails, including myself, but historical statistics suggest we may see a lackluster year in 2014. Silver may be a different story, as the metal could rise not only on stabilizing precious metal demand but industrial demand as well, but we’re going to need to see some serious economic growth for that to happen, and I don’t think we’re there quite yet.

So why have we seen such a strong bounce in gold and silver the first couple trading sessions? My answer: taxes…

Read the full article at SeekingAlpha.com.

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My Portfolio Returned 38.29% This Year, Here’s What I’m Doing For 2014 http://www.epsilonfbd.com/2013/12/04/portfolio-returned-38-29-year-heres-im-2014/ http://www.epsilonfbd.com/2013/12/04/portfolio-returned-38-29-year-heres-im-2014/#comments Wed, 04 Dec 2013 19:24:49 +0000 Michael Lee http://www.epsilonfbd.com/?p=11688 more »]]> Equities have performed very well this year. That’s no secret. As of this writing, the S&P 500 (SPY) is up over 23% YTD and the Dow Jones Industrial Average (DIA) is up around 20% YTD. My 50-equity portfolio, however, has significantly outperformed both.

Some time ago, I read James P. O’Shaughnessy’s book, What Works on Wall Street: A Guide to the Best-Performing Investment Strategies of All Time. It’s a good read; informative but a bit dated and the findings have been debated by many. But I have adapted the findings of this book to my own long term strategy and have achieved exceptional results this year.

For those who have not read What Works on Wall Street: A Guide to the Best-Performing Investment Strategies of All Time, O’Shaughnessy used a systematic, fundamental approach, compiling 45 years of S&P Compustat market data to research the performance of many different long term investment strategies. As expected, he concluded that some produced significantly greater returns than the S&P 500 while others produced less…

Read the full article at SeekingAlpha.com

 

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Guest Post: Influence of Catalysts on Investment in Energy Companies http://www.epsilonfbd.com/2013/08/03/guest-post-influence-of-catalysts-on-investment-in-energy-companies/ http://www.epsilonfbd.com/2013/08/03/guest-post-influence-of-catalysts-on-investment-in-energy-companies/#comments Sat, 03 Aug 2013 22:38:00 +0000 Michael Lee http://www.epsilonfinancial.com/?p=10682 more »]]> When it comes to investment in the energy sector, there are a number of areas to look out for. Certain events and announcements can have a major effect on how the stocks work. For instance, drill results, production news, resource estimates, green ventures and similar news can greatly influence stock markets (for better and worse).

These incidents are often termed as ‘catalysts’ for growth of energy companies. Like in the case of Texas, the deregulation of energy providers was a major catalyst. Since then, there has been a dynamic shift in the energy stocks, and numerous investment opportunities have also emerged.

The idea is to know which catalysts have the largest effect on small and large cap energy companies and also identify upcoming news that can offer fruitful return in the energy sector.

As of now, oil and gas is experiencing an interesting phase. The small caps are worthy of attention since there are a lot of catalysts spurring growth in the area. Then there are the expansion plans and installation of solar panels in Texas and other pro-alternate energy areas.

At the moment, large institutional investors have focused more in oil, gas, renewable sector and less in uranium.

When it comes to large companies, earning announcements are important. The recent one by Anadarko Petroleum Corp (APC-NYSE) and Southwestern Energy Co (SWN-NYSE) in Texas is a good example. SWN in particular has expanded its drilling activities and is harvesting oil and natural gas reserves in U.S.

As far as the trend with private institutions is concerned, there is increased focus on alternative energy. With the Obama administration announcing the energy plan with focus on climate changes, private institutions are now being encouraged.

Consumer benefits are also driving catalysts for energy companies. Texas electricity companies are offering reduced rates on natural gas, thermal, and wind power. With so many options to choose from, the energy sector is getting a major boost in Texas and other states. Announcement about any new project is met with a good day at the stock market.

In the case of small cap energy equities, drill results are an important parameter to look out for. The results control about 9.6% average stock movement. Furthermore, if companies announce further drilling on the producing site, a further 8.8% advantage can be obtained.

Shifts in the stock take place when there are announcements that investments are being made by a strategic partner or a bank. It can bring in a change of about 8.5% in the stock.

As opposed to small cap energy equities, large companies will result in low fluctuations. Those above $5 billion don’t move frequently while for under $500 million companies, caps tend to move a lot.

Geopolitical factors also manage stock conditions. For instance, Japan’s election of new Prime Minister has directly affected the companies managing nuclear power. This is because the new premier is a proponent of nuclear energy. The announcement had a positive impact on Uranium Energy Corp. (UEC: NYSE), which is hoping to bring its Goliad Project in Texas online this August. This indicates that an eye should be kept on the progress of nuclear reactors in the U.S.

Investors who are interested in long term investment opportunities and long term growth should focus on large cap energy companies since their share prices are not amenable to volatility (http://www.epsilonfinancial.com/2012/11/15/need-a-hedge-against-falling-markets/). They should also give importance to catalysts for better returns.

 

Author Bio:

Kristen Francis Willis is a Financial Consultant by profession. From time to time, she does some side business with her photography skills. She loves taking pictures, capturing every moment means a lot to her. She’s currently building her reputation as an online writer with the help of PFMP.

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Get Ready to Buy Gold and Silver, at Least Short Term http://www.epsilonfbd.com/2013/06/20/get-ready-to-buy-gold-and-silver-at-least-short-term/ http://www.epsilonfbd.com/2013/06/20/get-ready-to-buy-gold-and-silver-at-least-short-term/#comments Thu, 20 Jun 2013 18:14:05 +0000 Michael Lee http://www.epsilonfinancial.com/?p=10495 more »]]> Oh how I wish I would’ve been short gold and silver today (June 20, 2013). I had liquidated all positions for safety earlier this week in anticipation of the FOMC meeting outcome potentially moving the markets (and boy did it!). I had a brief moment of bravery yesterday and almost entered a short silver position, but I played it safe.

Of course, I’m kicking myself for not having entered that short position yesterday. But hindsight is 20/20. And realistically, according to technical indicators, which are generally very reliable for the metals, we began the tail end of a short term downtrend earlier this week. I wouldn’t have guessed that the downtrend had so much to give on the downside but one thing is for certain, this short term downtrend will be coming to an end within the next week.

Here’s a look at SPDR Gold Shares (GLD) on daily charts:

gold

As we can see by the chart above, GLD is flirting with its S2 support line. Pivot point support and resistance lines are generally very significant for the metal and, subsequently, for GLD. Pair this information with the fact that GLD is hanging around oversold territory, as seen by the Stochastic RSI indicator at the top of this graph, and it becomes clear that we should be seeing an upside reversal relatively soon.

I have no idea how much GLD will climb once it reverses but I am very confident in one thing, we will see a short term trend reversal very soon. I anticipate consolidation throughout tomorrow and Monday, with a new upside trend forming sometime between Monday and Wednesday of next week. Silver, as it usually does, will likely follow.

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Gold Pierces Pivot Point Resistance And Reenters $1400 Territory http://www.epsilonfbd.com/2013/06/03/gold-pierces-pivot-point-resistance-and-reenters-1400-territory/ http://www.epsilonfbd.com/2013/06/03/gold-pierces-pivot-point-resistance-and-reenters-1400-territory/#comments Mon, 03 Jun 2013 23:40:42 +0000 Michael Lee http://www.epsilonfinancial.com/?p=10405 more »]]> As gold has lost ground in seven of the past eight months, gold bugs have been looking for any kind of sign indicating a rebound for the metal. The recently established double bottom, $1350.00 for gold and $132.50 for SPDR Gold Shares (GLD), has sparked some optimism. But the violent sell-off last Friday, May 31, 2013, did anything but reinforce this optimism.

dbMonday, June 3rd, 2013, however, was a new day and the beginning of a new month. So where is gold headed in June?

Here is my take on what I believe we are likely to see this month and beyond.

On the back of Friday’s sell-off, we saw GLD rebound nicely on decently strong volume (9,126,697) along with gold reclaiming its $1400.00 footing, a significant psychological level for the metal.

I will use SPDR Gold Shares to represent gold’s movements for the remainder of this article.

Aside from this and in my opinion more significantly, Monday’s rebound pushed GLD above its newly established primary pivot point at $135.86, closing the day at $136.51.

Over the past few months GLD has shown consistency and somewhat predictable action near its monthly, primary pivot points.

Primary pivot points are generally used as locations of where stocks or ETFs will find support or resistance. The accuracy of this indicator is debatable but, put simply, traders who use this indicator generally look at the primary pivot area as a place to buy or sell. If the stock breaks above the pivot point, this is generally seen as a buy signal. If the stock consolidates near the pivot point and fails to break above it, this is generally seen as a sell signal. (More information can be found here.)

As mentioned, GLD has shown consistency and a bit of predictability around these areas over the past few months. Illustrated by the graph below, the significant fall below its pivot point in February indicated a further slide for the ETF. After February, GLD has consistently met strong resistance at its respective, newly established pivot points.

ppJune marks a new month and a new pivot point. As mentioned and as shown on the graph above, gold bugs are surely encouraged to see that GLD closed the first day of the month above this pivot point.

So what happens next? Where do we go from here?

I think, based on the recent trading history of GLD, this new pivot point at $135.86 will prove to be an area of significance moving forward. Naturally, I see two possible scenarios:

  1. If GLD moves back below $135.86 throughout this week this will likely signify a loss in price momentum and establish this $135.86 pivot point as an area of significant resistance, as the ETF has done in previous months. As such, if GLD fails to remain above $135.86 throughout this week we will likely see a continued fall, likely through the double bottom level motioned above at $132.50. In turn, we would likely see another negative monthly performance for GLD and the precious metal.
  2. If GLD remains above $135.86 throughout this week this could very well signify a major reversal in the metal and the ETF and establish this pivot point as an area of strong support. As a result, June will likely be a positive month for GLD and the precious metal.

rsiPersonally, I am making no bets at this point. But it is worth noting that we are still a ways away from GLD reaching overbought territory (as shown by RSI below) so the ETF’s current price momentum could very well continue for a week or more before we see another pullback.

Regardless, I recommend keeping a close watch on the pivot point mentioned above. Based on price action around this area, by the end of this week I feel that we will have a clear picture of whether or not June will be the month gold finally begins to shine again.

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Guest Post: Valuable Tips to Keep Your Finances Under Control http://www.epsilonfbd.com/2013/02/22/guest-post-valuable-tips-to-keep-your-finances-under-control/ http://www.epsilonfbd.com/2013/02/22/guest-post-valuable-tips-to-keep-your-finances-under-control/#comments Fri, 22 Feb 2013 20:07:44 +0000 Michael Lee http://www.epsilonfinancial.com/?p=9812 more »]]> Most people will agree that the area of finances is one of the most challenging issues to manage. Keeping your finances under control involves a lot of discipline and determination to accomplish. Financial freedom can be achieved when your finances are kept under control. Here are some ways you can manage your finances well.

Set a budget. Having a budget will help you spend wisely. Once you receive a pay check, be intentional in where you put your money—from your bills to your grocery and other expenses. Setting a budget doesn’t mean depriving yourself, it only means that you are fully aware as to where your money is going and you are conscious of your spending. Budgeting gives you a clear picture of your finances and prevents you from overspending.

Pay yourself first. This simply means, saving. For all the efforts you’ve put into working, you need to pay yourself. Allot a certain percentage for your savings that you can use in case of emergency or even for leisure. Having savings is like having a breathing room that gives you financial freedom knowing that if anything goes wrong you have back up money you have access to.

Clearly determine your needs and wants. Here is where finances usually get out of control. Usually people spend for their wants first before their needs. This is very tricky because needs and wants are the only things that dictate your spending and if you don’t categorize this clearly you will end up spending for things you do not need. When you have clearly identified your needs and your wants, you can allot your money wisely. Make sure that you take care of your needs first before your wants.

Cash over credit. Financial downhill starts with uncontrollable spending that is brought about by a single swipe of a plastic card. Credit cards give you an illusion that you have more money to spend. However, this can cause financial problems for you if you can’t control your credit card usage. To avoid this, pay in cash instead of swiping your card. Cash purchases will give you control over you money better. It will also help you assess how much you have left to spend.

Live within your means. This may be a cliché but living within your means will help you manage your money well. It allows you to assess how much you have to live by based on how much you are earning. Living below your means is even better because this gives you allowances in your finances. When you do this you prevent yourself from going overboard with your spending. You become more discerning with your purchases and you are able to balance your check book better than ever.

The good thing about finances is that its management is entirely dependent on you. It means that it can be controlled. The direction of your finances is determined by how you use it. The only time it can control you is when you let it. Start with small adjustments because keeping finances in check might mean a change in lifestyle that you are not prepared for. Once you’ve get pass the small adjustments you can proceed with the major ones.

 

Author Bio:

Kristen Francis Willis is a Financial Consultant by Profession. From time to time, she does some side business with her photography skills. She loves taking pictures, capturing every moment means a lot to her. She’s currently building her reputation as an online writer with the help of PFMP.

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Gold: Is The Death Cross Really A Golden Cross? http://www.epsilonfbd.com/2013/02/21/gold-is-the-death-cross-really-a-golden-cross/ http://www.epsilonfbd.com/2013/02/21/gold-is-the-death-cross-really-a-golden-cross/#comments Thu, 21 Feb 2013 17:58:37 +0000 Michael Lee http://www.epsilonfinancial.com/?p=9799 more »]]> Since Apple, Inc. (AAPL) met its death cross (definition below) in December last year the stock has fallen over 21%, from $545.00 to its current $450.00 price level. When it occurred with Apple,this technical trend signal was so widely publicized that the media seems to now have a deathly (pun intended) fear of the event, regardless of its validity.

Before we look at gold and its impending death cross, the purpose of this article, let’s first define what a death cross is:

A death cross occurs when an equity’s 50-day simple moving average (SMA) (short-term movement) falls below its 200-day SMA (long-term movement). This is widely known in the technical trading world as a bearish indicator, telling traders that price movement is reversing trend to the downside. Naturally, this is generally a strong sell signal. Here is a graphical example of the death cross, illustrated by the graph for Apple, Inc. as discussed above.

As you can see, and as mentioned above, when Apple, Inc.’s 50-day SMA crossed below its 200-day SMA the stock was trading around $545.00. Since the cross, a bearish indicator, the stock has declined over 21%, to its current $450.00 price level…

Read the full article at seekingalpha.com/article/1209891-gold-is-the-death-cross-really-a-golden-cross?

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Gold: What Support And Resistance Tell Us http://www.epsilonfbd.com/2013/02/19/gold-what-support-and-resistance-tell-us/ http://www.epsilonfbd.com/2013/02/19/gold-what-support-and-resistance-tell-us/#comments Tue, 19 Feb 2013 19:46:29 +0000 Michael Lee http://www.epsilonfinancial.com/?p=9783 more »]]> With the speculation surrounding gold recently, many investors are wondering whether to buy, sell, or hold. As with all investments, the answer grossly depends on your time frame.

First let’s take a look at where gold is currently, via one-year and two-year time frames:

A number of factors, including a strengthening U.S. dollar, a stabilizing world economy, and the absence of Chinese gold demand during its Lunar New Year holiday last week have driven gold to a six month low, closing just above $1,600.00 last Friday.

This recent sell-off can also be partially attributed to the market’s reaction to institutional investors George Soros, Julian Robertson, and Allianz’s Pimco reducing their stake in SPDR Gold Trust (GLD) in the fourth quarter of 2012. (More info can be found here.)

Naturally, the culmination of all of these factors has left gold investors feeling a bit unsettled…

Read the full article at http://seekingalpha.com/article/1201881-gold-what-support-and-resistance-tell-us

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