On the annual shareholder meeting of Daimler CEO Dieter Zetsche told that Daimler will restrict his activities to the minimum and what is obligated dude the contractual obligations. The reason for this is the nuclear plans of the Iranian government. Although Dieter Zetsche emphases that these measures are not taken to the Iranian people it are those peopling who suffer the most under these measures. Diamler has a 30% stake in a Diesel manufacturing.
We can conclude that these measures are taken under political pressure. Recently Obama tried to get harder sanctions against Iran because they keep continue to work on their nuclear plans. Last month Lukoil, a Russian oil company, has abandoned his plans to invest in a new oil project in Iran. Also the European largest oil and gas company, Royal Dutch Shell, and Ingersoll, a US company, took equal measures.
According to my opinion it’s very good that people and governments wants to take action against a nuclear threat but on the other hand it is very difficult to take effective measures. Most of the taken measures will generally reflect on the citizens of the country but not on the government or the leaders of the country. The world leaders should better try to solve this problem by negotiating or measures who prevent the country of building a nuclear plant.
I think also that the world should give more power too International Atomic Energy Agency. That should get the opportunity to control every nuclear plant in the world. Countries should give free entry to the staff members of the agency. Countries who don't cooperate should immediately be obligated to cooperate. When the keep refusing there should be taken measures like interdicting the import of building materials for the nuclear plants.
Taken these measures has also a negative consequence to the companies who are investing in these countries. I agree that governments companies obligate to drop their investments in these countries. By investing in these countries you give them the opportunity to build weapons and use them against other countries. This is where capitalism and ethics come together. Company owners should give priority to ethics instead of profit.
Source: http://news.bbc.co.uk/2/hi/business/8619762.stm
vrijdag 9 april 2010
maandag 29 maart 2010
Blog 7: Siemens to boost UK wind turbine industry
Siemens, a German engineering giant announces this week that it will invest between £50 and £100 million in a new wind turbine manufacturing. By doing this Siemens wants to beat his American opponent GE. GE has announced last week that is will build a factory in the UK that produces components of windmills.
The reason for these investments in the UK is the new policy of the UK government. The government has £60 million that they want to invest in port facilities that can be used for offshore windmills. They are also planning to build a green investment bank with a fund of £2 million funds. The UK government wants to increase the capacity of green energy to 32 gigawatts. This results in about 6,000 to 8,000 offshore windmills.
Investing in green energy is according to my opinion one of the best things to invest in. We must take care for the fossil fuels and search for new energy resources like wind energy or solar energy. Investments like this from Siemens and GE should be stimulated by the governments. The European Union has also the same opinion that we must take for the environment and wants to reduce the greenhouse gas by 20% to 2020.
I think that Belgium must take action because on the news you always hear of plans for windmills but in the end it always gets wrong. Every months you can find an article on the news where is written or told that Belgium stays behind. If we all take care for the environment it will result in a better world that is healthier and less polluted.
Source: http://business.timesonline.co.uk/tol/business/industry_sectors/engineering/article7079744.ece
The reason for these investments in the UK is the new policy of the UK government. The government has £60 million that they want to invest in port facilities that can be used for offshore windmills. They are also planning to build a green investment bank with a fund of £2 million funds. The UK government wants to increase the capacity of green energy to 32 gigawatts. This results in about 6,000 to 8,000 offshore windmills.
Investing in green energy is according to my opinion one of the best things to invest in. We must take care for the fossil fuels and search for new energy resources like wind energy or solar energy. Investments like this from Siemens and GE should be stimulated by the governments. The European Union has also the same opinion that we must take for the environment and wants to reduce the greenhouse gas by 20% to 2020.
I think that Belgium must take action because on the news you always hear of plans for windmills but in the end it always gets wrong. Every months you can find an article on the news where is written or told that Belgium stays behind. If we all take care for the environment it will result in a better world that is healthier and less polluted.
Source: http://business.timesonline.co.uk/tol/business/industry_sectors/engineering/article7079744.ece
woensdag 24 maart 2010
Blog 6: Government banks are failing investors
A recent report from DMP Financial showed that over the past 10 years investing funds in the UK have given a return that is below-average performance. Investors who trust their money to the banks are getting disappointed returns. On the first place we find NatWest that is a part of RBS. 95% of their investments over de last 10 years have produced below-average. This was about 4.9% over the last 5 years and 0.3% over the last 10 years. In comparison to the average funds this produced over the last 5 years 5.9% and 2.5% over the last 10 years.
The Natwest spokesman said that the most of their investors are looking for a safe investment without any risk. A consequence of this state of mind is that the return on this investment is very low. On the other hand Matthew Morris of DMP said: These investment funds have reported over the last 12 months very good returns but these returns are used by the banks to give a bonus to their star people.
I agree with both speakers on a certain point of view. I agree that some people don’t want to invest in funds with a high risk and they want a safe investment. By that they are sure that they don’t lose their savings but on the other hand I also agree that the banks give high bonuses to their star traders. These star traders give a high return to the bank but the little investor doesn’t profit of these returns.
I think that the banks should better give a higher return on their funds and a smaller bonus to these traders. The reason for this is that these traders don’t hesitate to praise a certain share. By praising this share the bank will earn lots of money and pay the trader a bigger bonus. These traders want to gain each time a higher bonus. This has a negative influence on the stock-market like we have seen by the recent financial crisis.
Source: http://www.timesonline.co.uk/tol/money/funds/article7060782.ece
The Natwest spokesman said that the most of their investors are looking for a safe investment without any risk. A consequence of this state of mind is that the return on this investment is very low. On the other hand Matthew Morris of DMP said: These investment funds have reported over the last 12 months very good returns but these returns are used by the banks to give a bonus to their star people.
I agree with both speakers on a certain point of view. I agree that some people don’t want to invest in funds with a high risk and they want a safe investment. By that they are sure that they don’t lose their savings but on the other hand I also agree that the banks give high bonuses to their star traders. These star traders give a high return to the bank but the little investor doesn’t profit of these returns.
I think that the banks should better give a higher return on their funds and a smaller bonus to these traders. The reason for this is that these traders don’t hesitate to praise a certain share. By praising this share the bank will earn lots of money and pay the trader a bigger bonus. These traders want to gain each time a higher bonus. This has a negative influence on the stock-market like we have seen by the recent financial crisis.
Source: http://www.timesonline.co.uk/tol/money/funds/article7060782.ece
donderdag 18 maart 2010
Investment masterclass: fight against your instinct to make a profit
Blog 5:behavioral finance
James Montier, strategist at GMO has written a book The Little Book of Behavioural Investing: How Not to Be Your Own Worst Enemy.
In behavioral finance we import sights form psychology to the world of finance. It says that most of the investing decisions are taking by emotions than by logic thinking. By understanding this behavior we can learn to avoid it. This is a new way of investing and is grabbing more attention.
1. The narrative fallacy
Investors are easily won by positive stories however the company may be to expensive and creating bubbles. They still keep investing in it because in the past the company did well.
You should focus on the facts instead of on the past.
2. Overconfidence
When investors had a good run they will have more confidence in their abilities. Like in a casino people who have won will bet more reckless than with their own money.
People should have a discipline to avoid this and stick to their investment budget.
3. Following forecasts
Forecasts are more confident than normal investors and we will follow them blindly even though they are sometimes wrong.
According to James Montier we should ignore these people and their forecasts.
4. Information overload
Some people think that you can beat the market when you have more information than the rest but studies shows that excess information can lead to overconfidence as it makes it difficult to distinguish noise from news.
We should better analyze a few things than try to know everything about an investment.
5. Denial
Investors give more weight to information that appeals to them. Try to look for evidence that your own analyze is wrong.
6. Loss aversion
We often sell a stock that has done well than one that has a bad day. To overcome this we should put a sell and buy target and keep to it.
7. Groupthink
We always buy stocks that the herd buys although we pay these stocks often too expensive. We should better go against the herd and search cheap stocks but it’s difficult to go against the herd.
8. Focusing on outcomes
When decisions are taken on outcomes investors avoid uncertainty. Instead they should focus on the process by which they invest, that’s the only thing we can control.
9. Leave the herd behind and go ahead
This is one of the key’s of financial behavior. Investors are always following the herd, they buy hot stuff on the market although we have seen that is often wrong. We had the technical bubble in the late 1990s and the housing bubble in 2009-2010.
People should search for new shares with a positive future look and invest in these.
I agree generally with his statements about investors although i have some remarks with some of his statements. On the narrative fallacy I agree that you must look at the present but you always must look to the past. The company may have had a bad year dude to a wrong investment or a loss of a big client. The future maybe again hopeful after that bad year
Overconfidence is something that occurs to every one of us. Like James Montier says we should have a discipline to avoid this. According to my opinion we should follow forecasts. These persons have the experience and give useful information. It’s possible that it’s wrong but I think that is an exception.
Information overload is hard to find out. Montier is correct that too much information is difficult to distinguish news from noise but when do we have enough information to decide if that investment is a good investment. On the fifth point that tells about denial is may be correct although I don’t really know if investors will do that. It seems to me that they only use information that supports their opinion. You always have to investigate if your information is correct.
According to my opinion it is correct what is told in the point about loss aversion. We all have difficulties with admitting that we have made the wrong decision. If we build a certain target en keep to it, it will help us to conquer that feeling. This may be correct because when we buy something and is bought by the herd we have a kind of certainty that our investment is safe. The opinion of Montier according to the groupthink is also correct that we often buy these stocks to expensive and we better start searching for other cheaper stock with the same return.
On the eighth point I agree that we only may invest in stocks of companies were we are sure that our invested money is safe. Investing on a base of information that is not correct is always a risk. The last point is hardly the same as the seventh point and you must always look for other stocks that are cheap and give a good return.
Source: http://www.timesonline.co.uk/tol/money/investment/article7060010.ece
James Montier, strategist at GMO has written a book The Little Book of Behavioural Investing: How Not to Be Your Own Worst Enemy.
In behavioral finance we import sights form psychology to the world of finance. It says that most of the investing decisions are taking by emotions than by logic thinking. By understanding this behavior we can learn to avoid it. This is a new way of investing and is grabbing more attention.
1. The narrative fallacy
Investors are easily won by positive stories however the company may be to expensive and creating bubbles. They still keep investing in it because in the past the company did well.
You should focus on the facts instead of on the past.
2. Overconfidence
When investors had a good run they will have more confidence in their abilities. Like in a casino people who have won will bet more reckless than with their own money.
People should have a discipline to avoid this and stick to their investment budget.
3. Following forecasts
Forecasts are more confident than normal investors and we will follow them blindly even though they are sometimes wrong.
According to James Montier we should ignore these people and their forecasts.
4. Information overload
Some people think that you can beat the market when you have more information than the rest but studies shows that excess information can lead to overconfidence as it makes it difficult to distinguish noise from news.
We should better analyze a few things than try to know everything about an investment.
5. Denial
Investors give more weight to information that appeals to them. Try to look for evidence that your own analyze is wrong.
6. Loss aversion
We often sell a stock that has done well than one that has a bad day. To overcome this we should put a sell and buy target and keep to it.
7. Groupthink
We always buy stocks that the herd buys although we pay these stocks often too expensive. We should better go against the herd and search cheap stocks but it’s difficult to go against the herd.
8. Focusing on outcomes
When decisions are taken on outcomes investors avoid uncertainty. Instead they should focus on the process by which they invest, that’s the only thing we can control.
9. Leave the herd behind and go ahead
This is one of the key’s of financial behavior. Investors are always following the herd, they buy hot stuff on the market although we have seen that is often wrong. We had the technical bubble in the late 1990s and the housing bubble in 2009-2010.
People should search for new shares with a positive future look and invest in these.
I agree generally with his statements about investors although i have some remarks with some of his statements. On the narrative fallacy I agree that you must look at the present but you always must look to the past. The company may have had a bad year dude to a wrong investment or a loss of a big client. The future maybe again hopeful after that bad year
Overconfidence is something that occurs to every one of us. Like James Montier says we should have a discipline to avoid this. According to my opinion we should follow forecasts. These persons have the experience and give useful information. It’s possible that it’s wrong but I think that is an exception.
Information overload is hard to find out. Montier is correct that too much information is difficult to distinguish news from noise but when do we have enough information to decide if that investment is a good investment. On the fifth point that tells about denial is may be correct although I don’t really know if investors will do that. It seems to me that they only use information that supports their opinion. You always have to investigate if your information is correct.
According to my opinion it is correct what is told in the point about loss aversion. We all have difficulties with admitting that we have made the wrong decision. If we build a certain target en keep to it, it will help us to conquer that feeling. This may be correct because when we buy something and is bought by the herd we have a kind of certainty that our investment is safe. The opinion of Montier according to the groupthink is also correct that we often buy these stocks to expensive and we better start searching for other cheaper stock with the same return.
On the eighth point I agree that we only may invest in stocks of companies were we are sure that our invested money is safe. Investing on a base of information that is not correct is always a risk. The last point is hardly the same as the seventh point and you must always look for other stocks that are cheap and give a good return.
Source: http://www.timesonline.co.uk/tol/money/investment/article7060010.ece
woensdag 10 maart 2010
Former science ministers make joint investment call
Blog 4: Former science ministers make joint investment call
In the UK former science ministers did a joint call to the next administration to maintain the investment in science. Over the past 10 years the British government has spent more than £6 Billon in science. Lord Sainsbury science minister for 8 years under labour has told that the UK came from a brain-drain to a brain-gain and if the next administration couldn’t resist on cutting in spending in science this will be lost again.
The amount of patents in the UK is increased by 136% over the last eight years. As well as the British companies spent 1.14% of the GDP on research and development. According to Sir Martin Taylor a professor at Manchester University the UK could lose his world class status in science. Science and innovation should be put in the heart of the economic policy.
I fully agree with these ministers. Investing in research a development is according to my opinion the only way to be protected against the threat of the new developing countries like China and India. The European governments should increase each year their investments in R&D. When companies innovate in new products and could sell these on a large scale this will automatically generate incomes and profits. Parts of these profits will be used by the companies to invest in new products.
On the other hand when companies are making profits it also results in a growth of the tax incomes for the government. These incomes could be used to reinvest in R&D and we have completed the economic circle. The government should also give support to university and colleges because these educate the human capital for the future. When people are well educated it’s easier to build a knowledge economy that could produce innovated products.
So we can conclude that investing in R&D the biggest opportunity is to be protected against the new developing countries which produce at low costs.
Source: http://news.bbc.co.uk/2/hi/science/nature/8556515.stm
In the UK former science ministers did a joint call to the next administration to maintain the investment in science. Over the past 10 years the British government has spent more than £6 Billon in science. Lord Sainsbury science minister for 8 years under labour has told that the UK came from a brain-drain to a brain-gain and if the next administration couldn’t resist on cutting in spending in science this will be lost again.
The amount of patents in the UK is increased by 136% over the last eight years. As well as the British companies spent 1.14% of the GDP on research and development. According to Sir Martin Taylor a professor at Manchester University the UK could lose his world class status in science. Science and innovation should be put in the heart of the economic policy.
I fully agree with these ministers. Investing in research a development is according to my opinion the only way to be protected against the threat of the new developing countries like China and India. The European governments should increase each year their investments in R&D. When companies innovate in new products and could sell these on a large scale this will automatically generate incomes and profits. Parts of these profits will be used by the companies to invest in new products.
On the other hand when companies are making profits it also results in a growth of the tax incomes for the government. These incomes could be used to reinvest in R&D and we have completed the economic circle. The government should also give support to university and colleges because these educate the human capital for the future. When people are well educated it’s easier to build a knowledge economy that could produce innovated products.
So we can conclude that investing in R&D the biggest opportunity is to be protected against the new developing countries which produce at low costs.
Source: http://news.bbc.co.uk/2/hi/science/nature/8556515.stm
donderdag 4 maart 2010
Blog 3: Zimbabwe forces foreign firms to give up majority stake.
Zimbabwe forces foreign firms to give up majority stake.
On the 1ste of March a new law comes into effect in Zimbabwe. This law forces foreign-owned companies to sell upon 51% of their stake to indigenous people. If they don’t do it, they may be arrested.
John Robertson told that it was a very bad idea and it makes Zimbabwe less attractive to foreign investors. These investors are much needed in the country that once the bread basket of Africa was called. Today the country suffers under hyper inflation and generally famine. Robertson continued that the law only benefits those who were pointed by the Zimbabwean government.
Also The Zimbabwe Congress of Trade Unions has warned that the new law could have negative consequences. Although the law is good it will probably led to a new minority of blacks who will replace the minority of whites.
According to my opinion this law will only influence the trust of investors negatively. By forcing them to sell upon 51% of their stake the lose control over the investment. They should better force the companies to sell their investment slowly so that they can learn the people of Zimbabwe to do business. On the other hand the people of Zimbabwe aren’t ready to lead a company immediately. The government should better take action to educate them by building schools. These schools will teach them how to lead a company.
Just like The Zimbabwean Congress of Trade Unions told the government creates a new minority of blacks who surely use their power over the companies. I think they will become corrupt and mistreating the people they control.
When you watch the situation as an investor I should definitely not invest in a country where the government decides what a company owner does. They invest their money in a company so it’s logical that they keep control over the investment. On the other hand laws are needed to keep control over the companies but forcing them to sell upon 51% is too much.
Source: http://news.bbc.co.uk/2/hi/business/8542966.stm
On the 1ste of March a new law comes into effect in Zimbabwe. This law forces foreign-owned companies to sell upon 51% of their stake to indigenous people. If they don’t do it, they may be arrested.
John Robertson told that it was a very bad idea and it makes Zimbabwe less attractive to foreign investors. These investors are much needed in the country that once the bread basket of Africa was called. Today the country suffers under hyper inflation and generally famine. Robertson continued that the law only benefits those who were pointed by the Zimbabwean government.
Also The Zimbabwe Congress of Trade Unions has warned that the new law could have negative consequences. Although the law is good it will probably led to a new minority of blacks who will replace the minority of whites.
According to my opinion this law will only influence the trust of investors negatively. By forcing them to sell upon 51% of their stake the lose control over the investment. They should better force the companies to sell their investment slowly so that they can learn the people of Zimbabwe to do business. On the other hand the people of Zimbabwe aren’t ready to lead a company immediately. The government should better take action to educate them by building schools. These schools will teach them how to lead a company.
Just like The Zimbabwean Congress of Trade Unions told the government creates a new minority of blacks who surely use their power over the companies. I think they will become corrupt and mistreating the people they control.
When you watch the situation as an investor I should definitely not invest in a country where the government decides what a company owner does. They invest their money in a company so it’s logical that they keep control over the investment. On the other hand laws are needed to keep control over the companies but forcing them to sell upon 51% is too much.
Source: http://news.bbc.co.uk/2/hi/business/8542966.stm
donderdag 25 februari 2010
Blog 2: Federal Reserve says record-low interest rates needed
The head of the federal reserve Ben Bernanke said in a testimony before the congress that rates of interest will remain low for an extend period. Although the American economy is growing the unemployment remains high.
The Fed has begun undoing some measures taken during the financial crisis. They increased the discount rate to 0.75% from 0.50%. This is the rate which banks must pay to get an emergency loan. The reason for doing it is that the economy is recovering and the sustainable improvements on the financial market.
The most economists do not expect that the Fed will raise his rates for some months. Its fund rate is since December 2008 between zero and 0.25%. This is historically low and the raise from the discount rate has posed some questions about the position of the Fed.
According to my opinion I think that it is good that the Fed gently undoing the measures taken during the financial crisis. In times of crisis you have to take extremely measures but after it you must undo these that the market can recover it self. The fact that the Fed didn’t raise the fund rate may be a wrong decision because when you assure the people that the interest remains low. This can give them the chance to buy things later instead of buying them now.
There is also the budgetary deficit of US government which will rise to a record of $1.56tn according to US president Barack Obama. I understand that the financial crises request never seen measures but the US government stays to invest money in the economy. I think that the market must recover itself and all the bad companies must disappear from the market by going bankrupt. Nobody is investing in a company that is nearby a bankrupt.
Source: http://news.bbc.co.uk/2/hi/business/8534848.stm
The Fed has begun undoing some measures taken during the financial crisis. They increased the discount rate to 0.75% from 0.50%. This is the rate which banks must pay to get an emergency loan. The reason for doing it is that the economy is recovering and the sustainable improvements on the financial market.
The most economists do not expect that the Fed will raise his rates for some months. Its fund rate is since December 2008 between zero and 0.25%. This is historically low and the raise from the discount rate has posed some questions about the position of the Fed.
According to my opinion I think that it is good that the Fed gently undoing the measures taken during the financial crisis. In times of crisis you have to take extremely measures but after it you must undo these that the market can recover it self. The fact that the Fed didn’t raise the fund rate may be a wrong decision because when you assure the people that the interest remains low. This can give them the chance to buy things later instead of buying them now.
There is also the budgetary deficit of US government which will rise to a record of $1.56tn according to US president Barack Obama. I understand that the financial crises request never seen measures but the US government stays to invest money in the economy. I think that the market must recover itself and all the bad companies must disappear from the market by going bankrupt. Nobody is investing in a company that is nearby a bankrupt.
Source: http://news.bbc.co.uk/2/hi/business/8534848.stm
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