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Author: globalmacroboy

Tractor Supply ?>

Tractor Supply

Summary TSCO is the leader company in its niche. Their shares have been hit during the last months, losing a ~36% since June 2016. The company has some moats that are protecting it from competitors and still has room to expand the business abroad the US and internationally, and its acquisition of Petsense is going to diversify the business and help to improve revenue. Financially the company is strong, delivering great returns and margins, maybe helped by the industry tailwinds…

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Betting on US defense ?>

Betting on US defense

As we all knew, Trump wants to hike the defense budget to $639B from $587B and, as global macro investor, I’m trying to identify who’s going to earn that money. Right now I’m analizing the industry to see which one of the companies that composes that will increse more its contracts. But, to sa something clear, I can say that I won’t probabl bet on aeronautics companies at the moment as NASA has seen that part of its budget cut…

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Looking for 2017 macro opportunities ?>

Looking for 2017 macro opportunities

During this week I have opened 2 long positions, in gold and in the EUR/USD (I’m going to explain wh in this entry). I’m also looking for a long in the GBP in the mid/long term due to the growing inflation in the UK and because we all know that the BoE traget is a 2% (and, if inflation keeps going to this rythm, we’ll see an aprox 2.8% at the end of the year). I also think that Carney…

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Long USD ?>

Long USD

I’ll open a long in the USD as by macro I expect a rate hike this month or early next year because of the following things: 1- Inflation is at 1.6%, close to the 2% that the FED has stablished as a perfect inflation rate. Recently OPEC has agreed (or at least they are in advanced talks about it) to cut oil production, so inflation will boost as oil prices are going up because of the lower production. 2- At…

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Tesla’s living on borrowed time ?>

Tesla’s living on borrowed time

The company is not able to generate positive FCF in a yearly perspective. Elon Musk is a good inventor and seller, but a bad CEO. Competitors will erode Tesla’s business. The Solar City merge is going to create a negative FCF and debt monster. Financial analysis: Taking a look to the income statement, we can see that the company is increasing its income at a 66% rate, but that their total cost of revenues is increasing by a 67% yoy….

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Short EUR/USD ?>

Short EUR/USD

During this week we have seen how the ECB president (Mario Draghi) has said that he has no hurry in diminishing its QE in the Eurozone. After saying that, the Euro lost some strenght against other currencies as this it’s seen (despite saying that the Eurozone economy is healthy) as a lack of economic strenght in the Euro area, as it is facing right now, two major concerns: The Deutsche Bank problem, that is affecting the EU right now, as…

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Short Deutsche Bank and Long on VIX ?>

Short Deutsche Bank and Long on VIX

This is a fast afternoon post showing two not too much developed ideas to hedge the portfolio. So, the title says it all, that’s my hedge strategy for the remainder of the year. Let’s see why. First of all, we have Deutsche Bank (from now ‘DBK’), that’s in my opinion, more dangerous than any Italian bank. The problem with DBK is that, despite all their efforts to restructure the bank and reduce costs profit is sinking. We also have the…

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Stock picking in the UK ?>

Stock picking in the UK

Well, we’ve seen this morning something that even markets thought that was impossible, UK citizens have decided to leave the EU. I wrote about it before and I recommended hedging your positions, and I can say it has worked (at least for me). Volatility as been really really high, even higher than I expected to be honest. Now, what am I going to do? Well, the thing is simple, I will wait until the sell-off stabilizes, and until that happens,…

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Mid year market overview ?>

Mid year market overview

We have recently seen how US stock markets have reached an historic top. In my opinion that has been provoked by the lack of greater returns in any other safer asset. We can see that in many economies interest rates are below zero, in an effort by central banks to increase inflation. That has not been effective as we can see in the Eurozone for example. Keeping interest rates below zero has also had an impact in fixed income returns, that…

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Why a ‘Brexit’ would be a bad business for both the UK and EU ?>

Why a ‘Brexit’ would be a bad business for both the UK and EU

The world is worried about a ‘Brexit’, that will take place this June 23, when Britons are going to decide if the want to remain in the European Union or leave it via a referendum. As can be seen in the following picture (a chart created by Bloomberg), the results are going to be really close and it seems that those people who are undecided are the ones who are going to decide the final result.   But what is…

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