Glencore, the once poster child of the roaring commodity boom gone awry, was recently in the news for the wrong reason. Bloated with massive debts, a result of over bullishness in acquisition of high priced resource based assets, Glencore's share price has bounced off its lows, though still very much lower than its peak.
A collective sigh of relief not just from the highly strung financial markets, but Glencore's multitude of lending banks. But are the troubles truly over?
History do provide an interesting observation. In every bull market there is always a hot new stock.
But like the shooting star in the dark sky, the illumination is intense but short.
In the Subprime crisis in yr 2008, Lehman brothers was the poster child.
In the Internet bubble of early 2000, Canadian telecoms giant Nortel degenerated into a wimp of a company post crash
And in the Asian Crisis, Aokam Timber, the blue eye boy of the over exuberant investors sunk into the abyss.
And for those of a certain vintage, you might remember Pan El, a company that left many an investor in deep freeze.
Monday, October 12, 2015
Monday, October 5, 2015
MoneySense#9 El Dorado (5 Oct 2015)
Today, we read about a lady who bought an insurance policy where the annual premium payment was significantly higher than her annual income. Was this untenable situation due to her ignorance, greed or the misdemenour of her adviser? Only the parties involved will know the truth.
Just last week, a wine investment fund went awry, and one investor aged 65 was quoted that he needed to find a job, now that his liquid investment has literally gone down the drain.
And what about the unreal guaranteed returns from property investments in Brazil, to implausible promised returns on gold and if some might recall in an earlier period, the wonders of investments in Ostriches, with its professed multi usages!!
Where does one draw the line between genuine investment risk and blind greed?
Contentment and stewardship with and of one's blessings will go a long way towards curbing many of these misadventures.
And a reality check that not everyone will have a blissful retirement just because one wishes for it will ensure that one do not fall prey to the delusions "hawked" as retirement planning, that in reality is a trapdoor to an even longer slog, to make up for the losses lurking round the corner.
Sadly, with the specter of rising interest rates and corporate bond defaults rising, a fate not necessary worse than death, but could be equally excruciating awaits those who partake excessively in the almost free monies offered by financial institutions, to borrow against the excess value of their properties, to invest in high risk, high yield bonds.
Just last week, a wine investment fund went awry, and one investor aged 65 was quoted that he needed to find a job, now that his liquid investment has literally gone down the drain.
And what about the unreal guaranteed returns from property investments in Brazil, to implausible promised returns on gold and if some might recall in an earlier period, the wonders of investments in Ostriches, with its professed multi usages!!
Where does one draw the line between genuine investment risk and blind greed?
Contentment and stewardship with and of one's blessings will go a long way towards curbing many of these misadventures.
And a reality check that not everyone will have a blissful retirement just because one wishes for it will ensure that one do not fall prey to the delusions "hawked" as retirement planning, that in reality is a trapdoor to an even longer slog, to make up for the losses lurking round the corner.
Sadly, with the specter of rising interest rates and corporate bond defaults rising, a fate not necessary worse than death, but could be equally excruciating awaits those who partake excessively in the almost free monies offered by financial institutions, to borrow against the excess value of their properties, to invest in high risk, high yield bonds.
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