Our new zero-interest-rate world

Welcome to a world of zero (and negative) interest rates…

From Standberry Digest, 2/17/15

We've been covering this topic at length in recent Digests. Central banks around the world are cutting interest rates… And today, we have nine major sovereigns with negative yields. The Wall Street Journal reports that 16% of global government bonds now sport negative yields.

Blue-chip companies like software icon Microsoft and consumer-products legend Apple are issuing long-term debt at rates below 1%. Swiss food giant Nestlé issued debt maturing in a little more than a year with a negative yield. In other words, investors are paying Nestlé to borrow their money.

 Most of the negative sovereign yields are in Europe today. Certain durations of German, Swiss, French, and Danish bonds (to name a few) all sport negative yields. The European Central Bank just initiated quantitative easing, purchasing 60 billion euros of bonds a month, which is part of the reason yields are plunging.

And corporations are flocking to the European debt markets to tap cheap financing. This year, American companies have raised 11.65 billion euros of bonds, the busiest start since 2008, according to Bloomberg. And several blue-chip American companies hold European debt with negative yields. From Bloomberg…

New York-based Philip Morris, the world's largest publicly traded tobacco company, has 750 million euros of 5.875 percent bonds due September that yield 0.154 percent. Notes due June 2016 issued by McDonald's, the world's largest fast-food chain, yield 0.163 percent, according to Bloomberg data.

 American firms are also turning to Switzerland, which is outside of the European Union. As we discussed in the January 15 Digest, Switzerland's central bank – the Swiss National Bank – pushed interest rates negative after it unpegged the franc from the euro.

Despite the negative rates, the franc still grew stronger… and yields remain depressed. More from Bloomberg…

Of General Electric's 10 Swiss-franc bonds, seven yield less than zero, with its 625 million francs ($671 million) of 2.25 percent notes due December 2016 yielding minus 0.242, according to Bloomberg data. Philip Morris's 325 million francs of notes due December 2016 yield minus 0.071 and McDonald's 250 million francs of 1.875 percent notes due June 2016 yield 0.063 percent.

 Yields are depressed and will likely stay low for a while. For one, there isn't much growth around the world today. And deflationary pressures (like the price of oil falling in half) are dominating the market.

Plus, thanks to quantitative easing, trillions of dollars of capital are looking for safety today. And that money is pouring into high-quality corporate and sovereign debt. As we've seen, investors are so desperate for safety – and apparently devoid of other opportunities – they're happy to pay a small annual fee just to make sure they get their money back.

 

“Dinero grande” en #Wall Street, parte IV

Las anomalías

Una “anomalía”, en el contexto financiero, es un comportamiento especial de los mercados bursátiles que permite anticipar la dirección del movimiento de los precios de las acciones, proveyendo, de esta manera, una excelente oportunidad de obtener mejores resultados.

Existen muchas anomalías bastante conocidas por la mayoría de los inversionistas:

La anomalía de los inversionistas internos. Dado que los ejecutivos de las corporaciones tienen información privilegiada sobre el comportamiento de las finanzas de las empresas que administran, ellos compran sus acciones cuando las perspectivas son positivas y venden cuando no lo son. De esta manera, al seguir su ejemplo: comprar cuando ellos compran y vender cuando ellos venden, se obtendrán resultados superiores.

Otra anomalía consiste en que las pequeñas compañías generan mejores resultados que las grandes corporaciones. Esta anomalía se presenta principalmente en el primer mes del año,  por lo cual se le conoce como el “efecto enero”.  

La anomalía de las pequeñas corporaciones olvidadas enseña que las empresas que no son muy apreciadas por los grandes inversionistas institucionales generan mejores resultados que aquellas que son ampliamente transadas por ellos.

Existen muchas otras anomalías similares a las anteriores. Sin embargo, la gran mayoría de ellas ya no genera mejores resultados debido a que son ampliamente conocidas, y son tantos los inversionistas que tratan de aprovecharlas, que ellos mismos neutralizan su efecto.

Lo interesante del tema de las anomalías es que los primeros inversionistas que las descubren sí pueden lograr grandes beneficios con ellas, mientras el conocimiento se mantenga dentro de un grupo reducido.

La conclusión a la que quiero llegar es que sí existen formas de lograr resultados extraordinarios para ganar #dinero-grande, si se descubren nuevas anomalías en su etapa temprana.

De eso se trata el proyecto “Dinero grande” en Wall Street.