News Analysis: Coffee was the Investment Return Leader for the year, thanks to changing weather conditions and increased customer demand for the brew. If one looks carefully, he or she will see that as to Investments in 2014: All that glittered was not gold [but brown and black].
It is interesting to note that most commodities nose-dived in the on-going World-Wide Economic Slump, as did many financial instruments of many types.
Low interest rates allowed many corporations to borrow funds for repurchase of their stocks; thus boosting their prices. Since there is really little, in terms of economic prosperity, of demand for manufacturer’s goods, one can see an artificial economic bubble growing in size and based on mere holograms [for current Stock Markets]. Stock Markets love ‘Freiers’.
In 2015, as we have stated previously, Commercial Aircraft Manufacturers will have had their “Golden Fleece” taken from them i.e., the high prices of Aviation Fuel. Along with this, the Sukhoi Superjet 100 Aircraft, with Italy’s Alenia Aermacchi, [which is currently Aviation Agencies’ Certified and flying] will cut into “Single Aisle” Jet Sales of the two Major Airframes. At approximately 35-40 percent of cost to Airlines, why pay more?
Along with this, the Chinese Single Aisle, C919, was just Chinese Aviation Agency Certified, and will cut into the grossly profitable sales manufactured by the other Major Airframes.
Downstream, the Chinese/Russian Joint COMAC 929, 290 Passenger Jet, and COMAC 939, 390 Passengers Jet are being developed. The availability of funding for these projects by Chinese and Russian interests does NOT bode well for the existing two Major Airframes. Both, will “Pooh-Pooh” any suggestion of their losing market share [and huge profits]; they will probably seek government [surreptitious] interventions to reduce the threats. Since America’s greatest monetary export manufacturer will be affected, International Businessmen can sit back and watch the machinations occur as Washington Politicians get desperate.
The long term outlook for both Major Airframes is one of high profit unsustainablility. The estimated $20,000,000.00 the aforementioned Airframe allegedly receives in Local, State, and Federal Grants PER AIRCRAFT, will help attenuate the pain perhaps.
Long term, a strong “Short Position” is warranted by International Businessmen and may be considered.
In 2015. we suggest focusing on Food for Seven Billion+ World Inhabitants; EVERYONE MUST EAT.
Conjoined with this idea, is that Climate Change should be carefully evaluated for geographic realities in regards to droughts, rainfalls, severe weather, etc. thus affecting global food production.
There are other key areas in which to focus one’s evaluations and monies on for 2015 and beyond. To those who consult with us, we will be more than happy to share our analyses. To those who have obviously listened to their Financial Bankers, Brokers, and Gurus, we can only say: The Losing Investments outnumbered the Winners by a substantial margin. These ‘Masters of the Universe’ fates for 2014, in following the herd, have already been sealed, unfortunately for them.