Tag Archives: Morningstar

What I learned from Morningstar today

What I learned from Morningstar today

The following is really important info I extracted from the Morningstar today. This is why I read it.

https://itunes.apple.com/ca/app/morningstar-stock-fund-investing./id310716163?mt=8

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Most-Expensive and -Inexpensive CEFs
The next exhibit lists the 10 most-inexpensive CEFs based on three-year z-statistics as of Nov. 30. The z-statistic measures how many standard deviations a fund’s discount/premium is from its three-year average discount/premium. For instance, a fund with a z-score of negative 2 would be two standard deviations below its three-year average discount/premium. Funds with the lowest z-scores are classified as Relatively Inexpensive, while those with the highest z-scores (not shown in the exhibit) are Relatively Expensive. We consider funds with a z-score of negative 2 or lower to be “statistically undervalued” and those with a z-score of 2 or higher to be “statistically overvalued.”

Unhedged: Around one fourth of active and passive world-bond funds leave their overseas currency exposures completely unhedged and, as a result, carry the most currency risk among the three subgroups examined here. From a regional standpoint, half the group focuses on non-U.S. debt while the rest have a global purview. More than half of these offerings focus mostly, if not solely, on government debt. A smaller subset focuses on global or non-U.S. corporates, and just a few are dedicated to global inflation-linked bonds. Therefore, funds in this cohort sport varying levels of interest-rate and credit risk. Given the variety of approaches used in this group, many different benchmarks are employed beyond the broad-based Barclays Global Aggregate and the Barclays Global Aggregate ex-U.S. indexes.

Hedged: The smallest subset (17% of world-bond offerings) comprises funds that fully hedge currency exposures back to the U.S. dollar. These funds, which are mostly global, focus on Treasuries or a mix of Treasuries and corporates, and there are no dedicated high-yield or inflation-protection strategies in the group. Here, investors forgo currency risk, with hedged versions of the Barclays Global Aggregate and the Barclays Global Aggregate ex-U.S. serving as common benchmarks.

Currency Hedging
One possible way of making foreign stocks easier to own is to hedge the currency risk with a currency-hedged fund, such as  Deutsche X-trackers MSCI EAFE Hedged Equity DBEF (0.35%). This fund invests in large- and mid-cap stocks in developed markets overseas and uses currency forwards to hedge its currency exposure. Currency hedging has put DBEF’s volatility on par with U.S. stock funds, like VTI, and improves performance when the U.S. dollar strengthens.

It is important to note that currency hedging does not protect investors from expected changes in currency values. If interest rates are higher in the foreign market than in the domestic market, the forward price should be lower than the spot price such that the effective risk-free return should be the same in both markets. This is a condition known as covered interest-rate parity. While interest-rate parity doesn’t always hold in the spot market, arbitrage enforces this condition in the forward market.

For example, if the risk-free interest rates in Australia and the United States are 4% and 1%, respectively, and the current spot price of the Australian dollar is 1.0 AUD/USD, the one-year forward price should be 0.971 [1.0*((1+.01)/(1+.04))]. If the forward rate were higher than this (say 0.99), investors could borrow in the U.S. at 1%, convert U.S. dollars into Aussie dollars at the spot rate, invest at the Australian risk-free rate (4%), and sell forwards to hedge out the exposure. At the end of the year, the investor would convert AUD 1.04 to USD at 0.99 (USD 1.03), return USD 1.01 to the lender, leaving a USD 0.02 risk-free profit, with no upfront cash outlay. While the market is not perfectly efficient, it generally doesn’t present this type of free lunch.

As a result of covered interest-rate parity, higher foreign interest rates generally increase the cost of hedging. Over the trailing 10 years through November 2015, the effective cost of hedging the MSCI EAFE Index (before taking fees and taxes into account) was actually a negative 61 basis points annually. This is measured as the difference in the return on stocks in the MSCI EAFE Index in their local currencies and the return on a hedged version of the index. In contrast, it cost 166 basis points annually to hedge the MSCI Emerging Markets Index. Because interest rates are currently higher on average in emerging markets than in developed markets, it is generally more expensive to hedge currency exposure there.

Hedging can increase costs in other ways, too. In addition to the higher fees that currency-hedged funds charge, currency hedging tends to reduce tax efficiency. That’s because hedged funds must regularly roll their contracts forward to maintain the hedge, which can trigger taxable capital gains. For example, Deutsche X-trackers MSC

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Morningstar article reports that Greek treasury and empty out by March but definitely by the summer

Morningstar article reports that Greek treasury and empty out by March but definitely by the summer

Unless Syriza caves in, and is helped by face-saving concessions by Europe, Greece risks running out of money by summer or earlier. That looming prospect would have the potential to trigger bank runs and capital controls. If Greece can’t finance its government or banks in euros, it would be forced to print drachmas.

Greece lacks the cash to repay bonds held by the ECB that fall due in July and August. Eurozone officials say that they fear Greece might even run short of cash to repay its IMF loans that are falling due in March, because this winter’s Greek political turmoil has hurt the economy and tax revenues.

Oh joy the days of future are upon us

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From Morningstar article: Hedge strategies commonly used in alternative mutual funds like hedge funds

From Morningstar article: Hedge strategies commonly used in alternative mutual funds like hedge funds

Morningstar article had this gem below!

Any moron does not believe you can learn from major media, is that a moron. Tell them I sent you.

Hedge strategies commonly used in alternative mutual funds include:

  • Event Driven: Based on corporate events, such as mergers, reorganizations, management changes.
  • Global Macro: Focused on macro-economic driven opportunities across numerous markets and asset classes.
  • Long-Short Equity: Seek to buy attractive companies and short sell weak companies; seeks to produce returns while helping reduce unintended or market risks.
  • Relative Value: Look for perceived pricing inefficiencies between markets, companies, or within the capital structure of a specific company.

When interest rates go up bonds will naturally suffer somewhat, as bond prices trade inversely to yield. In my view, equities generally could probably weather the environment, or at least tread water.  However, I think an alpha-seeking approach—use of hedging strategies, for example—has more potential to outperform in a rising-rate environment. Statistical analysis of the historical relationship between interest rates and alpha support this. The graph below illustrates the historic relationship between alpha levels on the Hedge Fund Research Index Fund Weighted Composite Index (HFRI FWI)2 and US five-year Treasury yield levels.

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Morningstar Reviews – Is The Premium Membership REALLY Worth It?

Morningstar Reviews – Is The Premium Membership REALLY Worth It?

I use Morningstar everyday nearly for trading strategy ideas. I am using the Android and Iphone app v1.x but these articles talk about the fire walled v 2 apps.

This leads into the chargeable access for other areas to study. I personally like the newsletter feature but of course I am not paying for it due to my version 1 app. I don’t think the other analysis features would be used. It could be worth it those as it is pretty cheap.

Morningstar Review – The Perfect Service for Value Investors

http://www.stockgumshoe.com/reviews/morningstar-premium-membership/

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Free Matlab? Free Morningstar market data? $105 million profit? How?

Hi there

This has turned into a great week to start with in my strategy development

1. Wow now I can get Morningstar data. Neat!

How to get free MSN Money with new data source with Morningstar newsfeed through XLQ and Excel for dot Net
https://quantlabs.net/blog/2013/06/how-to-get-free-msn-money-with-new-data-source-with-morningstar-newsfeed-through-xlq-and-excel-for-dot-net/
2. Challenged by the high expense of Matlab. We are working on packaging up deployable .NET packaged DLL files for various trading strategies and algos for your platform. All scripting generated from Matlab.
How to get access to your FREE headless version of Matlab to interface with Java or Microsoft .NET C#?
https://quantlabs.net/blog/2013/06/how-to-get-access-to-your-free-headless-version-of-matlab-to-interface-with-java-or-microsoft-net-c/
3. Can you really do this? If you watch it, you would become a believer after these videos. Let me know what you think.
Can you really earn over $105 million in profit in 5 fears by trading options and futures with 2 new hedge funds?

https://quantlabs.net/blog/2013/06/can-you-really-earn-over-105-million-in-profit-in-5-fears-by-trading-options-and-futures-with-2-new-hedge-funds/

Imagine the potential. It is quite huge. I am feeling pretty excited about this direction especially the new data sources I have figured out. With the power of Matlab, you can do some pretty cool things.
It is just over one week away before I close out the current promotion to get $697 in FREE courses from my new Academy.This is a great chance to get access to them by just being a new QuantLabs.net Premium. There are so many benefits! You have until Monday June 30


–> JOIN NOW FOR INSTANT ACCESS TO LEARN THESE ACADEMY COURSES <–

Here is a complete list with videos:


http://quantlabs.net/academy/buy-all-our-courses-in-r-matlab-quanthft-and-trading-software/

Many many Membership benefits listed here:


http://quantlabs.net/quant-member-benefits/

Hope you like all this neat stuff
Thanks Bryan

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How to get free MSN Money with new data source with Morningstar newsfeed through XLQ and Excel for dot Net

How to get free MSN Money with new data source with Morningstar newsfeed through XLQ and Excel for dot Net

This is kind of exciting! More reasons on using XLQ. A message from the vendor:

SN rolled out a new version of their website yesterday (http://money.msn.com/common/now-on-msn-money-new-quote-data-pages), now supporting data from Morningstar.

 

This has not impacted historic data, but has broken the interface for day data. I am still working on the different changes and will announce a new release of xlq as soon as it is ready. There will also be other changes with the data, as symbols for currencies and options and some indexes are different.

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Ever get that intuitive stock market pick? My fave industry trading strategy thanks to Morningstar Apple IOS and Android apps

Ever get that intuitive stock market pick? My fave industry trading strategy thanks to Morningstar Apple IOS and Android apps

You ever sit there a typical high stake poker game and get that feeling this could be a big winner? I do sometimes when I read stuff. I base it on my gut instinct but sometimes proves to be true. The primary source comes my daily digest of the Morningstar app on my Apple iPad. This is something I recommend to people who follow trading. I  like this a source for many things including general market insight and some insider trading tragedy I have never seen elsewhere. I am intending to post these Ina new section in the QuantLabs.net Premium members. I already posted some stuff already on volatile and high frequency data tips. Pure awesomeness if you ask me. Also, note that these postings are not written by me at all so again, the source of these are only from the Morningstar app.

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Morningstar is your best FREE trading news source on Apple iPad iPhone and Google Android devices

Morningstar is your best trading news sourceon Apple iPad iPhone and Google Android devices

That is all I need to say if you are tryly looking for a consolidated news source for free

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NOTE I now post my TRADING ALERTS into my personal FACEBOOK ACCOUNT and TWITTER. Don't worry as I don't post stupid cat videos or what I eat!

Youtube video on my Apple Ipad and Iphone apps I use for trading news and live analysis with Bloomberg, CNBC, Morningstar, WSJ

Youtube video on my Apple Ipad and Iphone apps I use for trading news and live analysis with Bloomberg, CNBC, Morningstar, WSJ

NOTE I now post my TRADING ALERTS into my personal FACEBOOK ACCOUNT and TWITTER. Don't worry as I don't post stupid cat videos or what I eat!

Dear Bloomberg? Now it 4x the reading with this revamped redesign Switch to Morningstar?

Dear Bloomberg? Now it 4x the reading with this revamped redesign  Switch to Morningstar?

I wish they could kept things simple and orderly. Now I feel I got to 4 times the info I used to read daily. Ugh. Do I switch to simpler Morningstar?

NOTE I now post my TRADING ALERTS into my personal FACEBOOK ACCOUNT and TWITTER. Don't worry as I don't post stupid cat videos or what I eat!