by Travis Johnson, Stock Gumshoe | February 18, 2009 5:35 pm
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Source URL: https://www.stockgumshoe.com/2009/02/when-in-doubt-hide-in-switzerland/
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I’m OK with the reasonableness of your technical, fundamental and valuation metrics. I do wish you would pick entries with higher volume (liquidity). Only 3 of the 10 have volumes over my low water mark of 500,000 per day. Also, I expected to see some GOLD, GOLD, GOLD insights by now. Everybodys talking about it.
Gosh, Gumshoe, I really appreciate all that you do for us, and I appreciate the people who post comments, too. I am only a novice and never post, but this time I wanted to let you know you are appreciated. You are the only reliable investment information that I have. I will look into SWZ, thanks. You’re a rock star.
how about some of you true technicians chiming in? does that resemble a head and shoulders?
Well, we may get a little recovery this morning — Nestle was “cautiously optimistic” when they released their earnings overnight and the shares bumped up about 5% in Switzerland, though of course that may not hold.
Sorry to say, but this is a one out of five technicals positive. We buy 4’s and 5’s. Target is $6.00 if it breaks the spread triple bottom at $9.00. Too risky for this old guy.
Technically, both of these funds are risky, but perhaps bottom fishers can buy them here and set a tight stop. Of the two, I like EWL and here’s why. On a candle chart, SWZ just made a new low close….never good. On the other hand, EWL’s candle chart just completed a double bottom IF the 14.33 low close from 11/20/08 holds up. I think it will hold because of the one hour candle pattern. The bullish Three White Soldiers Pattern is indicative of a strong reversal in the market. It is characterized by three long candlesticks stepping upward like a staircase. The opening of each candle is slightly lower than previous close rallying then to a short term high. Friday’s close was 14.64 and a variation of the three white soldiers started at the day’s open. Keep in mind, a one hour chart is very short term. But you could buy EWL here and sell it if it closes below 14.00…..very low risk. On a P&F chart, SWZ is at high risk of a new sell signal at a 9.00 print. EWL faces the same risk on a print at 14.00. Between the two, EWL is the better relative strength choice. The yield is also 2% higher than SWZ. If I bought one, it would be EWL.
Well, your technicals are certainly right so far — another tough day of moving with the market for this one. The discount appears to be widening a bit, it’s tough to get a current NAV before the Swiss market has had a chance to react to the awful NY market, but the discount may be nearer 18-19% at the moment. I still think many of these companies are the kinds that you want to own during times like we’re experiencing now, and that buying at a discount is preferable … but we’re largely talking about huge multinational companies, and those companies certainly move at least in part based on sentiment about the US and global economies.
Some more thoughts on this fund, and on Switzerland in general — there is some growing sentiment that the country might be tumbling from its mountainous perch, worth thinking about if you’re an investor or potential investor in SWZ: http://www.stockgumshoe.com/premium/irregulars/?p=123
From a fundamental basis, I would stay away from nearly all European stocks.
There has been a lot of lending to Eastern Europe, that was tough to begin with, in part do to a steady population drop,. This has resulted, most noticabley, in spending to shrink municiple services to accomodate the loss of inhabitants….
The default in debt to Eastern Europe is beginning to affect Western Europe….Even Sweden.
Andrea Merkle has made Germany’s concerns plain…This could turn into Western Europes own financial tsunami, directly…Switzerland is as much on the cusp as the others…..
The Swiss Franc appears in the early stages of becoming de-stabilized. UBS helped, as being one of the largest of Swiss corporations…Nestle has not been able to go the distance, despite it’s consumer staple line (Unlike the continueing profitabiity of Proctor & Gamble).
I have watched SWZ retreat, as well….The nastiness is going to spread to Europe in a big way…
If you want an opinion on who will be “Johnny-on-the spot”, to rake in the chips…
Look in the eyes of ex-NKV, Vladamere Putin…Russia is about to get it’s second wind.
which ETF newsletter do you suggest ?
Peter
Yep, things are getting ugly over across the pond — uglier than I expected, certainly. I still like the major healthcare and food companies that form the core of this portfolio, but it’s true that the shares are definitely suffering with the declining macro picture in Switzerland and elsewhere in Europe.
Just FYI, in the past month or so since I wrote this, the top holdings have adjusted significantly with share price moves — not a lot of change in the top three, but Basilea Pharma got a disappointing delay on their new antibiotic and fell significantly, and the top ten no longer includes any of those financial companies (Swiss Re, Julius Baer, Zurich Financial Services, etc.).
And yes, bad news continues about the Swiss Franc, with reports that they may have to make more of an effort to devalue, since they’ve got their interest rate already down to rock bottom. Here’s an FT article from earlier today: http://www.ft.com/cms/s/0/c8ec700e-0ea6-11de-b099-0000779fd2ac.html?nclick_check=1
Of course, as I mentioned, the Swiss Franc was not a good reason to buy Swiss multinationals, and it’s not a good reason to sell them, either — Novartis, Nestle and the like operate much more in Euros, Dollars and the currencies of their global customers than they do in Francs, so it seems likely that currency fluctuation over the long term will just come out in the wash, at least for US based investors. That doesn’t mean Switzerland is the haven it used to be, or that it is not, but certainly nerves are high in the mountain fortress … I still like Nestle, Novartis and Roche, but we’ll see what the future brings.
Hi Guys,
Anyone familiar with THE INSIDER ALERT ?
Best regards,
Peter
Switzerland revisited.
I’m in the process of coming out of Switzerland.
They are apparently 3rd highest leverage in the Eurozone…
1st, Iceland…Gone “paya”; 2nd, Ireland; 3rd, Switzerland…..70:1 leverage…UBS largest corp. in Switzerland (Sub-Prime), plus a ton of loans to Eastern Europe going bad…Currencies tanked; Mortgages more than the housing values…Owners defaulting, and walking away….
The only stable currency is the Norwegian Krona.