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Simon Mugo

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  1. Hello James, I understand your concerns about the rising gold prices and the major uncertainties facing the world as the novel coronavirus (COVID-19) continues to spread. However, I cannot give you personalised investment advice regarding your stock portfolio and whether you should invest in gold because I would have to know more about your investments. However, as a general rule, you should split your investment capital between different asset classes such as stocks, bonds, commodities, real estate, and precious metals such as gold. The amount you allocate to each of these buckets depends on your investment goals and the length of time you intend to hold your investments. In times when one sector is outperforming other sectors, you could decide to allocate more capital to that bucket in order to profit from the higher returns. You could do this if you fell the need to get more exposure to gold, however, you should seek personalised advice from your financial advisor before making such an important decision. Remember, that all investments carry risks that you should be familiar with.
  2. Hi Lillian, I don't think this is the right time to buy Dropbox (NASDAQ:DBS) shares given that the stock gapped higher following the company's stellar Q4 earnings report. The best course of action in such cases, is to wait for the stock to pullback from its current highs and then buy it at a much lower price. Most stocks usually pull back after a major rally or a gap up allowing smart traders and investors to take a position in the company at a favourable price. Buying the company's stock at a much lower price gives you a better risk to reward ratio if the stock rallies higher. Therefore, I would wait for a pullback before buying any Dropbox shares.
  3. Well, Ripple (XRP/USD) is one of the most versatile blockchain projects available given its varied uses in the financial services sector as evidenced by the hundreds of institutions using Ripple's platform. The Ripple platform had over 110 banks as clients in October 2019, which shows how popular the project is among mainstream financial services firms. The above qualities make Ripple a very attractive long-term investment given the fact that the platform has more practical uses than even Bitcoin. Ripple's price is also very attractive given that it is currently trading at less than a dollar, which means that you can buy more units of Ripple than other major cryptos. However, you have to be patient with long-term crypto investments as you may have to sustain major drawdowns for long periods. You could combine your long-term crypto investments with smart speculations to hedge your positions and generate cashflow from short-term price fluctuations.
  4. Well, its hard to say whether Apple Inc. (NASDAQ:AAPL) will use Qualcomm's 5G modem in the 2020 iPhone lineup, but its almost certain that this year's iPhones will have 5G capabilities. There is a high likelihood that Apple could use the newly launched 5G modems if the ones that the company is currently developing do not have similar capabilities. One thing for sure is that Qualcomm's 5G chips will be in high demand given that they are the first such chips to offer carrier aggregation, which allows phone carriers to send 5G signals to smart phones using two 5G bands. Qualcomm's X60 modem allows phones to receive 5G signals sent via sub-6 frequencies as well as via "millimeter wave" frequencies. The fact that the new X60 chips will be manufactured using the advanced 5-nanometer technology means that the chip could feature in many high-end phones released in H2 this year and beyond.
  5. Well, it's a bit early to predict whether last week's rally in oil prices will be replicated this week, let alone for the newt few weeks. The main challenge with forecasting future crude oil demand at the moment is because nobody knows when the coronavirus outbreak will be contained. Last week's rally was driven by investor hopes that coronavirus infections had peaked, but this is clearly not true as new cases are still being reported. Regardless, the technical picture for oil prices looks very promising as the commodity seems to have found strong support at the $49.40 level, which is where the rally started. I do not believe that we will see a major rally in oil prices any time soon given the prevailing market conditions. Long-term investors may accumulate speculative long positions at current prices, while shorter-term traders may be best served playing both sides of the market in case price trades sideways. However, oil prices may spike higher if OPEC+ announce major cuts in oil production, which could happen any time now if the coronavirus epidemic keeps spreading. Remember that both oil producers and marketers suffer when oil prices are depressed, but a long-term rally can only occur if the coronavirus outbreak slows down and is contained.
  6. Shopify Inc. (NYSE:SHOP) beat analysts estimates in its latest earnings announcement and rallied higher after most analysts upgraded their price targets for the company's stock. Analysts at Raymond James raised their price target to $600 from $365, which saw the stock rally higher even as analysts at Sun Trust raised their target to $585 from $340. It seems like Wall Street is extremely bullish on the stock after the company reported that 40 million merchants were now using Shopify Pay accompanied by 47% growth in the merchandise sold on the platform. Most analysts are citing the potential for international growth as the main reason for their ratings upgrade. However, I believe there are better value plays out there for long-term investors, but as traders we may benefit from such rallies by taking short-term positions instead of holding the stock for the long-haul.
  7. Aurora Cannabis, a Canadian weed company, is in financial troubles largely due to the inflated acquisitions made in previous years. The company announced last week that it was booking about C$1 billion in goodwill and asset-impairment charges in its latest quarterly earnings report. The latest announcement also saw the company fire 500 employees including the CEO, Terry Booth, who was also its co-founder. The Cannabis sector has been in a bear market as evidenced by ETFMG Alternative Harvest ETF, which has fallen 55% over the past year. Aurora's stock has also shed 80% of its value over the same period, which has compounded the company's financial problems. The firm also forecast lower sales figures for fiscal Q3 indicating that its troubles are far from over.
  8. The crash by Bitcoin earlier today can be attributed to comments by US Treasury Secretary Steven Mnuchin that the US government was about to unveil a new set of regulations targeting cryptocurrencies and other digital assets. Mnuchin explained that the new measures would ensure that cryptos are not used like the former Swiss secret number bank accounts. Bitcoin's crash was also related to its failure to convincingly break about the crucial $10,500 level, which triggered a bout of selling and contributed to its drop. Most investors are watching to see if Bitcoin can cross this key resistance level, which could lead to a much bigger rally.
  9. The merger between Sprint and T-Mobile was being prevented by a lawsuit brought by Attorney Generals from a group of states including New York and California blocking it after the Department of Justice approved the tie up. A U.S District Judge ruled against the lawsuit earlier today on grounds that there was no evidence that the two companies would engage in anti-competitive practices following the merger. The merger still has to cross one final hurdle as the two companies wait for the California Public Utilities Commission to approve the tie-up. However, given the numerous concessions agreed to by the two mobile carriers, the merger is highly likely to be approved. Shares of the two companies rallied higher in the pre-market session after news of the favourable ruling hit the markets.
  10. Well, Apple recently issued a wide earnings range for Q1 2020 with the company singling out the coronavirus outbreak as a major factor behind the guidance. Foxconn, a major Apple supplier, asked some of its Chinese employees not to return to work at a manufacturing facility due to the spreading coronavirus outbreak. The Chinese workers were on holiday starting 25th January as they celebrated the Lunar New Year holiday, which usually lasts for a week, but had been extended to 10th February. It is not clear when the facility shall be reopened and this could have a significant impact on Apple's supply chain given that Foxconn supplies many iPhone parts. Therefore, it is highly likely that Apple's earnings could lean towards the lower-end of its wide range depending on how long it takes to contain the coronavirus outbreak.
  11. Yes, the dinner took place on 23rd January 2020, according to a receipt and photos posted by Justin Sun the CEO of Tron. Mr. Sun submitted the $4.6 million winning bid for the annual charity dinner with Warren Buffett last year, after which the lunch was set for July 2019, but was later postponed. Sun took some of his friends including Charlie Lee the creator of Litecoin among others and they had an amazing dinner with Warren Buffet. Mr. Sun gave several gifts to Buffett including a single bitcoin, and a bronze horse. The group discussed the future of Justin's company TRON, Tesla, and Bitcoin; he also hinted at a reunion dinner in 2030.
  12. Shares of Burberry Group Plc (LON:BRBY) fell almost 1.5% earlier today after the company announced that sales in China and Hong Kong had been affected by the coronavirus. The maker of luxury items ranging from clothing, accessories, sunglasses, and travel bags among others said that it had closed 24 of its stores in mainland China with the rest witnessing reduced foot traffic. The company issued a press release warning investors that its outlook for the year is likely to change given the ongoing coronavirus epidemic, which triggered a sell-off in the FTSE 100 stock. The stock has since recovered some of its losses, but is likely to experience more downside until the coronavirus pandemic is contained.
  13. I think you meant, why did oil prices attempt to rally today as they are currently trading much lower. The attempted rally in oil prices happened in the futures market, but did not carry forward into the live trading session. The rally in the futures market was driven by Thursday's recommendations by OPEC+ for further cuts in crude oil supplies, which was vehemently opposed by Russia. The OPEC+ group is made up of countries that are members of OPEC (Organization of Petroleum Exporting Countries) and Russia, which is a major oil exporter. Russia's opposition to the proposed cuts in oil production drove prices lower because it meant that there is likely to be an oversupply of the commodity given the slowdown in global economic activity due to the coronavirus threat. You should also keep in mind that Russia is competing with the US, which is also a big oil producer outside of OPEC+, for geopolitical reasons.
  14. The rally witnessed across most global equity markets today was driven by new that scientists had discovered drugs that could inhibit the coronavirus allaying fears of a global pandemic. The first report was from Chinese scientists who said that they had found two separate drugs that could stop the coronavirus and had tested the same on in-vitro (test tube) samples. Another report by UK researchers indicated that they had found a way to shorten the development time for a coronavirus vaccine from two years to 14 days. The two sets of reports seem to have triggered a buying streak across most equity markets as investor appetite for riskier assets soared. However, none of the two sets of scientists has reported positive results on human victims but markets seem relieved by the news. The coronavirus is unlikely to have a long-term negative impact on the global economy as it will likely be contained soon.
  15. Well, I cannot give you specific investment advice, however, Bitcoin (BTCUSD) is the oldest and most stable cryptocurrency, which makes it one of the safest crypto investments. Therefore, you could buy bitcoin if you can afford to it at current prices as there is a high chance that its will rally over time. However, those who cannot afford to buy a whole bitcoin should consider other cryptocurrencies also known as altcoins such as Litecoin (LTCUSD), which trade at lower prices and have significant upside potential. Some cryptos such as Bitcoin SV have posted gains of as much as 498% since December and might be better buys for investors with smaller accounts. Traders who are not very familiar with the cryptocurrency market should stick to the top ten cryptos, which are quite stable, and may be best served avoiding the smaller cryptos that carry more risk.
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