Earlier in the summer, we presented our Investment team’s top literary picks for the season. We hope you enjoyed them! Now, in the spirit of sharing interests, we’d love to hear which books and podcasts have caught your attention lately. Share your recommendations HERE and we may feature them in an upcoming edition of Inside Edge!
Video: An investor's journey with EdgePoint
We’re proud of how we’ve been able to help our partners and end clients by building their wealth during the first 10 years of our existence. To help build for EdgePoint’s second decade, we’ve made a video to remind people that the first one wasn’t always a smooth ride but that it paid to be patient during the tough times. Volatility is a constant in the market, how our clients react to it however will determine if they can get to their Point B.
More on negative-yielding bonds
According to Jeff Gundlach: “79% of all negative-yielding bonds are held by central banks.”
With $14 trillion in negative-yielding debt globally, that means that $3 trillion was bought by actual investors.
Saudi oil reserves
Members of the International Energy Agency are required to hold emergency stocks of oil that could cover 90 days’ worth of lost imports. They can deploy these reserves in unison to avoid an oil shock, as in June 2011, when the U.S. and 27 other countries acted to release 60 million barrels of oil from strategic reserves to drive down prices during the disruption caused by the civil war in Libya. The U.S. holds around 600 million barrels of oil in reserve and other governments have a further 1.2 billion.
Saudi Arabia’s own oil reserves have fallen in recent years, but remain sufficient to ensure the kingdom’s customers don’t experience shortages. The only stipulation is that the disruption must be short-lived. The nation holds enough to cover the country’s exports for around 35 days.
A look at what countries are dependent on Saudi oil.
The chart on the left shows total crude exports from Saudi Arabia by destination country with Japan, China, US, South Korea & India making up the bulk of their exports. The chart on the right shows Saudi Arabia’s share of each nation’s crude petroleum imports with Japan and South Korea being the most dependent.
How Buffett's Brain Works
Here are some key factors Warren Buffett considers when looking at potential opportunities:
Simplicity - Is the business easy to understand?
Operating History - Has the business been around for a long time, with a consistent operating history?
Long-Term Prospects - Is there reason to believe that the business will be able to sustain success in the long-term?
Rational Decisions - Is management wise when it comes to reinvesting earnings or returning profits to shareholders as dividends?
Candidness - Does the management team admit mistakes? Are they honest with shareholders?
Margin of Safety - What’s the chance you’ll lose money on the stock, in the long run, if you buy it at today’s price?