Good Time to Invest in Indonesian Stocks?

The IDX went down 7% last week in just couple days of trading, but it soon bounced yet not to the same level as it was. Some bluechip companies went down and dragged the whole index down. Well, actually it might be a good starting time if anyone wants to start investing in Indonesian stocks. But we MUST do our homework of analyzing the financials and ratios and news before we proceed with any decision.

Warren Buffett once said "Be greedy when everyone is afraid, and be afraid when everyone is greedy."
The most fundamental principle of stock investing is buy low and sell high. But, it is not easy to overcome human nature of fearing a deteriorating stock and excited of buying a skyrocketing stock. But hey Buffett's portfolio speaks for itself. So happy investing!

Coal is Heating Up!

Well, the recent heavy flooding of coal mines in Queensland, Australia has really affected the whole world. The lessen supply has made coal an expensive commodity lately. It also affect another commodity, steel. Steel production comes from coal. The scarcity of coal would translate to lessening supply of steel as well. With increasing global demand of steel from manufacturing countries, the price is very likely to keep going up over the next months.

Oil is going up!

Oil has reached the level of around $90 (again). This has worried many industries and countries across the globe as oil is among the most indispensable commodities around. Oil affects so many industries and aspects of life. Transportation, energy, you name it. I guess every single industry in the world is somehow dependent on oil. Even personals like us use oil a lot.

So get ready for the price increase everyone!

How it works in Commodities Exchange

Had a very interesting conversation with my colleague today about trading commodity futures. He went to Singapore sometime ago to check out how it really works with futures. Both he and I are genuinely interested in investing for rubber which has doubled its price since May 2010. But, the problem is the amount of risk that we have to bear. Every transaction in commodity exchange has to be done with leverage. That is a MUST. And the amount of leverage varies depending on the type of commodities. For example, the leverage for rubber is 12x. That means we can buy 12 times as much as our money worth. But remember that if we lose money, we lose 12 times as much too!

So trading commodities sound very very tempting for its potential profit, especially these days with the extreme weather still going on around the world. But remember that with all profit that we could get, we also have to face the RISK.

The Real Cause of the Price Hike

People, the price of most commodities have skyrocketed in 2010. Analysts quoted the causes to be extreme weather and increasing demand from heavy manufacturing countries like China and India. This is actually just an application of economic's basic principle of supply and demand. Price goes up when supply runs out and when demand gets bigger.

Do YOU have a different opinion about this? Please feel free to comment this post and we can all discuss about it together.