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Investing in rare stamp business…. What’s so special?

What is this investment in rare stamp all about?

Rare stamps is plainly another commodity like Gold, Silver, Copper or you can even compare it with Bonds and Stocks. Just like you buy and sell all these commodities and shares, you can also buy and sell stamps.

Which stamps are considered as “Rare stamps”?

In the investment world, its all about supply and demand. Any stamp which has less supply and more demand will be considered as a “Rare stamp”. For example, if you go to a post office and buy a stamp, all you have to give is 50p. You will get a stamp. This is because the 50p stamp is available all over UK. But if you want a 1p stamp which was used in 1940, now this is a bit difficult to get. This stamp might be a bit expensive even though the face value is just 1p. Reason, the supply is less. But just because the supply is less, doesn’t mean the demand will be more. For example, there might be other stamps which might look more attractive, more aged, less damaged etc.  There might be some stamps which might have been released later like in 1950′s or 60′s but in a very special occasion with a limited quantity. All these factors leads a stamp to get the grade of a “Rare stamp”.

Why is this investment in rare stamp “A good investment”?

Rare stamp is a kind of commodity which doesn’t show close relation with other stuff like shares, bonds or currencies etc. The reason behind this scenario is currently the rare stamp business is yet to completely commercialized. This investment is still running on a person’s interest and craze for collecting stamps. In a few decades from now, this field would become completely commercialized and at that point, you can fetch a good profit if you are investing now.

Even if I invest rare stamps, Who will buy it?

Recent study showed that the stamp collecting is increasing as a form of hobby in China, India and Russia. So no need to worry about the buyers. People always like spend their in an interesting and different manner. I have personally come across three stamp collectors.  Like there are people to buy and sell shares, there are people who have the craze to collect the stamps and keep it as an antiquity or as an investment diversification.

Is this business popular?

Rare stamp investment is not as popular as shares or bonds or currencies. But with the stock markets and currency trading losing its shine, facing lots of ups and downs, the rare stamp is getting attention in the form of long term investment or an alternate investment where your money is not getting sucked out by market fluctuation.

What are the risks in this Rare stamp investment?

The most prominent risk at present in this business is very less number of buyers, but the number is growing. So any one investing in this business should not be expecting anything to happen anytime soon. But it is widely believed that it fetches double the investment within a time period of 5 to 7 years. This business at its present form is more like a long term investment with very less volatility. You need to understand that this business runs with antiquity of a commodity. So more the years, more is the value unlike shares and currencies where you have both short and long term options.

NYSE (New york Stock Exchange) Penny shares list..

Cal dive international NYSE Symbol: DVR
Callon petroleum NYSE Symbol: CPE
Camac energy NYSE Symbol: CAK
Cano petrol NYSE Symbol: CFW
Cheniere Energy NYSE Symbol: LNG
China north east petroleum NYSE Symbol: NEP
Crimson Exploration NYSE Symbol: CXPO
Cubic Energy NYSE Symbol: QBC
Delta Petroleum NYSE Symbol: DPTR
Double eagle petroleum NYSE Symbol: DBLE
Ener1 Inc NYSE Symbol: HEV
Fieldpoint petroleum NYSE Symbol: FPP
Gasco Energy NYSE Symbol: GSX
Gastar Exploration NYSE Symbol: GST
Geoglobal resources NYSE Symbol: GGR
Geomet NYSE Symbol: GMET
Geopetro resources NYSE Symbol: GPR
Hercules Offshore NYSE Symbol: HERO
HKN Inc NYSE Symbol: HKN
Ivanhoe energy NYSE Symbol: IVN

Why does West goes to war with “Oil rich countries”

Recent war rhetorics over Iran, just raises another question.. Why USA and other western countries keep invading the oil rich countries? If not invading, atleast why they keep making the noise? Many innocent citizens of this planet earth think that its all about controlling the oil resource. But that’s not it.

This strategy of war drums works very well in increasing the price of the oil. Due to the advancement of media in today’s world, even a spark is blown up into a bowl of fire in the media. So if the president of USA says something about Iran, it will be converted into a war rhetoric by the media which in turn is used by the greedy traders to increase the price of the oil.

Imagine if the oil price is $90 per barrel and the president of USA says that “Iran must comply with the rules”, this is taken as a call of war by the media and in turn creates a shockwave in the trading world. Even though nothing has happened yet, the traders create a cloud that there is going to be a cut in supplies of oil from Iran due to the war clouds developing in the region. When traders start buying the oil futures, this increases the price of the oil.

The interesting part of this war mongering is the parties who make profit is the USA. How? The USA is the largest consumer of oil in the world and most of the oil futures traders are in the USA. Iran is the second largest producer of oil. The traders in the USA buy the oil futures and wait until it goes up. Once USA starts moving its war ships, the war rhetoric increases, and this moment is a huge excuse for the oil traders in the USA to sell the oil for higher prices to its people and to other nations.

Why would they even do this? The reason is very simple. If there is an increase in the price of oil, is there any consumer who will accept it as it is? No. Why? We need a reason. If we don’t have a reason, the reason is created. The reason is War. The increase in price is pressed on us and we end up paying a heavy price for a commodity which is worth low. Why? Because we are proud that our country is at war. Thats it.

This is a simple way of the politicians to play with the minds of the people to generate more money for its businesses and its greedy traders.

Why Nostra terra oil and gas (NTOG) is a best bet to invest…

Nostra terra is an oil and gas company which has its interest in United states and Ukraine. Its a very popular penny stock in the oil and gas sector with very active investors. To be honest i am not an investor but i am just a spectator of the various stock exchanges around the world.

This stock caught my attention and so i decided some pros and cons i observed. I had seen this stock going up and down for a while but now it stands at circa GBX 0.6. I had seen this stock rising upto circa GBX 1.5 and falling till circa GBX 0.3.

The interesting point i noted is there was no panic in the trend of the price rise and price fall. All the rise and fall in the share price took considerable time to happen. Which clearly means the investors in this stock know what they are doing. One more important point is that most of the investors are long term investors who are waiting for good prospects out of this company.

The company is also doing its part by acquiring more assets rather than pleasing the investors with some short sighted ideas. This makes the CEO and company more reliable than others.

Some negatives i noted was the works were stopped due to snow weather conditions which is a backdrop. Initially the CEO took a strong stand against the rampers by threatening them to sue if they involve in cheating the investors. But slowly rampers started appearing again.

On the whole, as per my title, its still a best bet for this year and in the category of  penny stocks for oil and gas.

What does it mean by bankruptcy???

The most recent issue which is rocking the Europe and the whole world is the financial crisis of Greece. With the whole watching carefully, financial gurus are expecting another “Lehmann brothers” style crisis  which led to recession in 2008. But why is Greece going bankrupt? How does some country is declared as default or bankrupt?

Every country has its earning and spending capacity. When your spending goes more than your earning, you take loan to offset the difference. This loan comes strings attached (i.e.) interest. When the country loses its capacity even to pay its interest, its declared bankrupt.

Greece was already in this position last year and it was bailed out for a record amount of $110 bn. But what went wrong? Its the way that money was invested. Greece has a socialist society where most of the companies are state owned. Above all greeks are one of the most notorious taxpayers in Europe where tax evasion is almost done by everyone. So the bailout money invested in the country went inside a huge blackhole and never came back. There were austerity measures introduced but it didn’t go as far as expected. The country faced lots of job cuts but still worth nothing.

Threatening EURO:

This destabilised country is now threatening the common currency of Europe, EURO. How this works? EURO is a common currency used across Euro zone countries. This single currency was introduced as a bullwark for US dollar and the increase the importance of the european nations. EURO is used in Greece as well. The problem with using the EURO is if there is an increase in rate of interest, it will be applied on all the euro zone countries irrespective of their domestic conditions. Germany and France are strong enough to face these rates but not  others.

Now France and Germany fear that Greece going bankrupt means the decline in the value of EURO. This would be humiliating for the euro zone countries in the international arena. If Greece succeeds once it leaves EURO, countries like Spain and Portugal will follow the same suit. This would mean the end of EURO as a single currency of Europe.

Decline in the value of EURO:

The potential disaster would be the decline in the value of EURO against other strong currencies. The result would be to pay more in return. For example, if “X company” has got a loan of $100000 from an american bank  and agreed to pay back in EURO, the company would end up paying more with the decline of the value of EURO, in return more EUROs needed to finish the loan.

Type of contracts in commodity trading…

With the basic knowledge of what commodities trading means, its time to move deep into the topic… In this article i will discuss about different types of contracts or sales carried out in the commodity trading.

1. Sales through cash.

2. Forward contracts.

3. Futures.

4. Options on futures contract.

1. Cash through sales:

Almost everyone in the world have a good knowledge of this kind of trading as it is one of the most familiar way of trading. In this category of commodity trading, a trader delivers a crop (wheat, barley, sugar etc) or livestock (beef, chicken, pork etc) and get the price for the particular commodity based on the market price of that day and transaction is completed every now and then. The notable point in this category is you can sell a commodity only once.

Advantages:

a. The payment in this category of commodity trading is immediate.

b. The transaction is easy as it is done promptly.

c. There are no preset quantity and you are not required to meet a particular demand.

Disadvantages:

a. Involves high risk as you can sell only once and no turning back.

b. No protection for your money. You have to accept the market price at that point.

c. Not flexible as other types of commodity trading.

2. Forward contracts

This type of commodity trading is a marginal development over sales through cash. In this type of trading, the buyer and seller negotiate the price now for delivery to be done later. For example, if you are willing to sell 100 bushels of wheat, you enter in a contract with a potential buyer and start negotiating price for a particular quantity and quality. Once both the parties are satisfied, the price is locked. So the buyer is supposed to pay the price what was agreed in the contract even if the price goes down in the market. But if price goes up, the seller cannot take the advantage either.

Advantages:

a. It is far easy understand.

b. The prices agreed are locked and both the parties are protected with the rise and fall of market.

c. Quantities can be flexible.

Disadvantages:

a. Must be delivered in full.

b. Profit lost if the prices rise.

3. Futures

A futures contract is an agreement between you and brokerage firm to buy or sell a commodity at a date set in the future. All you need to do is set up an account with a brokerage firm who might require a deposit to offset any loss incurred by your contract. If in future the value of contract goes down, you might have to make some extra deposit to offset the loss. In this type of commodity trading, there is also a requirement of paying broker commission while executing a trade.

Advantages:

a. Risk is even more minimized.

b. Offers more prices for your stocks compared to forward contracts.

Disadvantages:

a. Commission had to be paid to brokers.

b. Setting the quantities.

c. Opportunity lost if there is an increase in price.

4. Options on futures contract.

In this type of commodity trading, you have the right to buy or sell but its not an obligation. To buy an option you have to pay premium and in turn broker  commission as well. For instance, if you are buying an option and if the price goes high, you can simply wait until the option expires and you can sell it to make profit. In turn if the price goes down, you can offsetting the option or exercising the option.

Advantages:

a. Protection for the price.

b. Easy to enter and exit.

c. Risk is minimized.

Disadvantages:

a. Commission cost.

b. Quantities preset.

Investing in solar energy companies….

Solar energy is identified as the latest and considered to be investment of the future. With more natural non-renewable reserves like oil, natural gas and coal are being exploited by the developed and emerging economies to power their growth. But the current situation doesn’t look so bright.

There are lots of reasons for this. With most of the countries looking for quick development, everyone looks for non-renewable resources as it is cheap, easy and tested. But time will come when all these resources are exhausted and humans will be pushed to the corner. So renewable energy is considered to be the only solution to avoid the mess as they are available in abundance and they last forever.

In this line, solar energy has been recognised to be one of the best options to get their economic engines running. Even though the current contribution of the solar energy is around 0.1% on an average compared to other resources, it has considerably increased in the last decade with more countries becoming aware of depleting resources and dependence on others for resources.

Countries like india and china had already proposed new projects with investment upto $10 billion in this industry to generate solar power to increase its contribution to atleast 20% of their total power requirements. With more awareness, new technological breakthroughs and investments this is one of the most promising industry to invest in.

Even though the current situation looks gloomy to this industry, with more countries backing solar power, lots of technical breakthroughs are expected in the coming decade. With cheaper raw materials and backing of the respective nations this industry no doubt will replace oil in a few decades.

Photovoltaic cell is considered to be main component in the solar power generation. Research and improvement in the photovoltaic cell in the recent times had been very impressive. Once more factor is that solar energy is considered to be very expensive compared to other sectors. With more involvment of the government and more research, no doubt this is going to be the most promising sector.

Which industry to invest??..

As a budding stock trader, there is always a dilemma “Which share to invest?”, “Which is the best industry?”..

In this article i will try to address some of the basic thoughts to be made before investing. Every share you see in the stock exchange represents a company which is involved in some industry say infrastructure, oil and gas, refining, mining, pharmaceuticals etc. So there are lots of industry to invest, but which one is the best to invest? This question lurks in almost every traders mind.

Practically there is nothing called a best industry. If you start trading you will understand that almost all the stocks are driven by the positive and negative news. Every stock has its own rising and downfall time. Let us analyze with an example. Today all the economies are driven by energy. So oil is the important part of the emerging and developed economies. So you might find there are loads oil and gas companies attracting investment from the investors. Does it mean oil and gas is the best industry to invest? May be for now. But what about this industry in 5 or 10 years.

Once again this question depends on whether you are short term trader or a long term trader. For long term trader, it would be good to choose well established companies who can sustain major crisis whatever the industry may be. But you must also remember that to make good use of oil, you need good infrastructure which also needs investments in various scales.

So all the industries are interconnected. But there is one point which might make industry very attractive. Which is the commodity for which the world super power would fight for? Of course it is oil. So oil and gas industry has already found its way deep into all the regular investors heart. So if you are a short term, new trader and looking for an industry to invest, then the best choice would be the oil and gas. But beware of rampers and false companies. Good luck investing.